John L. Marshall, MD; Andrew L. Pecora, MD; Lowell E. Schnipper, MD

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July 13, 2015

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John L. Marshall, MD: Hello. I am John Marshall, professor of medicine and chief of the division of hematology/oncology at the Lombardi Comprehensive Cancer Center at Georgetown University in Washington, DC.

I want to welcome you to this edition of Medscape Oncology Insights, coming to you live from the 2015 annual meeting at the American Society of Clinical Oncology (ASCO), where all oncologists migrate at the end of May. We fly to the north for the spring. We were, unfortunately, not given springtime weather. It's miserable outside. A windy nor'easter is blowing past, so we are glad just to be sitting in here.

I'm joined today by two fabulous experts to talk about possibly the hottest two topics in cancer medicine today: value and outcomes. Everybody is talking about them. These have been themes driven throughout the meeting this year.

We could not have better guests to join us to discuss this. Let me first introduce Dr Lowell Schnipper, who is professor of medicine at Harvard Medical School in Boston, Massachusetts, and chair of ASCO's Value of Cancer Care Task Force. Lowell, thanks for joining us today.

Lowell E. Schnipper, MD: My pleasure.

Dr Marshall: Next to me is Dr Andrew Pecora. Our institutions are working together. He is the chief innovations officer—a guy who's done a lot of innovating—professor, and vice president of cancer services at the John Theurer Cancer Center at Hackensack University Medical Center in New Jersey. Andrew, thanks for joining us.

Andrew L. Pecora, MD: Thank you.

Defining Value in the Face of Rising Costs

Dr Marshall: We're going to start with what I think is the harder of the two topics: value. We've been thinking about this for a while. Lowell, it was when bevacizumab was first approved for colon cancer[1] back in, I think, 2005 that we had to defend the price of an expensive drug. I remember the folks from Genentech getting up and saying that this was innovative, and their first-in-class antiangiogenic drug was worth a lot of money.

Today, bevacizumab [at its 2005 price would be considered] a bargain relative to what we have now. How did we get here? How did we get to this process where our medicines are so expensive? Cancer care in general has gotten very expensive.

Dr Schnipper: If you look at the trajectory of the cost of drugs 25 or 30 years ago vs now, the curve has sharply risen in the past 12 years. But I think a lot of ASCO's concerns and focus comes from the concern throughout the country about the rising cost of healthcare. In essence, it's unaffordable if we keep doing what we're doing.

Cancer is not the largest chunk of the US healthcare budget. It really isn't. It's about 5% or 6%, not much more. On the other hand, it is one of the more rapidly growing areas in the healthcare budget.

Dr Marshall: As more people live longer, we probably are going to spend more on cancer care.

Dr Schnipper: The demographics of the disease suggest that it's going to be an enormous problem in the future.

Dr Marshall: But it certainly feels like a big problem now. We have a lot of big-ticket items.

Dr Schnipper: When you look at costs compared with cardiovascular disease, diabetes, and other diseases, cancer drugs are infinitely more costly.

Dr Marshall: Why do you think they're more expensive? What's your take on how they can keep asking more and more for drugs?

Dr Schnipper: When it comes down to it, pharmaceutical companies have put a lot of skin in the game, invested an awful lot of resources. They have learned that selling these cancer drugs isn't selling something to a free and open market. They're selling them to a very, very complicated set of individuals: the patients who benefit from them, we hope. But the doctors are the patients' agents and yet, the doctors are prescribing something that the patients pay for indirectly in the form of insurance premiums.

We say "third-party payer" as though it's really someone else. Not so...they're getting their money from all of our salary checks.

Dr Marshall: This third-party payer that some people think of as a kindly grandfather who funds what we need. But the reality is, that bucket, that bank got filled up out of our own wallets through taxes and out of our paycheck, right?

Dr Schnipper: Not only that. We say "third-party payer" as though it's really someone else. Not so. "Third-party payer" means, actually, that they're getting their money from all of our salary checks and from the companies we work with. In essence, fewer dollars from our wages come to our pockets. More of it goes to this purpose. That is part of the problem.

Oncologists Benefit From Giving High-Cost Drugs

Dr Marshall: We pick on the pharmaceutical companies a lot, but I know—as an oncologist in a business—that we're part of the issue, too. We benefit by consuming these products. In the United States, we're incentivized to give these medicines.

