Taking Aim at Cancer Costs

Health Alliance Plan (HAP), a Detroit-based regional health plan, is among a handful of payers experimenting with different payment models and protocols for the treatment of cancers.

According to a study that appeared last year in the New England Journal of Medicine, annual direct costs for cancer care will increase by $69 billion to $173 billion in 2020. Among the cost drivers is the increased cost of therapies. The sales of anti-cancer drugs are second only to those for heart disease.

HAP, along with Cardinal Health Specialty Solutions and Physician Resource Management, an oncology physician consulting firm, are working together on an evidence-based clinical pathways program that it hopes will improve the treatment quality and lower the costs of cancer care.

Cardinal Health Specialty Solutions will provide education and training and the technology used by HAP physicians to implement and monitor the program. PRM is assisting in physician recruitment.

HAP is a subsidiary of Detroit's Henry Ford Health System and has about 650,000 members in Michigan.

Historically, managed care has taken a hands-off approach to oncology services, explains John Calabria, MD, HAP's medical director. But with more than 900 new cancer drugs in the pipeline, it's time to be "proactive and assure our members that evidence-based treatment is being followed."

He notes that over-utilization of less effective drugs is a bad thing and so is under-utilization of effective drugs. "We want to help oncologists assure appropriate care."

The HAP program joins efforts by UnitedHealthcare, Humana, Florida Blue, and other payers, which have focused on bundled payments and accountable care organizations to stabilize revenue streams and payment structures in the emotionally charged cancer treatment arena.

For the first year, the HAP initiative will focus on breast, colon, and lung cancers. Calabria explains that according to national data, these are the cancers with the most drug expenditures and the most variation in patient treatment.

"When we look at the data, these are the cancers where the most opportunity lies to reduce treatment variance. Normally, when you reduce variance, you improve quality and promote efficacy," he says.

The HAP effort will include the appropriate use of generic chemotherapy. "If there's no difference in quality and safety and the generic drug is less expensive, then there's no reason not to use it," says Calabria.

The insurer hopes to enlist 200 oncologists from its network to participate in the voluntary program. Among the program goals is to engage the oncology community, which Calabria says hasn't always been done up to now. In a productive first step, the best practices, or pathways, have been developed by a steering committee comprised of community oncologists and peers.

Down the road, HAP may look at expanding the program to radiation oncology management.

For now, HAP will monitor how physicians perform against the pathways and monitor outcome measures, which may include reduced emergency department visits and hospital admissions as a result of chemo-related complications.

To promote the use of lower-cost generic chemotherapy drugs, Calabria says HAP has worked to increase—not decrease—the provider reimbursement for generic oncology drugs. Cutting reimbursements would be a "disincentive" for physicians to use generics, according to Calabria.

"This isn't a utilization management program," he explains. "We don't want to discourage generic usage by not reimbursing correctly."

Calabria acknowledges that oncology cost and treatment management is a "new frontier. It's emotional." Among the hoped-for outcomes of the program is that the pathways provide physicians and patients with the clinical support they need to feel more comfortable with getting ready for end-of-life care. "At some point we need to stop treatment when there's no support for it anymore."

Calabria expects the HAP program to get underway later this year.