At the Intersection of Health, Health Care and Policy Cite this article as: Alan R. Weil The Cost And Quality Of Cancer Care Health Affairs, 34, no.4 (2015):550 doi: 10.1377/hlthaff.2015.0260
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Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2015 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.
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from the editor-in-chief
DOI: 10.1377/hlthaff.2015.0260
The Cost And Quality Of Cancer Care by alan r. weil
P
resident Richard Nixon signed the National Cancer Act in 1971, launching what became known as the “War on Cancer.” Nixon requested $100 million—about what the National Cancer Institute now spends each week—to search for a cure. Cancer is the second leading cause of death among US adults, and cancer care now costs in excess of $125 billion each year in the United States alone. As Joanne Silberner reports in this issue, cancer has also become the second leading cause of death worldwide, making it an increasing priority in low- and middleincome countries. This month’s Health Affairs includes a collection of papers on the cost and quality of cancer care. the cost of care Why do cancer drugs cost so much? Scott Ramsey writes that payment and coverage policies are contributors, but the most significant factor is the current explosion in knowledge regarding cancer and possible treatments. The combination of uncertainty, treatments focused on small populations, and multiple competitors creates strong incentives for drug manufacturers to capture revenue quickly. Ramsey concludes that “cancer drug pricing decisions are driven by factors that have very little to do with the intrinsic value of the products themselves.” High prices affect all payers but are a particular burden for people without health insurance. Stacie Dusetzina and colleagues used the physician payment data that Medicare released in 2014 to examine charges, which serve as the starting point for what an uninsured patient will be billed. They found that uninsured patients could face bills for 550
health affairs
april 2015
chemotherapy in excess of forty times what Medicare pays and as much as five times what private insurers pay. While these amounts may be discounted or negotiated downward, they create a tremendous burden for those with the least ability to pay. the quality of care Aaron Feinstein and colleagues find improvement between 1994–96 and 2004–06 in survival rates for women diagnosed with breast cancer at stage II or III. Yet these and other stories of aggregate improvements in outcomes may mask important variations in quality. Two papers in this issue explore variations in cancer treatment from different perspectives. Using Medicare fee-for-service claims, Jeffrey Clough and colleagues report an almost $4,000 difference in spending per patient on chemotherapy drugs between oncology practices at the seventy-fifth and twenty-fifth percentiles as ranked by spending. The authors find significant evidence of unwarranted practice variation and argue that alternative payment models could reduce this variation. Ninez Ponce and colleagues explore a different kind of variation: disparities in the early adoption of gene expression profiling, which is an effective, but costly, innovation that can lead to more effective cancer treatment. Among an insured population, they found that “the highest-income patients in the most income-unequal places had the greatest adoption rate.” These insights into how innovation spreads are of particular relevance in an environment of emerging high-cost cancer treatments and growing income inequality.
the value equation Payers want to know if they are getting value for their money. Darius Lakdawalla and colleagues argue that care innovations should be valued by subtracting the health benefits they yield from the cost of care. They use three case studies—colorectal cancer and two treatments for multiple myeloma—to illustrate that health benefits can be greater than, equal to, or less than the cost of new treatments. Warren Stevens and colleagues explore the changing value of cancer care among the countries in the Organization for Economic Cooperation and Development (OECD). harnessing primary care Three papers in this issue document promising results of efforts designed to strengthen the role of primary care in the US health care system. Examining the Geisinger Health System’s patientcentered medical home program for Medicare enrollees (Daniel Maeng and colleagues), a chronic care management program for Medicaid enrollees in Washington State (Jingping Xing and colleagues), and Blue Cross Blue Shield of Michigan’s Physician Group Incentive Program (Christy Harris Lemak and colleagues), these analyses reveal that a variety of models can yield savings and improve quality. Not only do we have growing evidence of the effectiveness of primary care–based strategies, we also can learn from how these programs are constructed. Mary Takach and colleagues examined seventeen multipayer strategies to support medical homes. They provide four lessons for future multipayer payment reforms—lessons that the authors say will enable those leading such efforts “to better anticipate and navigate known obstacles and improve their chances for successful implementation.” acknowledgment Health Affairs thanks Precision Health Economics and the Celgene Corporation for their generous support of the papers on cancer. n
34:4
Downloaded from content.healthaffairs.org by Health Affairs on April 27, 2015 at NYU LANGONE MED CTR SCHOOL OF MEDICINE Apr_EIC.indd 638
3/19/15 10:21 AM
The online version of this article, along with updated information and services, is available at: http://content.healthaffairs.org/content/34/4/550.full.html
For Reprints, Links & Permissions: http://healthaffairs.org/1340_reprints.php E-mail Alerts : http://content.healthaffairs.org/subscriptions/etoc.dtl To Subscribe: http://content.healthaffairs.org/subscriptions/online.shtml
Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600, Bethesda, MD 20814-6133. Copyright © 2015 by Project HOPE - The People-to-People Health Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or mechanical, including photocopying or by information storage or retrieval systems, without prior written permission from the Publisher. All rights reserved.
