A Value Proposal That Will Raise Costs

Andrew L. Pecora, MD
Published: Saturday, Jun 11, 2016
Andrew L. Pecora, MD

Andrew L. Pecora, MD

Chief Innovations Officer, Professor, and Vice President of Cancer Services

John Theurer Cancer Center at Hackensack University Medical Center

President, Regional Cancer Care Associates, LLC

“Oncologists choose drug treatments based on a core principle: provide the right drug to the right patient at the right time,” ASCO President Julie M. Vose, MD, MBA, FASCO, told CMS in response to the proposed Medicare Part B drug payment change. “This demonstration will do nothing to further the Administration’s goals for health reform. It will not improve health, it will not enhance quality, and it will not lower cost,” she said. It seems to be that there is a “minor” disagreement between ASCO and CMS about the approach to address value in cancer care delivery. I know Dr. Vose and have no doubt that she truly believes, in representing ASCO, that the proposed plan by CMS will not address the issue and can potentially harm patients. I also have worked with the professionals from CMS and The Centers for Medicare and Medicaid Innovation. They truly want to do the correct thing for patients with cancer but also have the responsibility to keep healthcare affordable so it is accessible now and in the future. So, the question is, how is it possible for two groups of caring and knowledgeable professionals to have such divergent views?

Let us start with the views of ASCO. ASCO asserts that Phase 1 of the proposed demo is “essentially a mandatory experiment on seniors with cancer, but without accepted patient safeguards in place. Patients cannot opt out of the demo and receive no informed consent, as is mandatory in ethical clinical research.

Further, there is also no way to monitor potential adverse consequences in real-time.” This would appear to be true, particularly because if doctors shy away from more expensive drugs that are just too expensive to risk buying and storing—and it is these drugs that have better outcomes—it will be only after the fact that this will be known to the public. Furthering this problem is that, according to ASCO, “CMS would reimburse practices for less than the acquisition cost of many oncology drugs—forcing many independent oncology practices to send their Medicare patients to other facilities for treatment.”

Another potential unintended consequence of this proposed approach, according to ASCO, is that “the changes in Part B reimbursement rates proposed in the demo will likely push a greater number of patients with cancer to the outpatient hospital setting,” even though treating patients costs significantly less in community-based cancer clinics for both patients and the Medicare program. In 2014, Medicare spending for patients receiving chemotherapy was 34% higher in outpatient hospital departments than in independent community oncology practices, ASCO said, adding that patient out-of-pocket costs are also approximately 10% lower in community clinics than in hospital settings, “resulting in more than $650 saved for each Medicare beneficiary fighting cancer per year.” This shift in site of care seems likely to occur because CMS cannot force physicians to accept economic terms adverse to them even if it lowers cost for CMS.

CMS has enough data to believe that the approach being presented will reduce expenditures on drugs. I fear that the extrapolation that this will translate to value for anyone—CMS, oncologists, society, or most importantly patients—may not be true. We must drive value into the system to reduce waste and unnecessary care but not at the expense of clinical outcomes. No one wants this to happen—not ASCO, not Dr. Vose, and not CMS.


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