Dr Schnipper: You're right on target, John. It turns out that we've now come to realize, and I think ASCO representing America's oncologists is convinced, that we need a different way of compensating for the care of cancer patients.

Dr Marshall: I had this guy come up to me after a meeting and he said, "It's the companies. How can they ask so much for this?" I looked at him square in the eye, and I said, "Well, how much money do you make?" It was a big number, and I said, "Are you willing to drop that by a couple of hundred thousand dollars for a different deal on drugs?" And he said, "Whoa, no." We all have to be in on this together.

Dr Schnipper: We're all pretty much aligned with the idea that we need to change the incentives. The incentives need to give people the best care that's available to anybody on the planet—but do it in a coordinated way that doesn't reward for prescribing drugs and doesn't reward for doing unnecessary testing, and rather puts the patient at the center and essentially involves decision-making that represents the best way to achieve health, or to recover health.

Dr Marshall: Andrew, I want to ask you a question. You're a boots-on-the-ground kind of guy. You've built a fabulous network of oncologists throughout the region. Obviously, the business model of oncology has probably changed a lot since you started. Reflect a bit, as you watch this value discussion, on how value has influenced you in building this network.

Dr Pecora: I've learned a lot over the past 4 years. I represent over 120 oncologists. We take care of about 30,000 new cancer diagnoses a year, and we have novel contracts with many of the payers for which we are starting bundled payments, episodes of care, oncology care models (OCMs), and medical homes. Everybody's attacking the problem a bit differently.

I take exception to some of the things that were said. The drug part is only 25% of the total spent. So 75% of the spending is someplace else.

The other thing is that when we look at cost, we, as oncologists, look at unit costs—what our piece costs. But payers don't do that. Payers look at total cost. As an example, if you have a new medication that costs a lot of money but prevents hospitalizations, prevents going to the emergency department, prevents expenses downstream and returns someone to society—that's being looked at.

Payers look at total cost...a new medication that costs a lot of money but prevents hospitalizations, prevents going to the emergency department—that's being looked at.

What I've seen is a transition from the 1-year look at cost by payers to a 2- to 3-year timeline for the private payers, and for the Centers for Medicare & Medicaid Services (CMS), a 5-year timeline. The total cost of care is going to be the denominator of value, not the unit cost of care, the cost of the drug, or the cost of the doctor or the hospital.

Dr Schnipper: But the point is that the care is too costly—whether it's hospitals, whether it's doctors, or whether it's drugs. The care costs too much money, and lots of it has to do with an enormous amount of waste in the system. I think ASCO's Choosing Wisely campaign, which we ran for 2 years, pointed out in a few areas that there are lots of things that we do almost reflexively and intuitively, thinking they're sensible—but we wind up proving, by the data that we can generate, that some of these are not generating any clinical benefit.

Business of Medicine Not Very Businesslike

Dr Marshall: We had the auto industry crisis. We had the economic crisis. It feels like the healthcare bubble is pretty tight. I've gone around the country a lot over the past several years—small cities, big cities—and realize that during this economic downturn, it's been our healthcare institutions that in many ways have maintained the economies of these small towns. I could even argue that the city of Cleveland, Ohio, would have been in a lot worse shape had it not been for the fabulous healthcare that's provided in that city.

We've been sustaining. If you talk about government bailouts, on some level the healthcare industry has been bailed out or continues to be bailed out, and I just wonder, is the situation urgent now? Is this the same way you guys are thinking of it?

Dr Pecora: I want to agree. I do think healthcare, and particularly cancer care, costs too much. But it doesn't cost too much for everybody. It costs too much for some of the patients we care for.

The question is, how do we better define who should get what? I've talked a lot about the "Goldilocks formula": not too much, not too little, just right all the time. I've been part of an initiative with Zeke Emanuel of the Center for American Progress, where we put together the precursory information that CMS is now using for their OCM model, which is a first step toward some form of healthcare reform payment.

Michael Porter was here at ASCO [to deliver the keynote address],[2] and he talked about the idea that we should not reward people for compliance with pathways. We should reward people for outcomes.

Dr Marshall: Tell people who Michael Porter is.

Dr Pecora: Michael Porter is probably one of the most famous healthcare economists in the country. He's very big on processes of business, and he feels there is no process of business in healthcare that makes any sense. Instead of providing services, we have to move toward delivering product. You're a colon cancer expert. You could sit down and decide for stage 3 colon cancer, "Okay, what do I really need and what don't I need?" What has to be in the product, and what's nonsense?

