With cancer care costs soaring, will health insurers be asking whether the patient outcomes justify new and expensive diagnostic and therapeutic advances?
Medical laboratory companies offering expensive molecular tests for cancer and pharmaceutical companies that sell super-expensive cancer drugs are ready to hit the financial wall with payers and the healthcare system. That’s the opinion of Paul Keckley, Ph.D, a widely-read healthcare strategist.
Keckley warns that the cost of cancer care management is nearing a tipping point where the relative value of innovations may no longer outweigh the cost. In this new environment, Keckley expects pathologists, medical laboratory scientists, and others working in cancer care to face challenges over the cost-effectiveness of their diagnostic and therapeutic advances.
Cancer No Longer a Death Sentence for Most Patients
The good news is that innovations and breakthroughs in cancer detection and treatment mean “cancer is no longer a death sentence for the overwhelming majority of newly diagnosed patients,” Keckley reports. He points out that mortality rates from cancer have fallen 22% since their 1991 peak. As a consequence of improved diagnostic and therapeutic services, the number of cancer survivors in the U.S., which now numbers 13.7 million, will continue to grow.
“The issue is not whether we are getting better results from cancer care management,” wrote Keckley. “The question is this: are the costs of these diagnostic and therapeutic innovations matched by measurable value for those who pay for it? It’s a relative value question, and it’s tricky. And trends in cancer care suggest it will become a bigger issue for the U.S. system in coming years.”
This issue may be of particular importance to pathologists and laboratory scientists who have been at the forefront of advances in cancer diagnosis and treatment. That includes the ability to use genome sequencing in support of more accurate cancer diagnoses and personalized treatment options.
However, higher cancer survival rates have carried a hefty price tag. Keckley noted the cost of cancer care management is continuing to soar. For example, oncology costs are projected to rise to more than $173 billion by 2020, while cancer drug costs have increased 20 times faster than the Consumer Price Index for the past 15 years. In the past decade, cancer drug prices have leapt from an average of $5,000 per month to $10,000 per month.
Trends Driving the Cost and Effectiveness of Cancer Care
In addition to improving survival rates and escalating costs, Keckley outlined three other trends shaping the future for cancer care management:
• Increasing prevalence and demand. By 2030, cancer is expected to be the nation’s leading cause of death (largely because of an aging population), with the number of new cancer diagnoses increasing by 45%. Meanwhile, major medical centers such as the Cleveland Clinic are expanding their cancer programs.
• Accelerating pace of innovation and diagnostic therapeutics. “Ways to diagnose and treat cancers at various stages are increasing exponentially,” stated Keckley. “Seven of the Institute of Medicine’s top-10 recommended Comparative Effectiveness studies address changes in the diagnosis and treatment for cancer.”
• Increased public attention. Direct consumer advertising by Cancer Treatment Centers of America, Huntsman Cancer, drug manufacturers, and others have put cancer care management in the spotlight. Patients no longer view a cancer diagnosis as a death sentence but as a chronic condition that is stressful but manageable.
Cancer Care Expected to be ‘Ground Zero’ in Value-based Payment Debate
As the U.S. healthcare system transitions from fee-for-service healthcare models to value-based reimbursement, Keckley predicts that “cancer care will be ground zero in the health system’s transition of volume to value, and it will force intense discussion about the relative value question.”
He says the Center for Medicare and Medicaid Services’ (CMS) new Oncology Care Model—which is utilizing “appropriate aligned financial incentives to improve care coordination, appropriateness of care and access to care for beneficiaries undergoing chemotherapy”—is but one example of the pace of change.
As private health insurers follow CMS’s lead, they will distance themselves from fee-for-service even as they look for ways to rein in cancer care costs and improve outcomes. As examples, Keckley pointed to an Anthem Health Insurance program that pays providers $350 per month for each patient on one of the insurer’s standardized cancer care regimens, and UnitedHealthCare’s to pay physicians a set amount for each chemotherapy drug regimen. This is a trend that was the subject of an earlier Dark Daily e-briefing.
Will a Shrinking Cancer Care Industry be America’s Legacy?
In this ever-increasing performance-based environment, pathologists and clinical laboratory managers will need to demonstrate added value to justify their share of a bundled payment for cancer care.
Keckley further expects that the “relative value challenge in cancer care” will be an issue that permeates through the healthcare industry for years to come. It may even dictate whether the U.S. retains its leadership role in treatment and prevention of the disease.
“Cancer care management is an American health system success story,” Keckley declared. “Our innovations benefit the world. Our advances set the standard for care. But our future success is not guaranteed by our rich legacy—until and unless the relative value question about cancer care management is addressed forthrightly in a meaningful public discussion, its future is uncertain, reserved for fewer and fewer who can afford it.”
Pathologists who agree with Keckley’s prediction that the skyrocketing cost of cancer care is about to reach a tipping point are perfectly positioned to provide a solution to physicians, patients, and payers. Pathologists and medical laboratory scientists who perform the genetic tests and molecular diagnostic assays utilized to diagnose cancer and identify the most appropriate therapies for individual cancer patients will have a key role in helping oncologists avoid prescribing expensive cancer drugs that won’t work for individual patients.
Since these drugs can run from $10,000 to more than $100,000 for a single cancer patient, there is huge potential for pathologists to play a key role in controlling the overall cost of cancer care even as they deliver more accurate diagnoses that contribute to improved patient outcomes.
—Andrea Downing Peck