Managed Care: The View From Salick Managed Care

February 1, 1996
William Lew Quan, PharmD
William Lew Quan, PharmD

,
William Audeh, MD
William Audeh, MD

Volume 23, Issue 5

In the past few years, this country has seen a major change in the financing of health care. According to a recent survey by Foster Higgins, an international employee-benefits consulting agency, at the end of 1994, 63% of all privately insured Americans were enrolled in a managed care plan.

In the past few years, this country has seen a major change inthe financing of health care. According to a recent survey byFoster Higgins, an international employee-benefits consultingagency, at the end of 1994, 63% of all privately insured Americanswere enrolled in a managed care plan.

Managed care plans are usually described as those that providehealth-care services through health maintenance organizations(HMO), preferred provider networks (PPN), or point-of-service(POS) plans.

The Marion Merrell Dow Managed Care Digest states that as of June,1994, pure HMO penetration had risen to 20.3% of the total populationof the United States, representing a total HMO enrollment of 52.4million members.

Clearly, the halcyon days of fee-for-service medicine are goneforever. Most of these changes have been driven by employers'demands for cost reduction by health-care providers. Within oncology,the indiscriminate use of laboratory tests, superfluous diagnosticprocesses, and expensive chemotherapeutic regimens with no documentedbenefits has resulted in increasing payer scrutiny of physicianpractices.

This cost-reducing effort has been spearheaded by managed careorganizations that encourage physicians to provide only servicesdeemed appropriate, ie, those providing a benefit that outweighsany harm.

This article describes our approach to meeting some of the economicchallenges encountered in this new health-care environment. Itis our belief that every therapeutic decision that an oncologistmakes has an associated economic impact on our health-care system,since resources used for inappropriate therapies may not be availablefor appropriate ones.

One of the most important tools to aid physician decision habits,and essential to justify the treatment decision, is the use offormal guidelines in high-cost therapies.

Salick Health Care, Inc. and SalickNet have developed guidelinesfor use within our cancer centers and managed care company throughoutthe country.

These guidelines are intended to establish the best practice standardsachievable, either from a meta-analysis of the most recent literatureor by the Rand Delphi method. (The Delphi is a social sciencetechnique used to obtain priority opinions of experts by a seriesof notes or ratings.) All of our guidelines are periodically updatedwith the most current literature on a pre-established time table.

To avoid a conflict of interest, our guidelines are always reviewedby an expert panel of scientists and clinicians outside our company.

Our organization has developed and placed into operation guidelinesfor high-cost therapeutic modalities such as bone marrow transplantationand peripheral stem-cell transplantation in breast cancer, lymphoma,myeloma, and leukemia.

20 Drugs, 80% of Budget

Our cancer medication practice guidelines have focused on the20 or so drugs that constitute approximately 80% of our cancer-relateddrug budget. Some agents for which a guideline was developed andimplemented, or is planned, are the colony-stimulating factors[ie, filgrastim (Neupogen), epoetin alfa (Epogen, Procrit)], ondansetron(Zofran), and granisetron (Kytril).

Our medication guidelines take into consideration the total treatmentlandscape involved with drug selection, storage, preparation andhandling, administration, personnel involvement, clinical outcomes,adverse reactions, and patient satisfaction.

It is very important to keep in mind that, often, the cost ofnursing personnel, ancillary supplies, venous access devices,and non-cancer-related drugs used to treat side effects can addsignificant expense to an overall treatment plan.

Cost-Benefit Analyses

Another method that managed care organizations often use to evaluatethe types of services that they will provide is the "cost-benefit"analysis. What does the service produce in terms of clinical benefit(eg, years of life)?

Treatments can also be evaluated by this method. For example,a beneficial treatment decision in oncology is to provide treatmentof metastatic testicular carcinoma with potential cure. Threecourses of treatment with a regimen of cisplatin (Platinol), etoposide(VePesid), and bleomycin (Blenoxane) cost around $12,000.

If one treats a 30-year-old man with a life expectancy of another45 years, curing him will lead to 45 extra years of life at acost of $12,000 or $267 per year of life saved. Even with a curerate of only 90%, the price rises only to about $300 per yearof life saved. One benchmark for comparison is chronic renal dialysis,which costs around $40,000 per year of life saved.

