In the debate over whether patientcentered medical homes (PCMHs) and accountable care organizations (ACOs) will lead to health care system savings, Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes, Memorial Sloan-Kettering Comprehensive Cancer Center, discussed at a conference recently hosted by T

how new payment models are challenging the current fee-for-service model for community care cancer centers.

“I’m going to try to look into the future and lay out what I think are possible trends to pay attention to,” he began. “I don’t think there’s any question that we’re in a phase of what business school professors would call ‘creative destruction.’” According to Bach, the old model of fee-forservice is eroding, and with this erosion comes opportunities for new payment models of care. As with any opportunity, there are threats as well.

For example, with the latest statistics emanating from The Community Oncology Alliance (COA) there is a general trend toward a shrinking network of care in the community setting, causing payers and providers to explore various risk-taking scenarios. Bach states that “Risk taking is one of the core ideas that everyone is looking at in the context of health care reform, in general, as well as oncology.” Says Bach, “Most care right now is fee-for-service,” which he describes as a no-risk situation. However, several other payment models being explored by payers and providers such as bundled payments, care management fees, integrated delivery or ACO models, and capitation, will introduce various levels of risk for both parties.

But of all the payment model options Bach referenced, he favors the bundled payment model most. “I’ve been pushing for complete bundling, a complete move to episode payment, for some time now.” As the discretionary purchasers of drugs, Bach would like to allow healthcare providers decide what's best. “Let them manage the variation in costs of drugs and things like that.”

As strong a supporter as he is for bundled payments, Bach thinks the appetite for something like that is very small right now, and he thinks that stakeholders are probably looking mostly at shared savings models, similar to ACOs, as the next step in care management.

The general thrust in oncology is to achieve savings outside of the drugs; and “The statistics are clear,” he said, “there is a lot of money being spent on hospitalizations, imaging, and advanced testing.” And data show that the possibility exists that patient-centered medical homes can reduce hospitalizations by a meaningful amount, but “The rumor is that the benefit is starting to plateau.”

In the state of Maryland, for instance, he said Blue Cross year-over-year reductions in spending from the patients’ medical home in primary care seem to be continuing, “but we don’t know how long that will compound. It seems in oncology, at least the practices that have been doing this the longest, have found a new normal.” The practices can redesign care to achieve savings and reduce costs.

With all the consolidation going on and the mergers of community practices, larger provider networks are forming, which is placing them in a position to take on greater risk. “There are practices seeking to get to scale so that they can have balance sheets that are substantial enough, have denominators of patients large enough, that they can start taking on more and more risk.”

Bach thinks that the general trend is to move risk to the place where the discretionary decisions are made, “and it’s not a question of if, but when.” While the larger networks of providers are in a position to take on greater risk, many practices are not in that size range. They may be one of a few providers in an area, which allows them to extract much higher rates of reimbursement. “So, this consolidation cuts both ways,” Bach said. Addressing the site-of-care shift, due in large part to the collapsing margins of drug reimbursement, Bach said, “We used to say 80% of care was delivered in the community setting. It’s now more proper to say it’s probably about 60%.”

He noted regarding the decline in drug reimbursement contributing to the site-of-care shift, “We used to be AWP [average wholesale price] and then went to ASP [average sale price] +6%. Sequester is causing the reimbursement rate to drop to ASP +4.2%, and any efforts to get that addressed have largely failed.”

340B drug discounts are also contributing to the site-of-care shift. “Remember,” he said, “the 340B program only goes to hospitals, it’s not for in-patient drugs, it’s for outpatient drugs in the hospital. So only the hospitals can benefit from 340B through their outpatient department.”

This has caused a huge distortion in the marketplace, he said, as the discounts allow hospitals to pay about 40% less for the drugs than a practice pays for them. And, according to Bach, the 340B program “has been steadily expanded to the point where now we have an unbelievable number, I think about one-third of US hospitals, maybe more than that, are now 340B eligible.

“These discounts are making the hospitals completely different players from doctor offices.” The discounts aren’t included in ASP, so hospitals are responding in a logical way.

“They are interested in acquiring ways to administer drugs and make a profit, so they are affiliating with practices. They’re buying the shelves of practices and hiring the doctors, and they’re also hiring doctors and purchasing their practices.”

Although multiple reports suggest that cancer care costs more in hospitals than in doctors’ offices, Bach suggests that there are problems with these reports. And that is that the findings are not risk adjusted to reflect just how sick the hospital patient is. The Avalere Report from 2012 has “no risk adjustment, no stage, no nothing.”

“So if you want to ask where is the potential for savings—where do we want to start thinking about bundles&mdash;where are there entities that could save money by getting lump sums for all the drugs they use?” Bach answers his question by saying, “You go to the places where there are huge profit margins.” And, in his mind, that means hospitals. “Hospitals have balance sheets and they’re getting fantastic reimbursements. So they’re exactly the ones to target for [savings].”

“I happen to work in a hospital…these are serious players.”

Articles

Peter B. Bach, MD, MAPP, discussed at a conference recently hosted by The American Journal of Managed Care how new payment models are challenging the current fee-for-service model for community care cancer centers.

