Howard Kaufman, MD
For independent oncology practices, 2016 was a year of struggle— struggle to achieve new levels of reporting to CMS, and struggle to improve interaction with patients and coordination of care. It was also a year in which a slate of new acronyms and abbreviations from CMS became household words in oncology centers across the country, as the value transition took a stronger hold.
In 2016, storm clouds appeared on the horizon in the form of a Medicare Part B payment experiment from CMS intended to broadly reconfigure the average-sales-price-plus-6% formula for drug payment and thereby discourage volume billing for oncology services.
Also, the past year saw a major pharmacy benefit manager launch an abortive attempt to exclude many in-house dispensaries from issuing Medicare Part D oral oncolytic drugs, a move that caused great consternation among oncology practices. At the same time, CMS decided to take a go-slow approach to implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), which significantly eased the pressure on physicians worried about the new performance measurements and payment incentives.
Those were some of the biggest headlines on the oncology business scene over the past year, and independents were highly active on the legislative scene as they sought to interpret these complex new reforms, ward off the payment experiment, and prevent CVS Caremark from going forward with its plan to isolate in-house pharmacies from Medicare Part D drug dispensing.
But a lot more was happening besides. The year 2016 saw Vice President Joseph Biden announce the start of the Cancer Moonshot, a highly ambitious effort to double the pace of cancer discovery based on the promise of precision medicine. Many physicians wondered about the trickle-down effect of this initiative and whether their cancer research programs would see any of the financial stimulus. The year 2016 also saw the much-vaunted 21st Century Cures Act become a reality, following overwhelming votes for approval in Congress and endorsement from the White House.
21st Century Cures promises to light up the medical scene like a $6.3 billion booster rocket, giving a 10-year lift to multiple initiatives that include precision medicine advancement, the Moonshot, curing Alzheimer’s, battling prescription opioid abuse, and brain research. Yet it also represents a test of nerves for those who worry that this legislation—while shaking loose some of the fetters on the pharmaceutical industry—may weaken the regulatory strength of the FDA by depriving it of data that some consider vital for the type of independent analysis the federal agency needs for drug approval determinations.
The past year has also seen multiple refinements and enhancements in the new slate of value tools promoted by such groups as ASCO and the National Comprehensive Cancer Network (NCCN), tools that promise to enable physicians and patients to discuss the economics of care and not just treatment. Even as these methodologies emerged, by the end of 2016 it was clear that yet another leap forward in the economic discussion is needed, one that encompasses the realities of immuno-oncology drugs. These drugs have the potential to work far more efficiently than cytotoxics, but they also cost far more. These dynamics prompted a group of oncologists and other industry representatives to hold a summit on the issue at the Society for Immunotherapy of Cancer (SITC) annual meeting in November.
“We need to develop a dialogue with other parties that are actively engaged in developing value platforms, engage a medical economist with expertise in value development, and consider whether further research or collaboration is the right next step,” said a co-organizer of the SITC event, Howard Kaufman, MD, FACS, chief surgical officer and associate director for clinical science, Rutgers Cancer Institute.
2016 was also a year in which the trend of mergers and closings among independent oncology centers saw little, if any, abatement. The Community Oncology Alliance (COA) came out with its biennial assessment of practice health and reported that since 2014, roughly 73 practices have merged with or been acquired by a hospital and 67 practices have closed their doors. The trend lines in this regard for the large part continue the upward trajectory they have maintained since COA began this set of statistics in 2008. Other information from the COA presses in 2016 included the observation that whereas 90% of commercially insured chemotherapy infusion was done in physician offices in 2004, hospital outpatient centers had captured 60% of the total by 2014.