A 'Cost Ineffective' Treatment

An example of a treatment we consider cost ineffective would bethird-line chemotherapy for lung cancer. Six courses of customarytreatment cost approximately $6,000 (for every month of life saved),or $72,000 per year of life saved. This cost is magnified by theloss in the patient's quality of life due to the deleterious sideeffects of chemotherapy. In essence, our $6,000 does not purchasea "full quality of life" month.

There are many tests ordered by oncologists that should also beexamined by cost-benefit analysis. One example would be cardiactesting for patients receiving doxorubicin.

The use of serial gated cardiography (MUGA) scans is almost universalin this patient population at some point, but the scientific literatureto support their use to prevent congestive heart failure (CHF)is lacking.

In fact, a study published in the 1991 American Society of ClinicalOncology (ASCO) Proceedings showed that MUGA scans did not preventCHF. We must ask, do MUGA scans provide us with any beneficialinformation, when the development of CHF can occur latently?

Furthermore, echocardiographic studies of cardiac function canprovide the same clinical information as MUGA scans at approximatelyhalf the cost. In addition, cardiac testing perhaps should belimited to the elderly, patients with suspected cardiac dysfunctionor irradiated hearts, or those on long-term doxorubicin therapy.

Managed care organizations are attempting to reduce the cost oftreating cancer today. The prevalence of managed care has madepractitioners at all levels of care re-evaluate their practiceareas.

For oncologists, the high costs of ancillary and antineoplasticdrugs, and the high expense of certain diagnostic tests, requirethat their use be scrutinized carefully for appropriateness.

By the implementation of treatment guidelines and the constantupgrading of these educational tools, managed care has been ableto initiate the process of cost and quality control.

Two Important Issues to Act on Now!

By Cary Presant, MD, Managed Care Series Editor

This month, Drs. Quan and Audeh give oncologists a special insightinto the most important steps to take in managing their practicepatterns to succeed in today's health-care environment.

Salick Health Care and SalickNet have one of the country's largestexperiences in managed oncologic care. Drs. Quan and Audeh havebrought to our attention the two most important issues of the1990s.

These two issues have the greatest impact on cost and qualityand can "make or break" the oncologist's relationshipswith insurance plans or primary care independent practice associations.The issues are practice guidelines and cost-benefit analyses.

Every clinical oncologist already has his/her own practice guidelines--theyexist in the decisions made every day for every patient. However,very few have written these guidelines down and analyzed and reviewedthem.

The successful oncologist will now do so, alone or in consensuswith partners, colleagues, or co-contractors. Oncologists shouldbe aware that guidelines are currently being formulated by theAssociation of Community Cancer Centers (ACCC) and the NationalComprehensive Cancer Network, among others.

The successful oncologist will then read the oncology journals,listen to CME lectures, and attend meetings (most importantly,ASCO, ASH, and AACR) to assist him/her in reviewing and updatingthose guidelines.

Such review should strongly consider cost-benefit analyses, sincethese will be scrutinized by insurance plans. But such analysesare frequently lacking! What is the clinical oncologist to doabout newer treatments for which cost-benefit studies have neverbeen performed?

Examples include new second-line treatments for lung cancer, eg,vinorelbine (Navelbine), paclitaxel (Taxol), and gemcitabine (Gemzar),and new methods to prevent cardiotoxicity, eg, 3-day doxorubicininfusion or the use of dexrazoxane (Zinecard).

Clinicians should strongly urge cooperative groups to immediatelybegin such ancillary cost-benefit studies in parallel with thepivotal phase III studies in progress.

In the Southwest Oncology Group (SWOG), we have recently formedwithin the Clinical Practice Committee a subcommittee to conductphar-macoeconomic analyses on important phase III studies. Suchresearch, although expensive, will teach us how and when to incorporatenew technology into our practice patterns.

For oncology, it is the best of times (molecular and pharmacologicon-cology) and the worst of times (changes in economic impacton treatment). And certainly, it is the most interesting of times.