Journal Logo


UnitedHealthcare's Lee Newcomer, MD

Let's Change Incentives to Reimburse Oncologists for Taking Time to Think about Cost-Effective Treatments With Same Outcome as More Expensive Methods

Butcher, Lola

doi: 10.1097/01.COT.0000315975.03112.da
  • Free

As Senior Vice President of Oncology for UnitedHealthcare, Lee N. Newcomer, MD, is responsible for improving the quality—and controlling the cost—of cancer care for the nation's second largest health insurer. A board-certified medical oncologist who practiced for nine years, Dr. Newcomer helped start an early consumer-directed health care firm and currently serves as chairman of suburban Minneapolis' Park Nicollet Health Services, an integrated system that includes a 425-bed hospital and nearly 650 employed physicians.

In his view, three trends—the rising incidence of cancer, the increasing cost of new therapies, and the difficulty many people have in obtaining health insurance—are gathering strength to foment a crisis.

“We're running into what I call the perfect storm for oncology,” he says.

And it is not clear to him that anyone can keep the ship from capsizing.

Insurers sometimes criticize oncologists for inappropriately treating patients and wasting a lot of money by doing so. What is your perspective on oncologists' role in that “perfect storm”?

Dr. Newcomer: I think we are all realizing how unsustainable the system is. I'm guessing, at least from my discussions with physicians, that many oncologists feel like they can't, as just one individual, make much of a difference. The other problem right now is that the incentives are not aligned to have them think about how they make a difference.

We need to eliminate waste. Here's one example: There's a technology, a lab test, that can identify circulating cancer cells. Using that test, it is possible to tell, at least in breast and colon cancers—and these results are published in The New England Journal—within one cycle of chemotherapy whether that patient is responding. The technology has been out for two or three years and no one is using it (see box).

Why? A cynic might say it's because the oncologist wants to treat for three or more cycles. I think more likely it is because the physician would have to have a painful discussion with that patient almost immediately that “This regimen didn't work; I'm sorry.”

This technology is cheaper than an x-ray, and we don't use it. Think about all the money we could save if that technology was adopted nationwide overnight. Think about all the side effects that could be avoided with the same approach.

You have proposed that any oncologist who uses a therapy off-label should have to enter that patient in a registry that tracks outcomes. How will that idea fly with the typical oncologist?

Dr. Newcomer: I think the oncologist would say, “It's a lot of extra work if I've got to register this data somewhere.” But that might be the price we have to pay for new off-label usages.

Here's where my viewpoint comes from: In 2006, we looked at patients in our system who had cancer of the pancreas. There were 244 of them, and they received 188 different treatment regimens. So here are people getting treated all over the country with made-up regimens, and I don't know [now] whether any of them worked.

So what did we gain both as a society and as a profession? Nothing.

I have shown that pancreas cancer statistic at a lot of oncology meetings, and most people don't disagree that we should stop the futile treatments. It's tough to say we don't have any more options—that's a hard conversation to have—but I don't think it excuses us for treating someone with a regimen that isn't going to be effective.

If we had registries, at least a year or two later we could say, “OK, all the people who got treated with drug Y, it didn't work. Let's stop doing that.” Let's stop wasting all of those resources, and let's stop exposing those patients to drugs that are totally ineffective.

We might be able to use claims databases as registries and avoid the additional paperwork. We're experimenting with that approach at UnitedHealthcare now.

In a recent interview published in Health Affairs, you said that the federal government should establish cost-effectiveness guidelines—that is, that “the government could say that anything more than $40,000 per year of life gained is unacceptable.” Considering that most of the 400 new therapies in the pipeline will cost around $50,000 a year, how should oncologists think about your remark?

Dr. Newcomer: I mentioned $40,000 because that's what the level has been roughly set at in Great Britain [by the National Institute for Health and Clinical Excellence]. Whether that number is $40,000 or $100,000 in the United States isn't important to me. What we're going to have to do, though, is start having this discussion. Where is our threshold for how much we spend to gain an extra year of life in oncology?

The government is probably the best forum. They're going to feel the financial impact the most and they pass it on to physicians immediately. Today if Medicare does not meet its budget, they simply take the shortfall out of physician and hospital reimbursement for the following year. That's not a sustainable model.

They are most likely to be forced to say, “OK, we're finally going to have to come to the decisions that certain treatments we can't afford to pay for, or we will narrow those people who are eligible for those therapies.” I think it's going to take a pretty substantial crisis for that discussion to start in the United States. We're very uncomfortable with the topic.

The other question is: What's the right threshold number? That's a public policy debate, but somebody has to start out with a number and we can debate whether it's too high or too low.

Let me just tell you, though, how far off we are today. About a third of the patients who get bevacizumab, Avastin, for lung cancer respond, and their average prolonged survival time is two months. You don't know who is going to respond, so you end up having to treat all patients.

When you do the math it costs about $340,000 for one additional year of life using that drug in lung cancer. That's using Medicare reimbursement rates, so it would cost me more. We accept that today in the United States.

Patients want their doctors to save their lives—in some cases even if that is only for a couple of months. So what is it that you would want an oncologist to do?

