Next steps in oncology payment reform Quality health plans & benefits Healthier living Financial well-being Intelligent solutions Next steps in oncology payment reform Michael Kolodziej, M.D., FACP National Medical Director, Oncology Solutions Aetna

Aetna Values & Oncology Solutions Mission Statement Aetna Oncology Solutions – Mission Statement: We give our members access to high-value, personalized cancer care models. We collaborate with oncology teams that deliver best-in-class care by using evidence-based medical guidelines, clinical decision support tools and services that improve the patient’s experience, increase effectiveness of care and lower costs. Our value-based approach, powered by data analytics and transparency of policy and payment, allows us to move from a fee-for-service platform to a value-driven system that rewards Oncology practices for quality care throughout the patient’s care journey.  

Payers are horrified by the cost of cancer care and perceived low value

Responses to the huge and growing expense of cancer care? Pay less Manage more (prior auth) Narrow networks Shift responsibility to member (co-pay) Pay for performance (process measures) Shift risk (capitation) Impact has been small Aggravation has been large

Who are the players and why The practice perspective: size, sophistication, personality The payer perspective: size, sophistication, personality CMS has changed the playing field

You cannot improve a process that is not measured BREAST   ABC ONCOLOGY - BREAST 2012 2013 COMMERCIAL MEDICARE Grand Total - FOCUS BCL MEMBERS 542 6 548 93 FOCUS MBR CHEMO COSTS AT PRAC (TIME PERIOD) $12,336,674 $24,740 $12,811,033 $898,159 AVG PMPY $22,761 $4,123 $23,378 $9,658 ACTIVE CHEMO MBR MONTHS @ PRAC 2,707 18 2,658 407 ACTIVE CHEMO PMPM @ PRAC $4,557 $1,374 $4,820 $2,207 AVG ACTIVE CHEMO MONTHS SEEN** 5.0 3.0 4.9 4.4 IP FOCUS MBR AVG LOS AVG LOS 4.99 6.50 5.69 7.04 ER VISITS PER FOCUS MBR PY VISITS 1.60 1.00 1.49 FOCUS MBR YRLY MCC COSTS (SEE BELOW) $26,510,932 $94,050 $28,019,064 $2,325,577 AVG FOCUS MCC COST PMPY $48,913 $15,675 $51,130 $25,006 FOCUS MCC CATEGORY BREAKDOWN AMB FACILITY - UPMPY UPMPY $6,489 $690 $7,118 $1,555 EMERGENCY - UMPY $2,560 $0 $3,494 $624 IP FACILITY - UMPY $22,842 $169 $26,037 $20,476 LAB - UMPY $700 $972 $808 $389 MEDICAL RX - UPMPY $35,125 $9,735 $36,296 $18,349 RADIOLOGY - UPMPY $10,959 $7,900 $11,053 $4,926 SPEC PHYSICIAN $2,237 $1,198 $2,699 $2,042

Where are we now? Pathways (get over it) Pay for value

What is the role of the consumer?

What are the threats? Cost of innovation Consolidation of providers

Copyright © 2015 American Medical Association. All rights reserved. From: Five Years of Cancer Drug Approvals:  Innovation, Efficacy, and Costs JAMA Oncol. Published online April 02, 2015. doi:10.1001/jamaoncol.2015.0373 Copyright © 2015 American Medical Association. All rights reserved.

Where are we going? Episode based reimbursement

Cost of Care is Greatest During Periods of Active Treatment

There is tremendous consistency across disease states

Episode fee plasticity based on clinical performance Basic Episode Fee Reduced Episode Fee Enhanced Episode Fee Determinants of modifier: ER visits, Hospitalizations, Generic prescribing, Hospice Enrollment

The challenge is managing high-cost outliers

The Oncology Patient Centered Medical Home: Aetna Pilot Experience Proprietary & Confidential