Oncology Care Model Reduces Costs but Savings Are Modest

Roxanne Nelson, RN, BSN

June 01, 2020

Do oncologists in practices that have embraced the Oncology Care Model (OCM) make different care choice from those in practices that are not participating in this Medicare payment program?

Yes, it appears that they do.

At community practices that adopted the OCM, the first year of the program was associated with less physician-administered drug use in prostate cancer, lower drug costs in lung and prostate cancer, fewer visits for patients with breast or colon cancer, and lower office-based costs in all cancers analyzed.

However, these savings were largely offset by the costs of these programs

"We had a large oncology community based network and half were participating and half were not," commented lead author Brigham Walker, PhD, a research assistant professor at the Tulane School of Public Health and Tropical Medicine, New Orleans, Louisiana. "We were able to look at groups that were very similar to each other except for participation."

"It wasn't a randomized design so not as good as I would've liked it to be," he told Medscape Medical News. "The big limitation was that we didn't look at hospital or pharmacy data, so we don't know if the offsets are going on elsewhere."

There were cost reductions in all cancers, most notably in prostate cancer. "But it was offset by administration costs," he said, When these were taken into account, the difference was no longer statistically significant, he added.

The study was published online May 18 in JAMA Network Open.

Cutting Costs With a Caveat

The OCM, launched in July 2016 by the Centers for Medicare & Medicaid Services' (CMS) Center for Medicare and Medicaid Innovation, is a 5-year program that requires practices to reduce the cost of care while improving quality and patient outcomes. If participating practices are able to achieve OCM objectives and maintain quality while reducing the cost of care, CMS shares a portion of the savings. In addition, practices also receive a monthly incentive payment for every patient that is enrolled in the program.

There is already some evidence that the program may be cutting costs. As previously reported by Medscape Medical News, a large community practice that implemented an OCM saved Medicare $3 million over the course of 1 year.

But Walker and colleagues note that certain external factors may influence costs. For example, a 2018 study that simulated the benchmarks on Medicare data found that the type of tumor caused variation in the ratio of actual-to-predicted costs. (J Clin Oncol. 2018;36:102.)  Another study conducted the same year found that during the first year of OCM implementation, the use of high cost therapies influenced episode costs. (Blood. 2018;132(suppl 1):4802).

In their own study, Walker and colleagues examined oncologist behavior and looked at the difference between participating and nonparticipating practices, controlling for patient, clinician, and practice factors. They looked at 2 years of data, from July 1, 2015 to June 30, 2017, which included the time period of 1 year before and 1 year after launch of the OCM.

The analysis included practices affiliated with a large community oncologic practice network comprised of more than 1400 oncologists affiliated with 30 practices located in 17 states. Within this group, 14 practices are participating in the OCM and 16 practices are not.

The associations of participation with care use and cost were estimated for care that was directly managed by clinicians for Medicare recipients with breast, lung, colon, and prostate cancers.

There were less physician-administered drugs for prostate cancer in the OCM group, which extrapolated to a mean of $706 less in drug costs per month. Drug costs were also lower (by a mean of $558) for lung cancer.

Total costs were reduced by 9.7% or $233 for breast cancer, by 9.9% or $337 for lung cancer, 14.2% or $385 for colon cancer, and 29.2% or $610 for prostate cancer.

In addition, office visits were also reduced by 11.2% for patients with breast cancer and by 14.4% for those with colon cancer.

These amounts do not include the $160 Monthly Enhanced Oncology Services payout or any other performance-based payment payout for the savings achieved while participating in the program.

Walker noted that other studies have also found that participation during the first year of the program did not make a difference, but the difference becomes apparent over time. He is currently involved in a longer-term project looking at 3 years before and after implementation of the OCM.

"If the savings are modest, then there is another question for policymakers," Walker said. "What is the threshold for making this viable?" 

McKesson Corporation and US Oncology provided access to the data used in this study and provided the funding for publication fees for this article. Walker has disclosed receiving grants from Blue Cross Blue Shield of Louisiana for separate health insurance reform research outside the submitted work. Coauthor Jennifer Frytak reported owning stock in McKesson Specialty Health outside the submitted work. No other disclosures were reported.

JAMA Network Open. Published online May 18, 2020. Full text

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