Peter B. Bach, MD, Discusses New Payment Reform Models

Electronic health information exchange (HIE) continues to grow, but only in certain areas of the country and only within certain health systems and practices, according to a forum recently held in Chicago by The Association of Community Cancer Centers (ACCC) Institute for the Future of Oncology. The Institute convened to explore key issues impacting community cancer centers with HIE systems and to gain perspective on how to help community cancer centers better meet the challenges facing the oncology community.

While ACCC stakeholders believe that HIEs have the potential to improve patient care, reduce duplication of services, lower costs, and improve quality of care, the oncology community is experiencing “uneven adoption” of HIEs across the country.

An HIE is a technology platform that allows for the electronic exchange of data in a secure manner, where patient information can be accessed when it is needed across organizational, vendor, and geographic boundaries. An HIE can include services such as physician web portals, patient health records, clinical messaging, and data exchange from electronic medical records or electronic health records, among others. However, the Institute reports that surprisingly, many within the oncology care community are unaware of the opportunities or services that HIEs offer.

ACCC experts report that practices implementing HIEs are benefitting from their use. For example, at the conference one provider who represents a large private practice with 6 locations and participates in an HIE service that serves the Midwest area said that they have a network that stores data, text, images, and voice dictation from provider sources. The sources include inpatient and outpatient lab results, radiology reports, discharge summaries, and any other hospital surgeries or emergency services provided to the patient. The information automatically feeds into the practice’s EMR. In turn, the practice distributes the information to the HIE, lab reports, radiology reports, and other pertinent patient information. In this respect, the HIE becomes an integration engine.

If the practice sends patients to a tertiary center, that center can upload directly from the practice’s EMR. “If one of our patients walks into the emergency department (ED), their system queries anything done in the last 90 days from a provider in the exchange,” the provider indicated. The system informs the ED what scans have been done, and which labs were done. This rich exchange of information results in the potential for elimination of duplicative tests, which reduce costs, which is in everybody’s favor.

Other benefits of HIE participation include information being made available to a practice as it is being transcribed at the hospital, lab, or imaging center; clinical information such as physician notes and treatment medication are included, as are notes concerning phone messages and alerts for medication refills. The HIE also helps to streamline processes and conduct internal benchmarking.

Benchmarking elements such as hospitalization rates of a practice’s patients receiving chemotherapy versus oncology medical home metrics can be achieved through an HIE. Every ED visit and hospitalization is captured and the reason for the visit is documented. As payment models shift to value-based from volume-based, benchmarking becomes an increasingly important tool in demonstrating cost-effective, quality care for oncology practices.

However, there is currently no single dominant HIE model in place: private institutions, such as hospitals, have developed their own HIEs, and some HIEs are developed for public use. In addition, the ACCC panel finds there is geographical variance in availability of HIEs, how they work, the services they provide, and their cost. HIEs are market driven, so providers need to identify HIE options available within their geographic region. According to a forum participant, Pam Matthews, RN, MBS, of the Healthcare Information and Management Systems Society, “What works in one state may not work in another.

“Quite a few pockets across the country do not have access to HIEs. Some states only have 1 viable HIE in the state. Others may have a statewide HIE with several regional HIEs.

Several states have HIE network-to-network availability where several HIE networks tie into a larger one. Some HIEs may offer a wide variety of exchange services; some may offer much less,” said Matthews. The goal, she said, is to freely exchange data across multiple organizations, regardless of politics or the market.

The challenge of privacy and security while exchanging health data across geographic areas was a primary concern of the attendees. Both patients and providers want their privacy protected, but they also want to be able to access their information seamlessly. Federal and state laws apply to the privacy and security of patient information, but HIEs are not covered entities under the Health Insurance Portability and Accountability Act (HIPAA). As HIEs are considered “business associates” of HIPAA-covered entities, they must enter into contracts or other agreements with the covered entities to safeguard the privacy of protected health information.

Public, state, and regional collaborative HIEs are currently active in all states, with vendor- specific or customer-to-customer availability. Costs are a variable that practices are faced with, as some HIEs require implementation fees and monthly maintenance fees. However, some oncologists or practices may not have to pay HIE development fees to join an HIE—as one cancer program executive in attendance explained, their local exchange was funded by 2 local hospital systems, a lab, and federal grant money to start up. “The only thing we pay for is if we do some hybrid programming.”

HIEs can offer value to the oncology community as they can easily transmit information across broad stakeholder groups and large geographic areas. As cancer patients receive treatment from a number of specialists at different locations and from a number of health care professionals, much of their information needs to be shared between specialists, nurses, social workers, primary care, and providers. HIEs potentially can streamline access to all this information, cutting down on costs and saving time for the patient.

Forum participants were in agreement that implementing comprehensive data-gathering systems could create opportunities to develop large databases of outcomes, provide comprehensive comparative effectiveness data, and improve upon quality of care; however, there was still the reality that while some community practices are benefitting from HIEs, many are not.

Details of the forum can be found in a white paper titled “Cancer Care in the Age of Electronic Health Information Exchange,” which can be accessed 

Electronic health information exchange (HIE) continues to grow, but only in certain areas of the country and only within certain health systems and practices

John McCleery

Articles

Peter B. Bach, MD, Discusses New Payment Reform Models

Health Information Exchanges: Some Community Practices Are Benefitting, Many Are Not