Oncology Business News®
May 2016
Volume 5
Issue 5

Employers Say That Value Means Working Directly With Oncology Providers


Oncology practices may soon find themselves working directly with employers on benefits and treatment strategies.

Cheryl Larson

Oncology practices may soon find themselves working directly with employers on benefits and treatment strategies. As evidence of that, this year was the first that employer representatives were invited to speak at the Community Oncology Alliance (COA) annual conference, held last month in Orlando, Florida; in addition, a large employer coalition recently obtained a seat on COA’s Oncology Medical Home (OMH) steering committee. Employer representatives say they have taken a back seat to benefit design and management in years past, but now it has become imperative for them to get involved. “Employers didn’t necessarily want to be in benefits.

It kind of fell on them, and now it’s a mandate,” says Cheryl Larson, vice president of the Midwest Business Group on Health (MBGH), a large employer consortium that is supporting employer efforts to effectively manage healthcare costs. MBGH is especially concerned about rising costs for oncology.

A 2014 survey of employers by the business group found that none of them were doing specialty drug carve-outs for oncology, in which a separate set of rules would apply for payment; however, Larson says she knows anecdotally that some employers have already moved in the direction of carve-outs, and she predicts that future surveys will show that the idea is taking hold. At the COA conference, Larson shared data from one employer whose employee drug claims were less than 3% of total health claims from 2010 to 2015, whereas the dollar total of the drug expense soared from 20% of healthcare spending to more than 35%. Drug costs in 2016 for that particular employer are forecast to reach 50% of total healthcare spending, Larson said.

Oncology is not a sphere in which employers have wanted to dabble. The gravity of a cancer diagnosis is something that many employees do not wish to share with their employers, and companies have erred on the side of respecting employees’ privacy, said Karen van Caulil, PhD, president and CEO of the Florida Health Care Coalition (FLHCC) of employers, which is partnering with MBGH on certain benefit reform initiatives. However, there’s a lot of confusion and frustration among employees who are now trying to obtain care through high-deductible plans as a result of the Affordable Care Act (ACA). Many of them are afraid to seek care because they don’t want to be socked with high out-of-pocket costs, van Caulil said. Many don’t realize that they are allowed covered preventive screening under the ACA or that their employers may have oncology-specific plans that can mitigate the financial burden for them. In other cases, employees are showing up in managers’ offices and expressing deep concerns about their treatment options. All of this has demonstrated to employers that they need to be properly trained and prepared to respond to these issues, van Caulil said.

Oncology practices in the community often don’t know that employers have plans available that can help with treatment costs and coordination of care, and business leaders at the COA conference strongly recommended that practices hook up with their local chambers of commerce and leading employers to make sure these knowledge gaps are filled. “Employers are willing to assist with patient management and coordination. They want to be able to help with patient education,” van Caulil said.

FLHCC works with public and private employers, including a large school district with 35,000 covered lives that found a large knowledge gap existed among its employees, who were not connecting with their available oncology management benefits until three to four months into treatment. They would receive a call from a nurse manager saying, “Hi, I’m here to help you get started with your treatment.” That was too late, because the patient was already engaged with their treatment process, van Caulil said. To solve the problem, the district hired a nurse navigator and began putting up posters around the district advertising the nurse assistance, along with a number to call. Within five days, the nurse navigator received 180 calls, van Caulil said. “So, obviously, there was a pent-up demand for that kind of assistance.”

The problem was that the claims process was the trigger for the assistance call, whereas it should have been much earlier that patients received personal contact from a professional who could steer them through the system. Initially, the addition of the nurse navigator was a success, as overall costs of cancer care dropped 5% within five months. The school district was unable to continue the pilot program because of concern from union officials that the school district should not steer the employees to a particular program or provider. FLHCC continues to work with the school district and its key stakeholders to put a similar program in place.

