Tough Questions About Health-Care Reform Put Economist in Hot Seat

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Measuring quality of care is hard in practice — particularly for many cancer subtypes where there aren’t widely accepted treatment pathways that are very well validated and accepted. ASCO’s involvement in defining quality of care is critical.

—Rena Conti, PhD

Although diverse stakeholders agree that health reform is needed, there is little consensus on the specifics of that reform. Best of ASCO Seattle attendees put a number of pointed questions to health economist Rena Conti, PhD, of the University of Chicago, asking about thorny issues such as cost control, the parties steering reform, and the impact on practices.

Drug Costs

Is it time for the FDA to start entertaining the question of “me too” drugs or the additive cost of new therapies? Is it part of the solution to mandate, for example, that new technologies be proved to be superior rather than be proved to just be more costly?

The U.S. Food and Drug Administration (FDA) has absolutely no congressional power to assess costs in its evaluation of drugs or devices, and I do not expect that this Congress is going to award the FDA that responsibility…. In the past, Congress has entertained the possibility of awarding the Centers for Medicare & Medicaid Services (CMS) this responsibility. It has passed. The closest we have come is the implementation of Medicare Part D, where commercial insurers and pharmacy benefit managers were awarded responsibility for negotiating drug prices on behalf of their patients, including Medicare beneficiaries.

Given this, what I am arguing for is a practical approach to reform. We are already seeing commercial insurers and some large practices making decisions about cancer drug coverage and reimbursement. Other reform pilots are taking physicians and hospitals out of the drug profiting business altogether. 

Non-U.S. Health-Care Systems

A number of drugs confer minimal benefit if at all, but cost up to $15,000 or more a month. Yet the same drugs are not approved 50 miles north of here [in Canada] or in Europe, where there is an organization that decides the benefit drugs can confer, and if this organization does decide these drugs are effective, they are approved oftentimes at 10% or 20% of what it costs us to buy the same drugs here. How do you place that in the context of utilization?

I don’t believe we are going to have a National Institute for Health and Care Excellence (NICE)-type or Canadian Health Technology Assessment (HTA)-type system any time soon. We have gone through many years of health reform debates. Each one of these health-care debates entertained the possibility of a government agency that would negotiate on behalf of fee for service Medicare beneficiaries. Each time, those types of provisions have failed Congressional approval. 

I’m not arguing that this type of system may not be effective in mitigating high drug launch prices and price increases. I’m arguing as a realist, that we are not likely going to see this type of reform in the next 10 years unless things radically change in our political system.

The other aspect of prices that I think is incredibly important to understand is that many of the drug prices that have captured the American public’s attention are list prices. These are sticker prices, like those seen in a car dealership. Virtually, no one pays those list prices. There are considerable discounts that drug manufacturers give to certain types of purchasers of these drugs under the current U.S. system. These discounts may not be passed on to payers or patients. That is a problem. There are also patient assistance programs that can be quite generous for certain types of cancer drugs.

Copayment Issues

[I disagree about] the large availability of copay assistance. If you put yourself in the shoes of the patient, you cannot afford those drugs, you have no copay assistance available to help, and you are desperate to get needed treatment.

I do not doubt that you have patients who are struggling with the amount of money that they need to spend on cancer care, but coinsurance payments for fee for service Medicare beneficiaries are actually pretty low. My argument is a larger one, which is the following:  Pharma does provide very generous copayment assistance for many cancer drugs for non-Medicare beneficiaries. Many of these have high-income thresholds. This is a type of discount that allows Pharma to charge high prices for other paying segments of the market.

Input on Costs

The problem that I have whenever I hear an economist speak is that they use the word we. And I’m not sure who “we” really are. I know “we” includes economists, insurance company executives, drug companies, and politicians. But I don’t think it involves doctors enough. Nobody knows more about oncology than we do. The problem here is that we can tell you a lot of what to do, but we’re not consulted on a lot of these things.

By “we” I mean myself and my friends and colleagues at the University of Chicago Comprehensive Cancer Center. I am also a member of ASCO, and I am deeply committed to ensuring in this period of transition treating oncologists in the community and in academic medical centers are engaged in reform. When I use the term we, I mean that the ASCO membership needs to get in front of these very tough, but very important discussions, including what do we mean by quality of care and how do we measure it best, how do we want to be reimbursed to provide the best care for our patients and keep the lights on in our practices? We must get in front of these issues to argue from a position of strength.

Measuring Quality of Care

Who is determining the quality measures, and what tools are they using to measure quality of care? One of the methodologies that CMS is using is very subjective, like giving patients questionnaires asking, “How do you think your doctor [is doing]?”

Under health-care reform, there are currently 108 measures that are required to be collected by outpatient medical practices. Those measures are largely related to patient satisfaction and other types of process measures not related to specialty care. A handful of those measures have something to do with cancer care, but those are mostly about preventive screening, not necessarily about the outcomes of actual cancer treatment. Those quality-of-care measures were adopted by CMS many years ago.

The important thing for you to know is that under reform oncology practices are going to be required to start measuring and reporting these outcomes starting next year. Soon payment is going to be attached to your performance on these measures. The decrement in payment is not a very large share of total practice revenue; it’s approximately 1% to 3% of Medicare reimbursement if you fail to meet these quality requirements.

I agree with your comment’s sentiment that quality of cancer care is not very well captured by these measures. I suspect that there will be more quality measures identified and tested in the coming years by large practices and commercial insurers. Measuring quality of care is hard in practice—particularly for many cancer subtypes where there aren’t widely accepted treatment pathways that are very well validated and accepted.  ASCO’s involvement in defining quality of care is critical.

Finally, the tying of quality with payment goes both ways. If you and your practice can demonstrate very significant quality of care over competitors, there is no reason that insurers won’t try to use those quality measures to steer patients toward some groups over others. ■

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


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