Pilot programs drive change in healthcare delivery model

March 17, 2010
Greg Frieherr

Oncology NEWS International, Oncology NEWS International Vol 19 No 3, Volume 19, Issue 3

For quality to become the standard, care delivery must be fundamentally changed and oncologists will need to step up to work with insurance providers.

ABSTRACT: For quality to become the standard, care delivery must be fundamentally changed and oncologists will need to step up to work with insurance providers.

The current fee-for-service system is a hindrance to quality healthcare. It picks apart the care of a patient, breaking it down into diagnostic exams and therapeutic drugs, referrals and consultations. It encourages the overuse of technology and overprescription of drugs.

Decisions on care need to focus on choosing the best regimen for a particular patient, according to Peter Bach, MD, associate attending physician at New York's Memorial Sloan-Kettering Cancer Center. this will allow margins to be maintained and encourage doctors to act in the longterm interest of the patient. "We need to wrap payment around the episode. But that is going to be challenging," he said.

Dr. Bach, along with other policy experts, gathered at the 2009 Mid-South Cancer Symposium in Memphis to offer insight into how quality is defined and measured in healthcare today. The symposium was hosted by the University of Tennessee Cancer Institute.

As workflow becomes more rational and evidence-based medicine takes hold, variability will decline and quality will rise, said Douglas Blayney, MD. "We need to do the same thing every time," said Dr. Blayney, medical director at the University of Michigan Comprehensive Cancer Center and president of ASCO. "And when we make a mistake, we have to learn from it. that is where we need to go."

The episode-based system

One way to implement episode-based payment is to tie reimbursement for one year of treatment or management of a patient to the diagnosed stage of a particular cancer, said William T. McGivney, PhD, CEO of the National Comprehensive Cancer Network, based in Fort Washington, Penn.

Transition to such an episode-based or global payment scheme is needed, "but it will be extremely painful," according to Donna Abney, executive vice president of Methodist Le Bonheur Healthcare in Memphis.

Decades of fee-for-service have created a disincentive to rapid and significant change. Improvements in the past have been made in iterative steps. Attesting to the difficulty of making sweeping changes are the Obama administration's efforts at healthcare reform. Amid the bickering partisan voices have been calls for iterative reform of the existing system.

"The reality of Washington and the reality of politics is that (government efforts) end up being iterations," Dr. Bach said.

Piloting the new healthcare system

Real change, therefore, may have to come from outside the existing system, through end runs staged by providers and third-party payers working together. Some such efforts are happening now, as pilot projects sponsored by insurance companies. These pilots carve out certain types of oncology cases, challenging oncologists and insurers to think differently about care so as to produce better outcomes.

"Blue Cross is willing to fund these pilots and look at payment redesign," said Thomas G. Lundquist, MD, vice president of Performance Measurement and Improvement at Blue Cross Blue Shield of Tennessee in Chattanooga. "We are looking at these small steps, and I think they are going to pick up speed."

"The problem with pilot programs is the reason for their success. They are tightly defined, highly focused, and built on one-off negotiations between specific insurers and particular providers," said James D. Cross, MD, head of national medical policy and operations for Aetna in Hartford, Conn. "What we really need is broad payment reform that makes change happen for everybody across the board," he said. "I just don't think we are anywhere close to that."

Dr. Lundquist suggested that pilot programs may provide the ammunition for exactly this kind of wide-scale reform. They can be used to identify best practices, which might be translated into better clinical outcomes on a broad scale. Variability in practice creates waste, he said. Identifying best practices that can be applied routinely will improve quality by taking variation out of the system.

"So even though quality costs more on an episode basis, you save on the waste you eliminate by getting rid of variation," Dr. Lundquist said.

Making patient data available

A critical and currently missing component of any such reform is trust, Dr. Lundquist said. Providers and payers alike need to be sure that changes in practice and payment will be best for the patient. Insurers have a lot of information, he said, but they do not have the clinical outcomes data or the staging data that are needed to interact effectively with providers. These data are necessary to redesign payment in a clinically effective way.

The expanding adoption of information systems will lay the groundwork for getting these data. Wide-scale adoption may be a decade or more away, according to Dr. Lundquist. But if these systems are applied properly, they could have an impact in the short-term now by providing physicians and third-party payers with cost data in the context of therapeutic efficacy.

"If you have two treatments that you know offer equal efficacy, then you can pick the treatment that's most cost-efficient," he said. "If you do that under a global payment system or episodeof- care payment (system), everybody wins. The patient gets what he needs and you're dropping costs to the system."

This is why payment redesign has to come after outcomes and cost data are acquired and after best practices are developed, Dr. Lundquist said.

Dr. Cross noted that time is needed to assess the true value of changes in treatment. "The introduction of a new drug or device may raise costs initially, but its effect on the patient may be so positive that the number of inpatient days goes down. Consequently, overall costs drop," he said.

Only experience with best practices in real conditions can determine their true benefits and uncover any disadvantages, Dr. Lundquist said. "Doctors and insurers have to feel comfortable that they are getting the right data. Then you can look at the system and change the payment structure," he said.

Eventually the system may change to allow pay for performance. Or it may be adjusted to favor capitated care. What form either of these may take is not known. The only certainty in healthcare reform is that the money available to pay for healthcare will be redistributed.

"There are only so many dollars in the bucket," Dr. Lundquist said. "We have to factor in improvement in quality or outcomes or improvement in the system."

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for more presentations from the 2009 Mid-South Cancer Symposium.

But to get the most for the patient from reform efforts will take leadership on the part of physicians and third-party payers. Dr. Lundquist lamented that, like many others, he was taught in medical school to be a good collaborator but not necessarily a leader. It's a problem that persists to this day. "We need oncologists to step up and work with us in partnership to develop new models of care," he said.

Some, however, will question the need for change. Dr. McGivney recalled a 2008 editorial in the New England Journal of Medicine about the need to fix a system that is allegedly on the verge of collapse. "The final two words of the editorial were that the system is 'disturbingly stable,'" he said.

If the demise of the U.S. healthcare system is not imminent, providers and insurers will have time to structure a plan to make healthcare more consistent and effective. Gaps in information, such as outcomes data, might be filled with the coming implementation of information systems. Leadership can draw providers and payers together to review data and come up with evidence-based reforms.