Managed Care: To Live and Die in LA

January 1, 1996
Stephen Lemkin, MD
Stephen Lemkin, MD

Volume 5, Issue 1

In Los Angeles, the future seems to arrive a little sooner than in the rest of the country. The defense-based economy has crashed and burned, shifting hundreds of thousands of employees into managed care plans, mostly HMOs.

In Los Angeles, the future seems to arrive a little sooner thanin the rest of the country. The defense-based economy has crashedand burned, shifting hundreds of thousands of employees into managedcare plans, mostly HMOs.

Nervously clutching our ASCO abstracts in our axillae, medicaloncologists here are knee deep in the results. By the painfulbut simple mechanism of full risk capitation contracts, the managedcare industry has reversed two decades of medical oncology practicehistory--they think for the better, but we're not so sure. Howdid this come about?

Arguably, medical oncology did not exist until the early 1970s(the first Boards were in 1973) when the combination chemotherapytheories of Cooper, DeVita, and, later, Einhorn required sophisticatedmanagement of drug protocols and their side effects. Prior tothat time, internists and surgeons were comfortable handling singleagents, and oncology was really a surgical subspecialty.

As it grew in the 1970s and 1980s (the "money is no object"era in medicine), medical oncology evolved a practice paradigmof benevolent excess. We used vast permutations of combinationchemotherapy, both empirically and systematically, in hopes oferadicating, or at least palliating, the sufferings of commoncancers.

The limited success of most of these programs has not, in general,caused a reassessment of purpose but, contrarily, has acceleratedultra-high-dose therapies, requiring the development of disturbinglyexpensive modalities and drugs to counter the ever-worsening symptomsof vomiting, myelosuppression, and infection.

As long as fee-for-service held out on the private practice side,and government research grants on the academic side, all was well.However, those who viewed the situation from both a cost and anoutcome perspective questioned whether the confusing variabilityin management of specific disease sites, and the lack of persuasiveevidence that one treatment was really better than another, meanta bit of self-indulgent chaos.

Industry cannot and will not pay any longer, so it invented "managedcare." While traditional medical oncology was based on aphysician-patient compact for as much treatment as wanted by both,for as long as either could tolerate it, managed care now meansas little treatment as possible, for as small a price as possible.

'Price Wars'

In Los Angeles and elsewhere, oncolo-gists compete for contractsthat make them financially responsible ("at risk") forprofessional services, ancillaries, and chemotherapy. This removesthe insurance plan from utilization decisions and dramaticallylowers costs.

Since ASCO itself notes that only one or two medical oncologistsare needed per 100,000 population, and since there are more thanthat in most urban areas, a price war has ensued, or will commenceshortly--what we call the "PMPM Wars" (capitation contractsare based on a "per member per month" value). As thewars progress, physician incomes fall.

So far, managed care has been driven by cost, not quality. Thisis understandable, with recent economic pressures for immediateresults. (California health-care costs are now decelerating forthe first time in decades. This may explain why the Clinton Planwas ultimately unnecessary, never mind undesirable.)

Now that we know that managed care "works," how canwe make it more effective in achieving its original goal, ie,providing effective medical care at a price people are willingto pay, not simply cheap medical care?

Four Goals for Medical Oncology

After several years experience with capitation, we feel that,to survive, our specialty must redefine itself and what it doesbest.

Medical oncologists must develop systems for overall cancermanagement. In most medical delivery systems, oncology consumesabout 10% of overall costs. Besides chemotherapy, these areasinclude hospital utilization, radiology and laboratory procedures,surgical and gynecological oncology, radiation therapy, home careand hospice, and cancer prevention and screening programs.

Medical oncologists are in the best position to act as gatekeepersfor these services, since out-of-control cost in any one of theseareas forces quality compromise in all the rest.

Medical oncology must commit itself to serious consensus management.For those areas where there is general agreement as to the besttreatment (eg, Hodg-kin's disease, adjuvant therapy for colonand breast cancer), practice guidelines that take cost into considerationmust be developed.

For those situations where there is little general agreement (stageIII lung cancer, high-dose chemotherapy/bone marrow transplant,refractory solid tumors in general), a realistic appraisal oftreatment benefits must recognize resource limits.

Family and patient-support professionals must be part of the teamearly, to avoid an overdependence on technologic treatments.

Investigational therapies must be available, but relationshipsbetween academic centers and community oncologists must not becompetitive. For example, the costs of treating stage IV breastcancer with high-dose modalities, if not controlled, will notonly break the bank but will seriously pit academic and practicingoncologists against each other in the "PMPM Wars."

Many investigational protocols remain overwrought--often impracticalfor managed care patients to participate in unless the trial isheavily subsidized. Ponderous regulations make it ridiculouslyexpensive to bring new drugs to market, and such drugs are oftenexpensive to use once they become available. Oncologists mustdevelop practice and managed care-oriented investigational studiesthat husband resources.

For example, a bone marrow transplant patient need not travelto a "center of excellence" to be hospitalized for amonth when stem cells can be harvested locally, the first septicepisode managed with home therapy, etc. Protocols in which localoncologists and the tertiary institutions share risk, each doingwhat each does best, may be the key to enhancing quality overprice alone.

Oncologists are forming, and must form, new types of practicegroups to share and manage risks. The paradigm emerging requiressophisticated information systems to access and monitor qualityof patient care, consensus clinical guidelines to minimize needlesspractice variation, and strategies to market cancer managementsystems to potential payers.

Formation of groups provides on-cologists with the critical massof managed care lives required for actuarial analysis of the riskand cost of treatment.

Does all of this mean the death of the medical oncology subspecialist?In Los Angeles, probably yes. And could it lead to the birth ofthe primary oncology practitioner? Hopefully so!

By Cary Presant, MD

Series Editor

In this month's column, Dr. Lemkin, one of this country's mostexperienced oncologists with capitated contracting, accuratelyarticulates four goals of the new age of medical oncology.

Perceptive oncologists will immediately recognize the value ofefficient networks of practices in competing more effectivelyfor contracts, evaluating and comparing outcomes, establishingworkable practice guidelines, and creating security for small-groupspecialists. Regional and national networks are colonizing ourmedical care landscape, offering both opportunities and threats.

The bidding price wars that have been often seen in Southern Californiahave, in some cases, had deleterious effects, making it more difficultfor oncologists to maintain high quality, perform clinical investigations,and continue to obtain professional satisfaction from oncologypractice, both in community and academic situations.

Indeed, not only have the LA Raiders and LA Rams left Los Angelesbut many LA oncologists, fellows, and Community Clinical OncologyPrograms (CCOPs) have also departed the area. The experiencesof Southern California should be studied by others around thecountry as managed care grows in their regions.