Health-Care Reform Is Changing the Oncology Landscape

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Rena Conti, PhD

We can keep the current system as it is, but we need to make reimbursement more closely match the acquisition costs of these drugs, essentially wringing out the profit that chemotherapy provides in the outpatient setting.

—Rena Conti, PhD

Value-based health-care reform is happening. We have to get on board,” Rena Conti, PhD, a health economist at the University of Chicago, advised attendees of the Best of ASCO Seattle meeting. She discussed highlights from Annual Meeting sessions that addressed the impact of the Affordable Care Act on the field of oncology and on disparities in care.1,2

Imperative for Reform

High and persistently rising national spending on cancer care underscores the urgent need for reform, according to Dr. Conti. “Spending on cancer care outpaces [gross domestic product] growth in the United States, but also spending growth in health care more generally,” she noted.

Contributors to this phenomenon include aging of the population and breakthroughs in therapy in the past few decades.

While survival for many cancers has improved in recent decades, overuse and underuse of effective cancer treatments also coexist in our system. There are also stark racial disparities in outcomes, suggesting at least some role for differences in access across population subgroups.

Furthermore, the incentives drug manufacturers face for pricing new cancer therapies are “perverse,” she maintained. Patients pay relatively little for their care after insurance and copay assistance, undermining their ability to “shop” for effective treatment at reasonable prices. Physicians and hospitals have no comparative effectiveness data for many cancers and available treatment to help guide treatment choices. Insurance coverage is virtually guaranteed for U.S. Food and Drug Administration (FDA)-approved cancer indications.

Most cancer treatment remains paid for by Medicare fee for service, “which rewards physicians and hospitals to do more, even when the value of doing more for an individual patient is minimal,” Dr. Conti commented. Indeed, current estimates suggest a sizable proportion of oncology outpatient practice profit comes from the administration of chemotherapy.

Ensuring Access, Quality, Innovation

Given the need for reform, the next question is how best to proceed. “What reform should do is improve access to and quality of cancer care, preserving the incentives for innovation while reining in spending,” she said, proposing several steps that are critical for meeting these objectives.

“First, we must measure and identify best cancer care practices across a wide variety of cancer subtypes treated in the outpatient and inpatient settings.” Efforts such as ASCO’s Choosing Wisely initiative are important steps in the right direction, Dr. Conti said.

Next is changing drug reimbursement policy. “We can keep the current system as it is, but we need to make this reimbursement more closely match the acquisition costs of these drugs, essentially wringing out the profit that chemotherapy provides in the outpatient setting. Alternatively, we can change the locus of responsibility for purchasing drugs from oncologists and their practices to pharmacy benefit managers, group purchasing organizations, and insurers,” she elaborated.

“Either way, these reforms require adopting policies that replace ‘buy and bill’ with reimbursements that reward oncologists for what they do every day for their patients.  “We must strive to keep oncology practices ‘whole’ during this transition to make sure access is not disrupted for patients,” Dr. Conti said. Ongoing efforts to move away from fee-for-service reimbursement and toward episode-based reimbursement are consonant with these goals.

Maintaining quality of care will also be key. “You cannot alter the incentives for reimbursement where doctors are responsible for a full episode of care for a patient without making sure that quality incentives—both in terms of the measurement and also in terms of the reporting of these measures—are in place. These metrics must be meaningful. Without them, we could transition from a system that rewards physicians for doing too much toward a system that rewards stinting on access or quality of care for patients with cancer,” Dr. Conti said.

 “Payers could move to a reimbursement system where physicians and hospitals get paid for treating a given cancer subtype based on some level of evidence,” Dr. Conti added. “Essentially this would mean that reimbursement would no longer be based only on indication-drug pair, but practices could be reimbursed for their choice of treatments based on a menu of treatments related to the evidence supporting that use.”

Reform must also ensure that the pharmaceutical industry still has incentive to innovate. “The key is how we get those cures, how we get those breakthroughs,” she said. Possible reforms could include additional payments to drug manufacturers for major advances in certain cancer subtypes, and/or additional patent life.

Stakeholders’ Roles in Reform

“I believe that each stakeholder has a role” in the ongoing health-care reform, Dr. Conti concluded. “Providers must be willing to try innovative ways to responsibly control costs while improving quality; they may have to give up revenue from the drugs in order to go to a different type of system. Payers need to assure the best use of limited resources for the development of innovative benefit designs for patients and also reimbursement models for patients,” she said.

“Finally, drug manufacturers must find ways to innovate in the most cost-effective way possible to try out novel reimbursement schemes that are linked to value and while continuing to provide patient assistance to ensure patients who are not insured or are underinsured get treated,” she added. ■

Disclosure:  Dr. Conti reported no potential conflicts of interest. 


1. Polite BN, Conti RM, Shulman LN: Health care in America in 2014: Current and future implications of the Patient Protection and Affordable Care Act. ASCO Annual Meeting. Education Session. Presented May 31, 2014.

2. Bickell NA, Andrulis D, Katz SJ: The winds of change: Cancer disparities in the health care reform era. ASCO Annual Meeting. Education Session. Presented June 2, 2014.

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