This spring, the American Society of Clinical Oncology became the first medical society ever to propose an entirely new way of paying for specialty medical care (OT 5/25/24 issue).
ASCO President Peter Yu, MD, a medical oncologist/hematologist and Director of Cancer Research at Palo Alto Medical Foundation, discussed ASCO's strategy in an interview for OT's iPad edition. His remarks have been condensed here:
Why did ASCO propose a new way to pay for cancer care?
Peter Yu, MD: “If you look at the political dialogue that has been going on about health care payment reform, it has focused more on how will the insurance products play out to improve access to care. At the end of the day, when the political debate is all finished, they will turn to us and say, ‘Do a better job with less.’
“We certainly will continue to fight for more funding in the system, but the reality is that we need to start thinking about how are we going to do it. ASCO's proposal is to begin to allow us to change the rules of the game so we can more nimbly adapt to an increasingly challenging environment.
“The Institute of Medicine in 2009—and this applies to all of medicine, not just oncology—estimated that there was $190 billion each year in wasted administration costs. This is referring to billing-type costs. Another $130 billion each year is wasted in inefficient care-delivery processes. So we're talking about over $300 billion a year. Even if they are off by 50 percent, you're still talking about $150 billion a year.
“Put that into the perspective of what it would take to reform [the Sustainable Growth Rate], which is this year's and last year's hot topic in Congress. The price tag for that is a $40 billion or $50 billion one-time payment. And here we have so much more potential for reducing waste.
“So we really need to get a handle on how we can deliver care more efficiently and more affordably. That is why ASCO is motivated to do this to stay ahead of the game.”
How would ASCO's payment proposal change the way oncologists are paid?
“The Consolidated Payments for Oncology Care model is based on an episode-of-care model, a bundle of one-month increments. The first reaction is, ‘Gee, isn't this just capitated payments, and didn't that crash and burn a decade ago?’ The answer is: ‘This not your father's HMO capitated plan.’
“'The problems with that are now well known. Those capitated payments were generally for one year, and it's just impossible to know what a cancer patient is going to require a year in advance. We have shrunk that down into 30-day increments, because certainly you can reasonably predict how a patient is going to do over the next 30 days, and if the patient does significantly better or significantly worse than expected, the following month that will be corrected. So by shrinking down the time period to one month, we think we will have a manageable amount of risk.
“The reason for doing this is to get to that $130 billion in inefficient care delivery and that $190 billion in administrative costs. This would reduce the number of billing codes that oncologists have to contend with, which is now 58, down to 11. So it would reduce the amount of time wasted on trying to figure out how many minutes I spent face-to-face with a patient or how many minutes the nurse was there by the bedside when the patient was getting chemotherapy.
“It will also allow us to take care of patients using the entire health care team most efficiently. We are trying to unleash the creativity and innovation that we think practices can come up with on their own and spontaneously, at a grassroots level, find the best way to deliver care in their local situation or environment.”
If this proposal is adopted, what will oncologists need to do differently than they do now to succeed in the current payment system?
“Measuring metrics such as the number of unanticipated hospitalizations and emergency department visits is well-recognized as a national measure of improvement, and comparing resource utilization and seeing if we can eliminate waste from things that we do that we really shouldn't be doing because they really don't help anybody very much. That alludes to [ASCO's Choosing Wisely] Top Ten list.
“It will require a practice to reorganize workflow and care teams to optimize resources and look at the patient from a global management issue. That may involve investment in new strategies or tools, or new human resources to accomplish that. It will probably require increasing use of electronic health records in a more intelligent manner than what we are doing now—and also looking at different practice-delivery models such as medical homes.”
What feedback have you received from payers?
“They are interested in improving the quality of care and reducing the cost of care, and I think most payers realize there are just a limited number of oncologists, so they have to work with us, because they have patients they need to ensure are getting proper care.
“The feedback has been positive. We have had some discussions with CMS, and obviously the model needs to be developed further, but people are willing to listen.”
ASCO has called for a “national dialogue” about its payment proposal. What happens now?
“After the town hall meetings at the ASCO Annual Meeting, we are also taking advantage of the town hall meetings at the Best of ASCO meetings. We have also started this dialogue with the state societies. We get individual member commentary through our ASCO Payment Reform website: www.asco.org/advocacy/physician-payment-reform.
“We have had discussions with staff in Congress, on both the Senate and House sides, with the committees that have jurisdiction, to obtain their viewpoint. They are very interested in this as part of any SGR reform package because they could demonstrate how the purported savings in SGR that aren't happening would accrue in any new replacement model.
“Finally, we have reached out to others in the medical community to get their reaction and input, with the idea that this model is being built for oncologists, but may be very applicable to many other specialties that deal with chronic illnesses.”
Consolidated Payments for Oncology Care
ASCO proposes replacing the current payment system with a bundled payment approach. Key features include:
- New patient payment: This would be much larger than what practices receive for initial office visits today and would pay for developing treatment plans and doing patient education and counseling.
- Treatment month payment: This payment would replace current payments for evaluation and management and infusion services. The payment would occur during each month the patient is being treated, regardless of the type of drugs used. Bigger payments would be made for patients with multiple health problems, poor performance status, and the need for more toxic and complex drug regimens. Reimbursement for drug costs would remain separate.
- Active monitoring month payment: This payment applies during months when a patient is not being actively treated but is still receiving support from the practice such as testing and monitoring for recurrences or progression of cancer.
- Transition of treatment payment: This additional payment during months when a patient's disease progressed or recurred or when significant treatment regimen changes are needed would reflect the extra time needed for treatment planning and patient education.
- Clinical trial payment: An additional monthly payment would be made for each patient participating in a clinical trial.
In addition to the five bundled payments, the practice would receive separate payments for tests, major procedures, and reimbursement for drugs it purchases for administration in the office.
Listen to the Full Interview!
To hear the full podcast interview, listen on the iPad edition of this issue as ASCO President Peter Yu, MD, describes the details of how a new way to pay oncologists could help solve the Sustainable Growth Rate physician pay problem.
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