Focusing on Clinical and Economic Outcomes-Not Guidelines

EBO:

What’s your opinion today about the state of oncology care and payment?

Interview With Andrew Pecora, MD, CPE, President, Regional Cancer Care Associates, Chief Innovations Officer and Vice President, Cancer Services, John Theurer Cancer Center at Hackensack University Medical Center

Dr Pecora: Oncology is at a crossroads—more people are living longer, and therefore, more people will develop cancer, which means that we are using more drugs and surgical technologies to keep people alive longer. This means oncology care is getting more expensive, and on a macro level, this contributes significantly to increasing healthcare expenditures. Over time, some cancer care may become unaffordable, which could lead to the need to ration care—and that would be tragic. At this crossroads, we have to do something that allows us to modulate the growth of the cost of cancer care while avoiding rationing.

EBO:

Healthcare payers are attuned to limited budgets and the possibility of rationing down the road. One way they seek to slow the growth in costs of oncology agents is by changing the distribution model, and moving toward the use of specialty pharmacy providers. Do you see that as a positive complement to provider side efforts to modulate the cost of cancer care?

Dr Pecora: I don’t know if that will avoid a discussion of rationing, but I really hope we can avoid that. I do believe that we need to do something different. Efforts to improve compliance with clinical pathways are not all that helpful because that is a surrogate of quality and a surrogate of cost-effectiveness. On the contrary, I believe we should just go straight at it. We should insist on a certain progression-free survival and overall survival outcomes at a given cost, and let the providers decide how they’re going to accomplish that.

EBO: It sounds like trying to commoditize the quality outcome in cancer care.

Dr Pecora: This is a pathway away from having a nation of cooks and toward promoting a nation of chefs. If we set our sights on buying a specific outcome, then we can approach it like buying other products, such as a car or a computer tablet—you know what the output is, and you want the best possible cost to achieve it. That’s where we have to get to in cancer care. Here’s a concrete example: If you know you can cure 80% of people using a 5-drug combination, but you can also cure 80% of people using a 2-drug therapy, we have to create the economic incentives to encourage prescribers toward that option. One might be to have the cost of the additional drugs come out of the pocket of the prescriber— that’s a bit simplistic, but it’s a critical point. This is different from saying, “We’ll pay you a bonus because you complied with this pathway.” We’re targeting the outcome, not the surrogate for quality care.

Therefore, we may instead say, “There are various ways you can achieve this outcome, but here is what we’re expecting to pay for this outcome. And, if you deliver it at this cost or even lower, there’s room for you to make a profit like any other business. The lower the cost for delivering this quality outcome, the more you make.” Now the incentive is completely aligned because you’ve pegged the outcome as the target. If the outcome is the target, there shouldn’t be a concern about lowering quality as you’re reducing cost.

EBO: So then the clinical pathway is basically irrelevant as long as it works?

Dr Pecora: That’s right. The clinician can use any pathway that works, but he or she must obtain the best outcome at (or below) the benchmarked cost.

Let’s use breast cancer as an example. A clinician may want to prescribe a patient adriamycin and cyclophosphamide, but paclitaxel and cyclophosphamide cost the same amount of money, with identical outcomes. Should we spend time tracking prescribers on how they use one or the other (and did they give the doses on time), or do I just want to track the thing that counts the most—the patient’s outcome? If the outcomes are in line with what they should be, and the provider’s costs are not above what the cost should be, then that’s great. However, if the outcomes are poorer or the cost of treatment is greater than it should be, then my providers will hear from me.

Why shouldn’t we measure as the key outcome of what people are delivering— overall survival and progression- free survival—as long as it’s tied to an appropriate cost?

EBO: Let’s talk about Regional Cancer Care Associates (RCCA). How long has RCCA been in existence and what is your overall mission?

Dr Pecora: We came into existence January 1, 2012, and our mission is to provide the highest quality innovative cancer care, at the best possible cost.

EBO: It seems like RCCA’s 70 providers are spread throughout the state. Are they integrated in any form?

Dr Pecora: Well, we’re 1 company. We have 1 tax ID number; 1 provider number. We have the same health resources, pension, etc.

We are codeveloping standards of care that the group is committed to following. We’ve already created new image guidelines that we’re now following, which significantly reduce the amount of imaging that was otherwise done routinely in practice. The excess imaging procedures are not medically necessary and, in fact, they may be potentially harmful and waste money.

We’re now preparing bundled packages that we will offer to payers for specific services. We want to sell products into the marketplace, not services.

EBO: Is your information technology system integrated as well? Can you share these pathways and medical records among practitioners?

Dr Pecora: Not to that extent—yet. We’re integrated in that we have 1 billing system. We’re integrated in terms of pathways. We will soon be integrated in terms of following the outcomes of our patients through a cancer outcome tracking and analysis (COTA) system. We haven’t linked all of our electronic medical records yet.

EBO: You recently signed a contract with Horizon Blue Cross Blue Shield. How has this changed the ballgame for RCCA?

Dr Pecora: To their credit, Horizon sees the value of working with an organization of our scale, to work collaboratively to provide a high-quality product across the entire state at the best possible cost to their subscribers.

We’ll achieve this in part by reducing expensive sites of service, reducing unnecessary testing, and reducing redundancy of testing. We’ll also be creating service bundles: If we treat a person with a very specific condition, you will get this outcome and we will charge you one price for this. We assume the risk.

EBO: Do you have a baseline or database of benchmark costs that you’re targeting for the individual types of cancer treated by your providers?

Dr Pecora: No, not yet. Our contract with Horizon helps us get there. In other words, we’re working toward offering bundles, and it will take some time to get there. We’re putting the outcome tracking and analysis system into practice now, so that we can track outcomes and costs to create the database that we need to create the bundled charges. We will be able to show Horizon transparently the outcomes obtained with 1 particular treatment, which match the national standards for best practice. We will show Horizon the best outcomes we can achieve, and we will charge them this bundled amount, understanding our cost.

EBO: Are you seeking to expand the number of providers in New Jersey?

Dr Pecora: Yes. By the end of the year, we’ll be over 100.

EBO: Will RCCA seek to contract through this model with accountable care organizations (ACOs)? It sounds like a great fit.

Dr Pecora: Well, not just now. Today’s ACOs are based primarily in primary care. However, I do think that there will be relationship opportunities between RCCA and ACOs.

EBO: Do you think the RCCA model is an early vision of the future of cancer care if we will be able to modulate cancer care?

Dr Pecora: I don’t think we can modulate the cost of cancer care and avoid rationing without controlling how and where care is delivered at scale. You need to drive out inefficiencies and waste and incentivize people to think, “If I do it this way instead of the way I used to do it, not only does the patient get the best outcome, but I’m driving down cost and I’m driving margin to my bottom line.”

Like any other business, that’s the incentive I want to create.Participant Affiliation: From Regional Cancer Care Associates; John Theurer Cancer Center at Hackensack University Medical Center, Hackensack, NJ.

Funding Source: None.

Participant Disclosure: The participant reports board membership with Regional Cancer Care Associates.

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