If you were building an iPad®, you wouldn't add extra stuff that would add money to your cost and require you to sell it at a higher price. But in healthcare, as you were saying, we have an incentive to do that. That incentive needs to be removed, but you have to be able to deliver quality care with reduced variance at scale, and that's something we've been working on.

Dr Schnipper: We had a session earlier today [on value in cancer care] in which there were several speakers.[3] One was representing a large insurance company that had bought into the idea of pathways. If there are four or five "high-value" pathways—high-value because they're as good as any for treating disease X, Y, or Z, and they are moderate in cost as opposed to being astronomical in cost for the same efficacy—those physicians who use on-pathway regimens are getting, essentially, some allocation of dollars per month that can be used for sustaining their practices, hiring a social worker, or improving the quality of the care in their environment.

There is no process of business in healthcare that makes any sense.

Dr Marshall: Is this urgency to do this (ie, undertake reform) coming from the outside, or do you think this is coming from the inside? We were on 60 Minutes—it's never good to be on 60 Minutes—about the cost of cancer care. Leonard Saltz—who was featured on 60 Minutes because of the New York Times article that he wrote with Peter Bach and Robert Wittes[4]—in an unprecedented move, just an hour or two ago, was given 20 minutes of plenary session time to discuss this. Lowell, you were good enough to go to that. I mean, giving that kind of exposure is for ASCO a big deal.

Dr Schnipper: Len's focus in this talk was purely on the drugs and the enormous cost. He posited some amazing things. And it's true. Judging by how much it costs to buy nivolumab and ipilimumab, if a patient gets the combination as described and enjoys good survival, that patient is probably going to be consuming $295,000 a year in cost.

Dr Marshall: These are our best drugs, not the 1.4-month improvement in survival. These are the "near-home runs"—or a good triple, at least.

Dr Schnipper: This is a meaningful benefit that you do not want to deprive anybody of.

Dr Marshall: Some could argue that that's worth more. A cardiac bypass works, and it's an expensive thing to get.

Putting a Price on Human Life?

Dr Marshall: We could go on a while, but I want to ask you a couple of social questions. As a global group, ASCO, we clearly have differences. You mentioned earlier, Andrew, that the haves can have more than the have-nots. There is an imbalance of healthcare access, not only in the United States but around the world. The statistic is something like only 1 out of 7 people on our planet has any access to cancer care. How are we going to decide, as we become more globalized, what the value of a life is? Anybody want to take that on?

Dr Pecora: Not only take it on, I'm helping to advise a couple companies on that, and it's amazing how that is decided. You look at Great Britain's National Institute for Health and Care Excellence (NICE), and you look at what we do. In Great Britain, it's $50,000. Here, it's $150,000. Why is it different? Why is a human life worth more here than it is in Great Britain, for example?

Why is a human life worth more here than it is in Great Britain, for example?

Dr Marshall: I ran a symposium where we were comparing guidelines in different parts of the world and that figure came up. Some good questioner came up to the microphone and said, "Okay, so that's what a British life is worth. What should the bar be in the United States?" And $150,000-$200,000 is where it is now, mainly because we haven't had the nerve to set the bar, I think.

Dr Schnipper: Exactly. When you work out of a single budget for an entire healthcare system, you have to make difficult choices. Americans have been fortunate...

Dr Marshall: ...to borrow from the Chinese to pay our healthcare bill.

Dr Schnipper: Indeed. The payer is basically saying to us, "Okay, payday is coming pretty soon."

Dr Marshall: Do we feel this is from external pressure? Or is this really keeping track of our own shop?

If we don't take this seriously, we're going to have to ration care in the United States.

Dr Pecora: It's both. I'm an immunologist. I'm a bone marrow transplant doctor. Why would I even be here talking to you about this? Because I realize that if we don't take this seriously, we're going to have to ration care in the United States. There's no way around it, in my opinion. We need to embrace the complexity of cancer to find the value, to pull out the things that are unnecessary. Twenty years ago, it didn't matter because we didn't have a lot of treatments that worked and they weren't that expensive. People didn't live that long. Now it completely matters.

Dr Marshall: How are we going to tell this to patients, Lowell?

Dr Schnipper: Good question.

