Fee-for-Service Unlikely to Disappear Soon

Tony Berberabe, MPH
Published: Monday, Apr 15, 2019
Allen S. Lichter, MD

Allen S. Lichter, MD

The Centers for Medicare & Medicaid’s (CMS) push to supplant fee-for-service care with value-based care, which is associated with lower cost and better individual treatment, has left oncologists awkwardly trying to make both systems work, according to Allen S. Lichter, MD. This situation is among the key trends likely to shape oncology practice in coming years, said Lichter, a senior partner at the consulting firm TRG Healthcare in Philadelphia, Pennsylvania.

Fee-for-service tends to result in a surplus of care and unnecessary medical expense, but it probably won’t disappear from the landscape soon, Lichter said. Similarly, he does not expect value-based care to become a dominant payment model in the near future. This dualsystem transition spells fits and starts and an overall bumpy road ahead for oncology practices, Lichter told attendees of the Association of Community Cancer Centers’ 45th Annual Meeting & Cancer Center Business Summit, held in Washington, DC.1

“In my opinion, it will be nearly impossible to deliver these different models of care to different populations at the same time,” Lichter said. The growing emphasis on reducing costs of care and improving value for individual patients is turning medicine into more of a business than it has ever been, Lichter said. Therefore, oncologists “must react, embrace, and create ideas and concepts that we as clinicians were not trained for.”

He explained that, in the move toward value-based care, 3 prototype payment models have captured a lot of attention: The Oncology Care Model (OCM) from CMS links payment to financial and performance accountability; the Making Accountable Sustainable Oncology Networks approach by Innovative Oncology Business Solutions is a model designed to stabilize payment flow and care quality during the transition to value-based care; and the Patient-Centered Oncology Payment model is the American Society of Clinical Oncology’s (ASCO) proposed system to provide for higher, more flexible payments than the OCM that ASCO says will support improvements in care quality. “We will have to put our collective mind-sets toward these approaches,” Lichter said.

Other emerging major trends include increased screening and detection and their effect on outcomes, escalating drug costs, real-world data and the growing presence of artificial intelligence (AI), technological improvements to direct and indirect care, and growing awareness of social determinants of health.

Increased sensitivity of tests and growing understanding of the value of surveillance versus active treatment have challenged oncologists to accept the concept of less is more, particularly regarding low-grade prostate cancers, ductal carcinoma in situ, and small papillary thyroid cancer, Lichter noted. In thyroid cancer, the 2 major treatment modalities, thyroid lobectomy and total thyroidectomy, have identical low rates of mortality,2 yet the current standard is predominantly total thyroidectomy, in which patients face hypothyroidism, hypoparathyroidism, and the potential for laryngeal nerve damage post thyroidectomy, Lichter said. Lobectomy carries a lower risk of nerve damage, avoids the risk of hypoparathyroidism altogether, and preserves thyroid tissue. With this approach, many patients may also avoid the need for permanent thyroid hormone-replacement therapy. The greater use of thyroidectomy suggests that a bias for surgery is influencing choice of care and a more careful review of patient options for treatment is merited.

Another significant trend affecting oncology practice is the increase in drug costs. Total oncology drug spending reached $61 billion in 2017, up from $38 billion in 2013. The median launch prices of new oncologic agents climbed to $160,000 for a year’s supply in 2017, up from $79,000 in 2014.

However, there are ways to lower overall costs without compromising on the quality of outcomes, and oncologists need to pay attention to these, Lichter said. He cited the example of ibrutinib (Imbruvica), a Bruton tyrosine kinase (BTK) inhibitor with indications in chronic lymphocytic leukemia (CLL) and other settings.

Although for CLL the label recommends a dosage of 420 mg/day, a recent study examined BTK signaling inhibition when the dose was lowered from 420 mg/day to 280 mg/day and 140 mg/day over the course of 3 cycles of therapy. The finding was that signaling inhibition was maintained throughout the dose reductions.


View Conference Coverage
Online CME Activities
TitleExpiration DateCME Credits
Oncology Briefings™: Current Perspectives on Preventing and Managing Tumor Lysis SyndromeJun 30, 20191.0
Community Practice Connections™: 2nd Annual International Congress on Oncology Pathology™Aug 31, 20191.5
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