Payment Models May be Associated with Fewer Visits, Lower Costs in Cancer Settings

Payment models with shared-savings components, such as the Oncology Care Model, may be associated with fewer visits and lower costs in certain cancer settings in the first year.

Findings published in JAMA Network Open suggested that payment models with shared-savings components, such as the Oncology Care Model (OCM), may be associated with fewer visits and lower costs in certain cancer settings in the first year.

However, researchers indicated that the savings may be modest, given the costs of program administration.

“The magnitude of these overall associations needs to be weighed against the costs and potential savings incurred elsewhere (e.g., hospital and pharmacy),” the authors wrote. “However, the OCM was associated with different care decisions made upstream to those settings within the confines of the physician’s office, especially in prostate cancer.” 

In this nonrandomized controlled study, researchers used a difference-in-difference approach on 2 years of data - 1 year before and 1 year after the launch of the OCM - to compare the differences between participating and nonparticipating practices, controlling for patient, clinician, and practice factors. Associations of participation with care use and cost were estimated for care directly managed by clinicians from a large network within their Medicare populations for breast, lung, colon, and prostate cancers. 

In addition to standard fee-for-service payments, participating practices were paid a monthly management fee of $160 per beneficiary and a potential risk-adjusted performance-based payment for eligible patients who received chemotherapy treatment. 

At the physician level, monthly means data were evaluated for 11,869 physician-months for breast cancers, 11,135 physician-months for lung cancers, 8,592 physician-months for colon cancers, and 9,045 physician-months for prostate cancers. Participation in the OCM was associated with less physician-administered prostate cancer drug use (difference, 0.29 percentage points [24.0%]; 95% CI, -0.47 to -0.11) translating to a mean of $706 (95% CI, -$1,383 to -$29) less in drug costs per month. 

Moreover, monthly drug costs were also lower, at $558 (95% CI, -$1,173 to $58) less for treatment for lung cancer. Total costs were lower by 9.7% or $233 (95% CI, -$495 to $30) for breast cancer, 9.9% or $337 (95% CI, -$618 to -$55) for lung cancer, 14.2% or $385 (95% CI, -$780 to $10) for colon cancer, and 29.2% or $610 (95% CI, -$1095 to -$125) for prostate cancer. However, these observed differences were largely offset by program costs. 

Furthermore, clinician visits were also lower by 11.2% or 0.11 (95% CI, -0.20 to -0.01) percentage points among patients with breast cancer and by 14.4% or 0.19 (95% CI, -0.37 to -0.02) among patients with colon cancer. 

“This nonrandomized controlled study adds to the emerging literature by finding that first-year OCM participation was associated with lower office-based costs,” the authors wrote. “However, consistent with prior research on similar programs, we also found that these savings were largely offset by the costs of these programs.” 

According to the researchers, these study findings highlight several open questions as well, such as, does lower utilization in the office setting lead to differences in hospital-based care? Early research suggests this possibility. In addition, how would a potential change in prostate cancer care, whether it be a reduction or a shift to the pharmacy benefit, be associated with patient financial health? Research into oral chemotherapy access also suggests this possibility.

Overall though, researchers indicated that further research into these questions and other related topics would deepen our current understanding of these models. 

“Additionally, the literature suggests that divergence in care can take a few years, so evaluation of longer periods in future research could help to elucidate these potential effects in oncological treatment,” the authors wrote. 


Walker B, Frytak J, Hayes J, Neubauer M, Robert N, Wilfong L. Evaluation of Practice Patterns Among Oncologists Participating in the Oncology Care Model. JAMA Network Open. doi:10.1001/jamanetworkopen.2020.5165.