Dr Marshall: Let's talk about getting this message out to patients who are used to pretty much any access they want.

Give Patients the Dollars and Sense of Care?

Dr Schnipper: You hear a lot of conflicting things about what patients want. There are surveys and studies. Patients say they really do want to hear about the cost of their care, and they're really sensitive to the price differences for small benefits. On the other hand, when patients are told they have cancer and here's what we might be able to offer for you, they're in shellshock. They're not ready to talk about a bank account. They're ready to say, "I'll do anything. I'll go into debt. Just save my life." So it's got to be a process. That's number one.

Number two, I think what ASCO is hoping to do is to figure out a way to not look at drug prices per se, but at how well regimen X or drug Y works for the intended purpose. When it works really well, that probably does have a value of, let's say, I don't know, a Ferrari or a BMW. When it works less well, I think we should only pay for a Honda. Not that a Honda's a bad car, but you get the idea.

Dr Marshall: I get you, I do. Yesterday, I quoted a study that was presented at ASCO in 2011 that I found fascinating.[5] It was on antiemetic use by patients. They were given a choice. Choice A was an antiemetic regimen that was relatively inexpensive and worked most of the time, but not all the time. If you chose that, they'd give you $200 for every cycle, so you got cash to take the cheaper antiemetics. In choice B, you could have the full, high-end antiemetics.

Most patients—these were chemotherapy patients—opted to get the cash. They were willing to risk having nausea. I was thinking, "Okay, what's the extension of this?" Let's say bevacizumab in colon cancer adds a few months of survival. Why aren't the payers involved in this game? Maybe it's too sticky, but if my insurance company wrote me and said, "I'm sorry you got colon cancer. You can have all the bevacizumab you want. But if you don't take it, I'll give you some payback on your healthcare," why aren't the payers embracing some of this?

Dr Pecora: The biggest fear payers have is to show any incentive—either financial or otherwise—that would lead to less care. This is because of political reasons; because of departments of insurance in various states; and because payers have been so beaten up over the past decade, they are afraid to do it. I'm talking about not just one payer, but even national payers.

The biggest fear payers have is to show any incentive—either financial or otherwise—that would lead to less care.

We spent a lot of time to help build an informatics system that allows assessment of all of the biologic and relevant prognostic details up front so that you're comparing apples with apples.

Then, when we contracted with the payers, we gave people access to National Comprehensive Cancer Network (NCCN) guidelines and we said, in the first year, you can do anything you want, as long as it's an NCCN or ASCO guideline. By the end of 1 year, we're going to look at total cost of care, instances of severity of toxicity, and clinical outcomes—in this case, progression-free survival (PFS). If you have two or three regimens and two of them are more expensive and more toxic, and you have the same PFS, we're dropping those regimens from our formulary.

The doctors agreed to do it, because we are accounting up front for the biological variance. The only thing that could differ is behavioral variance. That approach seems to be working, and the insurance companies seem positively disposed to that.

Outcomes and Bundles and Medical Homes, Oh My!

Dr Marshall: We talk about outcomes and bundles. That makes every oncologist—maybe every doctor—in America nervous. Break that down a little bit on how that kind of medicine shifts how doctors get paid, and how practices are supported.

Dr Pecora: In general terms, in the marketplace, there's a number of experiments ongoing. The OCM's medical home model is, you get paid extra per patient.

Dr Marshall: You're employed and salaried, and you get paid extra? It's a fixed sum of money, and that money is so you can add staff to your office so that you triage better to avoid patients going to the emergency department, and you have fewer hospitalizations. Some of them add into it utilization of diagnostic testing and imaging. Let's call that step one. That's what CMS is coming out with next year, and everyone who is interested is applying for it.

Dr Marshall: And ASCO is supporting this sort of bundled payment process by diagnosis.

Dr Pecora: That's not a bundle. That's a medical home.

Dr Marshall: A medical home, right.

Dr Pecora: The next phase is shared savings. In shared savings, you do that first step, but they account for the last 2 years of what you spent. If you spent less, then they'll give you a piece of that savings. They don't care what you do with that. Do whatever you want, just spend less—but it has to be tagged to an outcome, because they're going to be held accountable to the outcomes.

Dr Marshall: How's that measured?

