What It Costs to Be an Oncologist

June 1, 2014
Juneko Grilley-Olson, MD
Juneko Grilley-Olson, MD

One of the most fascinating sessions I attended so far here at ASCO was on payment reform. As a faculty member of a cancer center at a state university, I generally consider myself lucky that I can remain quite sheltered from the financial side of oncology clinical care.

One of the most fascinating sessions I attended so far here at ASCO was on payment reform. As a faculty member of a cancer center at a state university, I generally consider myself lucky that I can remain quite sheltered-ignorant, really!-from the financial side of oncology clinical care. I only actively think about it when I get called to the annual review of my financial score card, which includes a tally of both my relative value units (RVUs) and my research dollars. For this reason, I found the Education Session “Community Oncology Town Hall: Ongoing and Future Issues for Practice” very interesting, even visionary. It was different than I expected it to be-it basically consisted of a proposal by ASCO rather than a primer of the current state of affairs. Even in my relatively sheltered existence, I realize the dysfunction of fee-for-service (FFS) payments, which are bizarre at best and asinine at worst. FFS, of course, rewards physicians for ‘effort’ and can inadvertently incentivize physicians to use more expensive tests and more expensive drugs, and to do so more often. Clearly the cost of care is unsustainable and more is not always better.

ASCO has convened a panel to develop a proposal that would completely overhaul the payment system. This is important because the current system is too broken to fix, and if oncologists don’t propose the solution, someone else (insurers, MBAs, etc) will, and we will be stuck with it, without having given input. Specifically, the focus of the proposal is on replacing the current FFS model. All payments would be indexed to inflation (with adjustments for Quality Oncology Practice Initiative (QOPI), and pathway and resource utilization), and the model would reward for enrollment in clinical trials. The overarching goals include improving flexibility, simplifying coding (from 63 to 9 billing codes), and removing disincentive for oral therapies.

The payment breakdown in the ASCO proposal can be broken down into the following categories:

New-patient payment: a single payment for all evaluation and decision-making (other than diagnostic imaging and other ancillary services)

Treatment monthly payment: active treatment or hospice care

Transition of treatment payment: eg, second- and third-line treatment planning or survivorship

Non-treatment monthly payment: active monitoring payments

There would be continued FFS for lab, imaging, bone marrow biopsies, bone marrow transplants, benign heme, etc.

Concerns/doubts were raised by panelist Barbara McAneny, MD, (New Mexico Oncology Hematology Consultants, LTD), who felt that it is doubtful that Congress would understand the overhead expenses incurred for average patient costs-McAneny estimates are that it costs ~$900/month per patient to maintain acceptable clinical standards. Furthermore, she pointed out that it costs money to implement change to a practice, and would be especially hard on small inner-city and rural practices. An audience member who apparently owned a small private practice was also concerned that, given his current inability to purchase chemotherapy drugs at a volume discount, a lump payment per patient would cut into his profit margin. One of the other panel members indicated that ASCO’s model would factor in/adjust payments based on a practice’s operating expenses, at least initially. Basically, continuous cost improvement may cut off fat at first, but some questioned whether it would quickly turn into cutting off the muscle and bone of the practice as well. Finally, Jennifer Temel, MD, Massachusetts General Hospital Cancer Center and an expert on palliative care, pointed out that palliative care should be incorporated all along. ASCO indicated that a palliative care NP/MD would be implement alongside other care and incorporated into the system.

How is all of this reform actually going to happen? In reality, it would require payers, physicians and, most importantly, Congress to come together and agree on a plan. SGR legislation was proposed and apparently had bipartisan support-support of committees, endorsed by physician groups and a “reasonable” price-tag estimate from the Congressional Budget Office-but ultimately the House tied it to a bill designed to delay implementation of the Affordable Care Act bill, which obviously was not passed…so this is clearly a slow work in progress.