One huge obstacle to developing benefits programs that are better suited to employees is the competitiveness of the healthcare industry. Various healthcare companies are loath to share information with employers on the healthcare needs of their employees. This data may be crucial for designing employee assistance programs that work. However, often it has to be written into the contract with a payer or pharmacy benefit manager (PBM) that information is to be shared with the employer, business leaders said at the conference. Another problem they mentioned is that PBMs appear to be putting drugs on formulary based on the attractiveness of rebates offered by the drug manufacturer, not on the clinical benefits.

OMHs appear to offer streamlined care, and initially the data on medical outcomes are promising, van Caulil said, adding that employers are awaiting more information before they become true believers, such as measures of how treatment in an OMH contributes to reductions in disability, improvements in productivity, and reductions in absenteeism. “We would really like to put something together and see whether those outcomes are more favorable with medical homes,” she said. In addition, there are suspicions in the employer community that some of those physician groups who are calling themselves OMHs are not meeting the standards of OMHs. Part of the employer response to rising medical costs and employee need will be making these distinctions so that employees can be driven toward high-value providers, van Caulil said.

As a measure of employer activism with regard to healthcare belt tightening, MBGH’s 2014 survey of its membership found that 56% were looking to reduce or better manage health benefits costs and that 45% wanted to better manage specialty/biologic drugs. The survey found that 88% of employers still use traditional benefit plan designs for specialty drug management, but that 68% were willing to consider narrow networks that assume the risk, 63% were willing to consider specialty pharmacy as a carve-out, and 55% were willing to shift more costs to employees.

Larson said she fears a healthcare landscape in the future where employers exit the system. “If employers are going to stay in the game, every stakeholder in this marketplace is going to have to take a little hit. That’s just the reality of it, because employers are the ones who are paying for the majority of the rising costs, and it’s becoming unsustainable,” Larson said. With all the talk about employers worrying about rising costs and trying to get control of them, it would be wrong to assume that employers are going to become penny pinching and hard-hearted, Larson said. The majority of them, especially the large employers who form the bulk of the membership of MBGH, really do care about their workers and their workers’ families, and want to make sure the best in care is available to them, Larson said. “We certainly don’t want to see them putting employees in the [ACA] public exchanges,” she said, relating to the COA oncology crowd a horrific experience she went through trying to find an acceptable ACA plan for her daughter. “The costs are really high and the services are not all that great. I don’t know how we’re going to ignite the industry as a whole, but this is an important opportunity for us to talk about it.”

Expect More Direct Contracting in Future

Along with the effort to identify high-value providers, oncologists can expect to see employers using more incentives to get employees to make the healthcare choices that work best with employer budgets. Community oncology practices are well placed in this transition because they have the lower-cost, site-of-care advantage, Larson noted. “They’re struggling out there to maintain relevance, with so many oncologists aligning with delivery systems. That makes it all the more important for us to understand what each other is doing.”The relationship may go far beyond words and extend to direct contracting arrangements. Larson expects this to be a key trend in the near future. “Pulling some of the waste out of the system is one of the goals, and I think that unless we start collaborating with each other and having open dialogues about what the challenges are, we’re not going to get anywhere.”

The OMH Steering Committee includes oncologists, administrators, advocates, payers, and various others. “It’s meant to be a gathering of key stakeholders, and oftentimes these stakeholders were enemies or adversaries,” said Bo Gamble, director of strategic practice initiatives for COA. “We said, ‘OK, it’s time to put down the guns. Let’s figure out this thing together.’”

Gamble explained that it’s not a comfortable situation for an oncologist to sit down with an employer and work out solutions that encompass all employer concerns about the treatment their employees are receiving. That involves a level of partnership in decision making, and discussions went slowly at first until a common language was achieved. “We’re in the early education phase to get in front of the employer and say, ‘Here’s how you can judge good versus better versus excellent cancer care.’” Employers are demanding measurable results and detailed roadmaps for treatment that demonstrate that oncology practices are giving them what they are paying for, he said. At the same time, certain employers are offering their employees cash incentives to make wise but frugal decisions in cancer care, he added.

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