Not for commercial use or unauthorized distribution Downloaded from content.healthaffairs.org by Health Affairs on April 27, 2015 at NYU LANGONE MED CTR SCHOOL OF MEDICINE
from the editor-in-chief
DOI: 10.1377/hlthaff.2015.0260
The Cost And Quality Of Cancer Care by alan r. weil
P
resident Richard Nixon signed the National Cancer Act in 1971, launching what became known as the “War on Cancer.” Nixon requested $100 million—about what the National Cancer Institute now spends each week—to search for a cure. Cancer is the second leading cause of death among US adults, and cancer care now costs in excess of $125 billion each year in the United States alone. As Joanne Silberner reports in this issue, cancer has also become the second leading cause of death worldwide, making it an increasing priority in low- and middleincome countries. This month’s Health Affairs includes a collection of papers on the cost and quality of cancer care. the cost of care Why do cancer drugs cost so much? Scott Ramsey writes that payment and coverage policies are contributors, but the most significant factor is the current explosion in knowledge regarding cancer and possible treatments. The combination of uncertainty, treatments focused on small populations, and multiple competitors creates strong incentives for drug manufacturers to capture revenue quickly. Ramsey concludes that “cancer drug pricing decisions are driven by factors that have very little to do with the intrinsic value of the products themselves.” High prices affect all payers but are a particular burden for people without health insurance. Stacie Dusetzina and colleagues used the physician payment data that Medicare released in 2014 to examine charges, which serve as the starting point for what an uninsured patient will be billed. They found that uninsured patients could face bills for 550
health affairs
april 2015
chemotherapy in excess of forty times what Medicare pays and as much as five times what private insurers pay. While these amounts may be discounted or negotiated downward, they create a tremendous burden for those with the least ability to pay. the quality of care Aaron Feinstein and colleagues find improvement between 1994–96 and 2004–06 in survival rates for women diagnosed with breast cancer at stage II or III. Yet these and other stories of aggregate improvements in outcomes may mask important variations in quality. Two papers in this issue explore variations in cancer treatment from different perspectives. Using Medicare fee-for-service claims, Jeffrey Clough and colleagues report an almost $4,000 difference in spending per patient on chemotherapy drugs between oncology practices at the seventy-fifth and twenty-fifth percentiles as ranked by spending. The authors find significant evidence of unwarranted practice variation and argue that alternative payment models could reduce this variation. Ninez Ponce and colleagues explore a different kind of variation: disparities in the early adoption of gene expression profiling, which is an effective, but costly, innovation that can lead to more effective cancer treatment. Among an insured population, they found that “the highest-income patients in the most income-unequal places had the greatest adoption rate.” These insights into how innovation spreads are of particular relevance in an environment of emerging high-cost cancer treatments and growing income inequality.
the value equation Payers want to know if they are getting value for their money. Darius Lakdawalla and colleagues argue that care innovations should be valued by subtracting the health benefits they yield from the cost of care. They use three case studies—colorectal cancer and two treatments for multiple myeloma—to illustrate that health benefits can be greater than, equal to, or less than the cost of new treatments. Warren Stevens and colleagues explore the changing value of cancer care among the countries in the Organization for Economic Cooperation and Development (OECD). harnessing primary care Three papers in this issue document promising results of efforts designed to strengthen the role of primary care in the US health care system. Examining the Geisinger Health System’s patientcentered medical home program for Medicare enrollees (Daniel Maeng and colleagues), a chronic care management program for Medicaid enrollees in Washington State (Jingping Xing and colleagues), and Blue Cross Blue Shield of Michigan’s Physician Group Incentive Program (Christy Harris Lemak and colleagues), these analyses reveal that a variety of models can yield savings and improve quality. Not only do we have growing evidence of the effectiveness of primary care–based strategies, we also can learn from how these programs are constructed. Mary Takach and colleagues examined seventeen multipayer strategies to support medical homes. They provide four lessons for future multipayer payment reforms—lessons that the authors say will enable those leading such efforts “to better anticipate and navigate known obstacles and improve their chances for successful implementation.” acknowledgment Health Affairs thanks Precision Health Economics and the Celgene Corporation for their generous support of the papers on cancer. n
34:4
Downloaded from content.healthaffairs.org by Health Affairs on April 27, 2015 at NYU LANGONE MED CTR SCHOOL OF MEDICINE Apr_EIC.indd 638
3/19/15 10:21 AM
