Given the skyrocketing costs of cancer care - and cancer drugs specifically - payors have been experimenting with new and varied strategies for bringing spending on oncology pharmaceuticals under control. These strategies range from increasing pre-authorization requirements to requiring adherence to NCCN guidelines, and even, experimenting with new payment models. From a provider perspective, one of the more harmful strategies to emerge is the use of alternate pharmaceutical acquisition channels, more commonly known as "white bagging" and "brown bagging."
What are "white bagging" and "brown bagging?"
Traditionally, oncology providers have operated using the "buy and bill model." They purchase specialty drugs, like chemotherapeutics and ESAs, administer them to patients, and then bill payors for the drug administration and for the drugs themselves. Drug reimbursement is typically equal to the cost of the drug plus a fixed percentage.
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You may remember that las year, the NCCN put out a report titled "Managed Care and Medical Oncology: Cancer Is Now on the Table." It summarized the findings from interviews and surveys of managed care executives about the rising costs of cancer care. Not surprisingly, executives reported "alarm" about the rate with which oncology costs are rising, and indicated their intention to try to control costs through increased utilization management, especially for drugs and biologics.
The NCCN is working to update that report and has released some of preliminary findings in a press release available here. Conversations with managed care executives during the spring of this year revealed that oncology costs and utilization continue to be a primary concern. Among the strategies that managed care executives intend to use to contain costs are: "aggressive contracting" with physicians and hospitals, pilots of new reimbursement models, and new policies for the use of certain drugs.
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You may remember in last year's National Meeting research we covered strategies for promoting more standardized, evidence-based care in oncology. As part of that research, we looked at some of the vendor products currently on the market designed to help cancer providers achieve that goal - everything from Zynx's OncologyCare tool for developing standardized order sets through to the various clinical pathways products from Via Oncology, P4 Pathways, and Innovent Oncology. Recently the NCCN announced the launch of yet another type of tool for supporting evidence-based practice.
The tool, which will be called Proventys CDS Oncology, is the result of a partnership between the NCCN and decision-support software vendor Proventys. It is described as a web-based platform that will facilitate adherence to NCCN guidelines and is expected to be available in the fourth quarter of 2010.
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Across the past year there's been more and more discussion about the cost of cancer care. ASCO has made it a top priority, even going so far as to provide guidance on how oncologists should discuss the cost of care with patients. New data released earlier this year in Health Affairs provide evidence that oncologists are increasingly accounting for the cost of cancer care, although they might not be proactively discussing costs with patients.
The survey is the largest to date to assess oncologists' attitudes about the cost of treatment and was conducted by researchers at both Tufts Medical Center and the University of Michigan. They found that 84% of oncologists consider patient's out-of-pocket costs when recommending cancer treatment, but less than half of surveyed physicians actually discuss costs with patients. Undoubtedly, as cost data becomes more readily available to physicians, this conversations will be easier to have. We actually looked extensively at how to help estimate costs up front to engage in these conversations - you can access that research here. Notably, the survey also asked about comparative effectiveness, and found that 79% of oncologists support more government research into comparative effectiveness.