Effects of rising drug costs on efforts to control overall cost at a large academic cancer center

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Background: Value-based payment programs like the Oncology Care Model (OCM) have focused efforts to reduce costly acute care use through improvements in access and coordination rather than targeting the exponential rise in pharmaceutical pricing. We assessed how participation in OCM affected total cost of cancer care at a large academic cancer center. Methods: Using Medicare claims for Yale-Smilow Cancer Hospital, an NCI-designated cancer center with an academic hub and 10 community practices, we identified episodes for chemotherapy initiated during a historical period (pre-OCM, 2012-2015) and performance period (post-OCM, 2016-2017) following OCM criteria to identify total cost of care. We reported frequency of utilization categories, the mean cost per episode, the proportion of total cost attributed to each utilization category and compared pre- and post-participation periods. Results: There were 8,843 episodes during the historical period and 6,679 episodes during the performance period. The mean total cost per episode increased from $28,645 to $32,666, but this was less than the Medicare-defined expected increase (target price). Between the two periods, the percentage of total episodes decreased for emergency department (ED) use from 36% to 33%, inpatient care from 33% to 29%, and post-acute care from 28% to 25% (p < 0.01). Mean costs of drugs per episode increased by 27% between periods, and from 52% to 58% of total cost of care (p < 0.01). While mean cost per episode for ED, inpatient, and post-acute care remained stable, the mean cost per episode for antineoplastics increased 39% from $10,676 to $14,843. Conclusions: After implementing OCM, we beat the Medicare target largely by decreasing acute care use and stabilizing the cost of hospitalizations and ED; however, actual cost increased largely due to pharmaceutical spending. Because drug costs were the largest proportion of overall cost of care, future value-based models must address the rising cost of pharmaceuticals.

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The effect of guideline-concordant novel therapy use on meeting cost targets in OCM: Results from a large community oncology network

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Background: The Oncology Care Model (OCM) is intended to incentivize physicians to improve the quality and reduce the cost of cancer care. In OCM, providers are accountable for all costs during six month episodes of care relative to target costs (TC) derived from a baseline spending period (BSP; 2013-2015). This accountability is intended to foster care coordination to reduce preventable emergency department visits and hospitalizations (EDH). Benefits of reducing EDH may be diluted when new treatment indications for costly immunotherapies (IO) are introduced into clinical practice after BSP. Methods: We identified all non-small cell lung cancer (NSCLC) and bladder cancer (BC) OCM episodes attributed to Tennessee Oncology (TO), a large community oncology network of over 90 oncologists, during performance period 2 (PP2; the most recent PP with available data). We selected NSCLC and BC because both diseases have IO indications that became standard of care after BSP. Using claims data analytics software, we identified all NSCLC and BC episodes with spending above TC, and found a subset of these above target episodes (ATEs) without any EDH that remained above TC due to IO use. Two medical oncologists reviewed these cases in duplicate to assess guideline concordance of IO. Results: During PP2 there were 2,623 OCM episodes attributed to TO, including 240 NSCLC and 31 BC episodes. Spending was above TC in 118 (49%) and 13 (42%) of NSCLC and BC episodes, respectively. For these NSCLC and BC ATEs, EDH was prevented in 62 (53%) and 5 (38%) of cases, respectively. In NSCLC and BC ATEs without EDH, 43 (69%) and 5 (100%) of episodes included IO, respectively. Clinician review in duplicate (S.M.S.; C.A.W.) found that the use of IO was NCCN guideline concordant in 33 (77%) and 4 (80%) of these NSCLC and BC cases, respectively (K = 0.87). Conclusions: Guideline-concordant use of expensive IO as its treatment indications expand poses substantial challenges to meeting cost targets in OCM, even when practices prevent EDH. [Table: see text]