Dr Pecora: When the therapy intent is curative, it's "delivered dose intensity," because that's the most immediate measurable surrogate, so you have to follow an NCCN or similar guideline and you have to demonstrate, in real terms, that you gave the drugs on time, on dose. In the palliative setting, it's still wide open. Nobody knows how to measure value in a palliative setting.

The final phase is true bundles, and bundles start with no downside risk. You get one check for 1 year's worth of care that covers everything. That covers the hospitalizations, the surgeries, the radiation—one check, everything. Then, there's a shared savings at the end of that. Where CMS and the payers want to go in 3-5 years is downside risk. You go to the next step. The next step is that you are assuming that if you spend more than they gave you, there's no backstop. You're going to pay the money.

Dr Schnipper: This is imbedded in the concept of the accountable care organization (ACO). You basically have people being cared for under a risk arrangement, and if you care for them well with good outcomes—whatever it be, A1c or other endpoints like that—and you spend less doing that, you can keep some chunk or a big fraction of all of it.

ASCO's Value Framework: Open for Public Comment

Dr Marshall: Lowell, give us a summary of ASCO's initiatives and focus around value.

Dr Schnipper: We started tackling costs by thinking, "Let's spend less money on cancer care," and that led us to sort of eliminating waste as one important arena, by no means the only one; you commented about hospital costs, doctor take-home salaries, that kind of thing. That's a big part of it, but at the moment, we're not ready to tackle that. But we clearly moved over to thinking about value—influenced, to some extent, by Porter's writing and his work. It made good sense, because it is a composite of many of the elements we think about as being essential to patient care.

What we oncologists do, of course, is deliver drugs. We try to do it safely. We help people through toxicity, and we want the best outcomes for them. ASCO's other passion is making good cancer treatment available in an equitable and uniform way. That is by no means even happening here in the United States, let alone elsewhere around the world.

So we came to the notion that if we could contribute to the debate by starting to define value, ASCO will publish a plan[6] at the end of June and offer a period for public commentary (until August 21) to let people trash it, like it, suggest different things.

We'll hopefully digest what we learn and come out with something that perhaps is our own statement, but if others can agree, we may begin to get closer to a uniform understanding of value.

Dr Marshall: I was really pleased to be invited to a closed-door meeting this morning here at ASCO where industry, payer, oncology, and economics people were all charged with the questions: "Okay, what's value, and how should we pay for it?" With the hope, I think, of feeding this paper that you're referring to.

 
ASCO will offer a period for public commentary. Let people trash it, like it, suggest different things.
 

Dr Schnipper: The European Society for Medical Oncology (ESMO) has been doing, in parallel, the very same thing as ASCO. They're not touching cost at all because the countries in Europe are so diverse as to how their healthcare systems work. They're just saying, "Here's how good or bad certain drugs are. You think about whether you want to bring it onto the formulary." But their assessment of value, of treatment, and ours—if we can bring them together and begin to factor in NCCN and other guidelines, I think that could be a very powerful argument for making a uniform understanding of value in cancer care.

Dr Marshall: Policy. Set that bar in some way.

Dr Schnipper: Yes. That could lead to not only good patient outcomes but also a sensible policy position in terms of financing cancer care.

Dr Marshall: I like it. That's value. What should docs expect over the next few years about outcomes and how that's going to influence their practice?

Dr Pecora: Doctors have to get very comfortable with the need to measure outcomes. They're going to be held accountable to outcomes. The outcomes are not going to be just the quality measures, such as the Quality Oncology Practice Initiative (QOPI®). They'll be hard outcomes. I think that's going to happen.

Dr Marshall: I do, too. Some are looking forward to it. Some are quaking in their shoes. But we'll survive. We've got to provide our patients with the best care.

Dr Schnipper: What Andrew just said—which is right on target—is happening. It runs completely counter to the kinds of people we select for medical school. We want creative, energetic, independent-thinking people. That's how they're selected. Now, they're being told to walk into a corporate box and behave well.

Dr Marshall: And behave well. It's going to be interesting to see.

Dr Schnipper: It's a cultural change.

Dr Marshall: Maybe the riot will come from deep in the hospital.

Dr Schnipper: You got it.

Dr Marshall: Andrew, Lowell, thank you so much. This was a fabulous discussion. I know the gang out there is going to really appreciate listening in and hearing this, and planning as they go forward.

I want to thank you all out there for joining us in this edition of Medscape Oncology Insights. This is John Marshall, reporting from ASCO 2015.

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