HEALTH POLICY

21VOL. 2 NO. 3 www.ValueBasedCancerCare.com I

The journey for healthcare cost-savings is a never-ending pro-cess. One of the newest health -

care delivery models, which ismandated for Medicare beneficiariesin the healthcare reform law, is theaccountable care organization (ACO).This new model requires ACOs tofocus on primary care, but it has impli-cations for oncologists as well.

Oncologists Can Join, Not Start,

an ACO

An ACO is a network of providersthat agrees to manage all of the health-care needs for a defined population ina specific period—at least 5000 pri-mary care Medicare patients for atleast 3 years. In effect, an ACO is anintegrated system that attempts toeliminate fragmented care for Medi -care beneficiaries and coordinate theirentire care—prevention, diagnosis andtreatment, and the continuing man-agement of chronic diseases, as well asaftercare.The ACO requires providers to man-

age all the health needs of their coveredpopulations. The cost-saving is expect-ed to come from eliminating unneces-sary or redundant procedures, sharingclinical information among providers,and meeting quality targets that allowproviders to keep a portion of the sav-ings. Providers will be paid more forkeeping their Medicare patientshealthy and out of the hospital.Under this new model, providers

must collect and report utilization andcost data to the Centers for Medicareand Medicaid Servcies and for theirACO population, as well as on meas-

ures of quality of care and populationhealth. A provider may be required tomeet minimum quality standards tocontinue to participate in an ACO. The law allows any number of

organizations to form an ACO, includ-ing physician group practices, practicenetworks, hospitals, hospital–physi-cian systems, and other groups. Oncologists, like other specialists,

cannot take the lead in launching andmanaging an ACO, but they can join asmany ACOs as they wish.

Few Quality Measures for

Cancer Care

Of the 65 proposed quality measuresoutlined in the ACO law, only the pre-ventive measures of screening forcolon cancer and mammography relatespecifically to cancer care. PatrickCobb, MD, Chairman of CommunityOncology Alliance (COA) and theCOA Policy Committee, and Ted Okon,Executive Director of COA, outlinedthe challenges for oncologists in arecent article on OncologyStat.com.

According to Dr Cobb and Mr Okon,“An oncology provider participating inan ACO will be under enormous pres-sure to simply control or reduce costs.Supporters argue that ACOs are differ-ent from HMOs, in part because theyare not just about cost-savings—quali-ty measures must be satisfied.However, there are no quality meas-ures for cancer treatment. Furthermore,although there is a nod to quality, noone should kid themselves—ACOs arereally all about saving money.”1

They cite the following hypotheti-cal example: “What happens whena new $93,000 prostate vaccine or$120,000 melanoma drug becomesavailable? These expensive new ther-apies will threaten to break the ACObank, putting the pressure squarelyon the oncologist to either keep thepatient’s best interest or that of theACO as highest priority. Few oncolo-gists will want to be placed in thatposition.”1

Overlook Medical Center inSummit, NJ (part ofAtlantic Health), isin the process of creating 2 ACOs. Ina phone interview in May 2011,Overlook’s president, Alan Lieber,pointed out, “The potential savings inclinical oncology will be driven by thedesign of incentive structures. Themore oncologists are allowed to pro-vide cost-effective care, the more likelythey will be to participate.”

Cost versus Quality in Oncology

An ACO management will have toaddress the delivery, measurement,and cost of quality of cancer care. Theissue of quality versus cost may resultin clinical dilemmas between primarycare physicians and oncologists. Forexample, for a cost-conscious primarycare physician, the high cost of cancersurgery could function as a disincen-tive to refer a patient to a surgeon. Thephysician could instead suggest a lessexpensive course of chemotherapy.Dr Cobb and Mr Okon summarized

it best; “The burning question is ‘who’oncologists are accountable to—pay-ers (in finding cost-savings), or theirpatients (in providing quality cancercare)? Certainly, at a time when cancerincidence and treatment costs are bothincreasing, oncologists bear someresponsibility for controlling costs. Thestrategies for doing so include provid-ing care, for example, that minimizesemergency room visits and hospital-izations and using evidence-basedguidelines to control treatment costs,when possible. However, first andforemost, oncologists are accountableto their patients in providing the high-est quality cancer care.”1

The jury on ACOs will be out for along time. ACOs must prove that theyenhance overall healthcare quality,while also reducing costs.As for oncol-ogists, they must become familiar withACO rules and regulations to deter-mine the best way they can contributein such a model. �

Reference1. Cobb P, Okon T. Just ‘who’ is the oncologist account-able to in an accountable care organization?September 7, 2010. www.oncologystat.com/viewpoints/cancer-policy-forum/Just_Who_Is_the_Oncologist_Accountable_to_in_an_Accountable_Care_Organization.html. Accessed May 31, 2011.

Accountable Care Organizations: Implications for OncologistsBy Rhonda Greenapple, MSPH, President and Founder, Reimbursement Intelligence, Madison, NJ

The Challenge of Value-Based...Continued from page 20

point of diminishing returns is afterthe second line of therapy.The second issue is, if drug A and

drug B have very similar outcomes,but drug A is much less expensive,then the ability to use drug A for themajority of the time and cover A forthe majority of the time is a big issue.From a payer’s standpoint, it mayhave to be done by adjusting the reim-bursement away from the way reim-bursement is traditionally done.For example, using an average sell-

ing price (ASP)-type reimbursement,which is a percentage-plus reim-bursement, where drug A costs $100and drug B is $1000, if you reimburse

ASP plus 20% for each, the physicianis likely going to use drug B, to getthe 20% of $1000 instead of 20% of$100. If we can find a few of these“big therapies” with similar clinicaloutcomes, then we will reimbursemuch higher for a generic drug andstill save costs.Finally, no payer wants to end up in

the news for saying they denied carebecause they did not value 4months oflife or 2 weeks of life. In pancreaticcancer, there is a drug approved basedon 2 weeks of survival benefit. Is thisvalue? In cancer, 4 months is actually afairly decent amount of time. These aremajor challenges for payers. �

“The potential savings inclinical oncology will bedriven by the design ofincentive structures. Themore oncologists are allowedto provide cost-effectivecare, the more likely theywill be to participate.”

—Alan Lieber

“Oncologists, like otherspecialists, cannot take the lead in launching and managing an ACO, but they can join as manyACOs as they wish.”

at a glance� ACOs are now mandated by

the healthcare reform law for

Medicare beneficiaries

� Oncologists cannot start an

ACO, which is focused on

primary care, but they can join

such a program, and will likely

be affected by it

� Of the 65 proposed quality

measures outlined in the ACO

law, only colon cancer screening

and mammography relate to

cancer care

� The potential savings in

oncology will likely be driven by

the incentive structure

� The burning question,

according to Dr Cobb and Mr

Okon, “is ‘who’ oncologists are

accounted to—payers…or their

patients”

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