The 2011 Summit survey, entitled Positioning and Payment for Oncology Within Accountable Care Initiatives, was conducted during the 4-month period of June through September 2011. Individuals at 36 organizations were surveyed through direct phone interview using a standardized survey instrument.
Candidate organizations for interview were identified from a number of sources, including: (1) roster of CMS Physician Group Practice Demonstration sites, (2) rosters of member organizations of the Dartmouth-Brookings ACO Learning Network and Dartmouth-Brookings ACO pilot sites, (3) media news releases in which organizations self-identified as launching ACOs, and (4) professional network referral and media releases identifying provider and payer organizations participating in oncology-specific payment redesign demonstration projects. A breakdown of the categories of organization interviewed is shown in .
Five Categories of Organization Interviewed
Survey interviewees were asked to respond to the following:
(1) Market and Competitor Profile
Is the character of the local market fragmented, somewhat fragmented/partially consolidated, or highly consolidated? And is the character of the local market minimally competitive/collaborative, somewhat competitive, or highly competitive?
Because of the wide range of organizational types interviewed, there was understandably a full range of responses to this question. However, a common characteristic recognized among proactive ACO responder organizations was that they were in somewhat to highly consolidated and competitive markets and were themselves somewhat to highly consolidated organizations.
(2) ACO Readiness
With respect to viewpoint on ACOs, is the organization characterized as proactive, exploratory, nonresponsive/wait and see, or not interested/ignoring? ().
Viewpoints Regarding ACO Readiness
Following are some noteworthy survey interviewee comments with regard to ACO readiness:
- “The proposed rules are so onerous that I am not aware of anyone in our market running to join” (oncology practice executive, southwest).
- “Most of our attention right now is on all the Medicare ACO data reporting requirements. How do we gather and report the data … our data is much better with diabetes or heart patients … we don't have that maturity with cancer data” (oncology executive, academic medical center, mountain states).
- “I don't think there has been a really consistent definition of cancer care … without that definition it's hard to dig financially into any organization's operations to determine true costs” (health plan executive).
- “Many organizations will find out they have to spend a lot of political capital with their physicians to get ready for ACO” (oncology executive, academic medical center, mountain states).
- “We are spending a lot of time and effort determining which physicians are fully aligned with us and which are not … because we want to know for our future ACO planning … we want to know who we should form relationships with” (health system cancer center executive, midwest).
(3) Oncology Positioning Within ACO Responder Organizations
How are oncologists aligned with the ACO responder organization: closely aligned/employed, loosely aligned, or nonaligned/competitive? Not surprisingly, given the profile of organizations in a position to take the initiative in responding to ACO regulation, the majority (65%) indicated that oncologists were closely aligned with and/or employed directly by the organization ().
Oncology Positioning Within ACO Rresponder Organizations
(4) Nontraditional Payment Methodologies Within ACO Responder Organizations
Nontraditional payment methodologies were defined for survey purposes as anything other than fee-for-service payment for oncology services, for example, capitation/subcapitation, episode of care, bundled payment, shared savings, or other methodologies that are not solely based on payment for discrete services provided (fee-for-service).
There were a limited amount of system-wide capitation methodologies reported (two health systems), but with oncologists paid at a negotiated fee schedule rate rather than a subcapitation amount. In addition, one system indicated that it was reimbursed a bundled rate from one payer for bone marrow transplantation procedures. Another system reported that it was in the process of implementing a bundled payment methodology for coronary artery bypass graft procedures, and that once in place, the system intended to pursue bundled pricing for oncology services for certain common cancers (breast, lung, colorectal, prostate, ovarian). Our assessment of this series of inquiries is that with regard to oncology/cancer care services within those organizations that are seen as most responsive and assertive with regard to an ACO undertaking, there is currently essentially no variation from traditional fee-for-service reimbursement methodologies in oncology.
(5) Prioritizing Oncology Within ACO Responder Organizations
Interviewees were asked to respond to the following observation. Did they agree or disagree with the observation, and why?
“The costs of cancer care are often singled out as escalating far more rapidly than health care costs in general (15% per year or three times the escalation in overall health care spending). Cancer patients represent only 1% of commercial patient, yet consume 10% of the commercial health insurance ‘spend.’ Yet oncology/cancer as a health condition/disease seems to be of lesser priority in context of ACO planning. High volume/low cost chronic diseases, such diabetes, asthma, heart disease, chronic obstructive pulmonary disease (COPD) are cited as better candidates for cost savings and for ‘lower hanging’ ACO shared-savings opportunities.”
Below are several noteworthy interviewee responses to this inquiry:
- “ACO concepts have developed around primary care physicians, and there has been much less thought given to subspecialty care … a problem with our current health care system is fragmentation in subspecialty care. I think that oncology care lends itself to medical home models” (health system medical director, southeast).
- “Oncology is too big and complicated to try and tackle … they are cutting their teeth on the more straightforward ones … hip, knee, heart surgery [are] much more predictable … cancer is too broad to get disease focus” (health system oncology service line executive, mid-Atlantic).
- “I think that there has been a lot of focus on chronic disease because it has been more predictable from a cost perspective. The point is to address costs across the whole continuum … and that is where global payments may be the tool to make this happen” (multispecialty medical group practice chief executive, northeast).
- “So much of the cost occurs in the 6-months end-of-life period … my point is we really spend too much money on futile care because we are afraid to have the conversations about end-of-life care with all its social and political implications … somewhere, somebody has to be courageous enough to say this out loud” (academic medical center medical director, physician network, northeast; health system oncology service line executive, mid-Atlantic).
(6) Oncology-Specific Nontraditional Payment Redesign
Despite the status of oncology/cancer care within the broader context of ACO initiatives, the commercial health insurance sector is quite actively pursuing nontraditional and innovative methodologies in payment redesign for oncology services, typically at the community oncology level. United Healthcare and Aetna have been involved in earnest with oncology-specific payment redesign pilot programs for the last couple of years: United Healthcare with its five-site episode payment pilot, and Aetna with its shared savings–oriented pilot with Texas Oncology. Much of the payer activity in bending the oncology cost curve has surfaced within the past year, with initiatives in oncology payment redesign underway with a solid representation from Blue Cross plans, including oncology-specific pilot/demonstration projects in Maryland, New Jersey, Tennessee, Michigan, South Carolina, and southern California.
Oncology-specific payment redesign methodologies tend to focus on drug cost reduction achieved through compliance with clinical pathways. The predominant model has been to compensate oncologists at a premium for compliance with agreed-on clinical pathways. Typically, 80% compliance results in enhanced drug reimbursement, and noncompliance can result in a reduction in reimbursement.