Dr. Newcomer: Today finances really don't play a role in the decision-making process [for treatment]. If there is a benefit, even though a very small one, most insurers are required to pay for that treatment. We don't have any system that looks at the relative cost per gain and makes coverage decisions that way. Many European and Canadian countries do, obviously, but we don't in the United States.

We are going to have to move to those kinds of decisions to keep health care affordable. My personal opinion is that in the United States it will take a financial crisis before that ever occurs.

But there are many situations in oncology where you have more than one alternative to get the same result. We would like you to think about what is the most cost-effective alternative and use that regimen. Unfortunately in today's reimbursement system, that means you're going to lose the profit margins on more expensive medicines, or perhaps longer therapies.

UnitedHealthcare is currently studying a new approach with a large oncology group. The oncologists looked at the literature for breast cancer regimens and said, “We believe we've got several alternatives and we're going to pick the most cost-effective therapy and that's the one that our group is going to use.” I want to emphasize that the physicians made the choices, not the insurer.

We are now measuring the difference in cost between the way that group treats patients versus other oncologists in the United States. If there is a difference, we will share that difference with that group. So they might get a retainer—the first time a breast cancer patient walks through the door they might get a $10,000 check for accepting the patient. Under that system we could just pay costs for drugs without hurting the doctor financially and we can allow them to pick the drugs they think are most effective but also most cost-effective.

Now, does that patient have less chance of survival? No, not at all. They're still getting drugs that professionals believe are equal in efficacy and results to other combinations of drugs. They just happen to be less expensive.

So that's a pay-for-performance demonstration?

Dr. Newcomer: No, it's not pay-for-performance. Pay-for-performance is, “Here's a process I want you to do and every time you do it, I'll give you a check. The model I just discussed is compensation for the extra work involved in making choices.

Pay-for-performance is good in a lot of primary care areas where there is good evidence about exactly the right thing to do. We're not there in oncology. I don't have any way of saying to oncologists, “You should use drugs A, B, and C for breast cancer each and every time, and then I'll give you a bonus check.”

What we're saying instead is, “We want you as a group to decide what the best approach for breast cancer is and stick to it. That's what we're going to reward you for. Over time we'll compare your performance to other groups because we'll have good data that way, and we'll try to find out what the best solution is in the United States.” Eventually—many, many years from now—we may say, “OK, drugs A, B, and C are the best way to treat breast cancer,” and we would give a bonus for doing that. But we're not there.

The other issue with pay-for-performance is that the bonuses typically are one to three percent of total revenue, and that is not enough to sway behavior in oncology.

If I'm a patient, I might not be too happy knowing that my oncologist has a financial incentive to consider cost when deciding how I will be treated.

Dr. Newcomer: Patients today walk in the office and they have no idea that the therapy being chosen is usually the one that offers the greatest return to the oncologist. Today in that interaction there is information that isn't being shared.

I have no problem with the oncologist saying we're picking this regimen because it's also the most cost-effective. But we have to emphasize the other point time and time and time again: The treatment has the same result as the alternatives. We are not jeopardizing your outcome, but where we have multiple alternatives we are taking the one that is most cost-effective.

If there are multiple options available, in my mind the patient would be indifferent to which one is offered unless there was a substantial difference in side effects or results. Faced with several regimens that are basically the same, I'm going to look to my physician for what's the right thing to do.

If the trial that you describe reduces the cost of cancer care, how long until United adopts this approach with all oncologists?

Dr. Newcomer: The first phase is: “What, in your belief, are the most cost-effective good-outcome medications?” I would like to begin starting that. It's our intention to contract with a few groups on that basis in this year.

The second phase starts after several groups have chosen their regimens and are treating patients in a standardized fashion. We will then be able to help groups compare themselves with others. I may take a group in California and show them what somebody is doing in the southeastern part of the United States. If one group demonstrates fewer hospitalizations or much lower costs of therapy with the same kinds of outcomes compared with other groups, we should all learn from their approach.

We can put those two groups together and say, “Here's a best practice. Maybe we should think about California switching to that same principle.” But we would be able to do that on the basis of some data. Phase two could realistically begin as soon as 2010.

It is not getting any easier to practice oncology, and the costs of doing business are not going down. But should oncologists just accept that their take-home pay will steadily decrease?

Dr. Newcomer: I don't think it makes any sense at all to try to reduce physician incomes right now. Most oncologists are graying out. At age 55 I'm in the median on age for oncologists, and there are more patients coming down the pipeline. There will be a market crunch in finding oncologists.

What I pay the oncologist himself or herself is not what's breaking the bank. It's what they do with their pen that's causing most of the escalating costs. With today's incentives they are encouraged to choose the treatment that is most expensive because they get their income from that.

I don't think it's realistic to think that their incomes are going to drop. But we're going to have to change the incentives so the oncologist is reimbursed for taking more time to think about what's the most cost-effective approach to solve a problem.

Rather than using the alternative where he or she gets maximum reimbursement, I want that oncologist thinking about which is the most cost-effective way.

© 2008 Lippincott Williams & Wilkins, Inc.
    Home  Clinical Resource Center
    Current Issue       Search OT
    Archives Get OT Enews
    Blogs Email us!