Top payment issues in hematology

In this Q&A, a presenter at the upcoming ASH conference discusses new hematology payment models and the top challenges payers face in this area.

Under the Center for Medicare & Medicaid Innovation (Innovation Center), the government has been exploring alternative ways of paying for care that ensures effective care delivery while controlling costs.


Joseph Alvarnas, MD, City of Hope, Duarte, California, will discuss one of those models, the Episodes of Care Payment Model, during a presentation at the American Society of Hematology (ASH) meeting in Orlando, Florida.

“For decades, healthcare costs and expenditures were rising in an uncontrolled and unsustainable way,” Alvarnas says. “Our annual national healthcare expenditures are $2.6 trillion. This is more than the gross domestic product of Russia, Brazil, Italy and Canada."

The Affordable Care Act, says Alvarnas, is attempting to control the rate of growth in healthcare spending while ensuring that healthcare dollars are spent in delivering effective care.

Alvarnas’ session “Measuring Episodes of Care and How to Turn Them into Payment” will take place December 6 at the ASH Practice Partnership Lunch. Here he shares more about the model, and what attendees who attend his session can expect to learn.

Managed Healthcare Executive (MHE): Can you please explain episodes of care in hematology?

Alvarnas: Episodes of care payment is a way of trying to realign payment for cancer care around a period of time rather than simply paying for each service in a separate and disconnected way. The idea is that by linking services around a period of time, physicians are more likely to be mindful of their clinical decisions and think more carefully about how the care that they deliver fits into the path of taking a patient from the time of diagnosis through completion of chemotherapy. The concept also tries to reign in healthcare costs by setting a fixed payment for that period of time, rather than providing a financial reward for providing quantitatively more services.

MHE: What are the biggest issues in hematology that payers are experiencing?

Alvarnas: The cost of care is rising rapidly. New, targeted therapeutic "wonder drugs" are changing patients’ lives for the better and helping more patients to survive. Unfortunately, the price of these drugs is growing at an astronomical and unsustainable pace. Many of these agents cost well over $90,000 per year. This results in an enormous burden to payers and severe economic consequences to patients. This latter concept is called "financial toxicity." The cost of many of these wonder drugs is causing patients to have to decide between food and clothing versus their anti-cancer drug. This is an untenable situation.

Costs are also escalating because healthcare technology continues to expand but they are not always used in the most effective way. Ensuring that physicians across the United States practice evidence-based cancer care is also a significant challenge to the system.


Next: What advice do you give payers to deal with these issues?



MHE:  What advice do you give payers to deal with these issues?

Alvarnas: We have to look very carefully at data. Too much of our care delivery system works in the absence of data. For the $124 billion that we spend annually on cancer care, we know very little about patient outcomes, survival, quality of life and effectiveness of care. There are many cancer care stakeholders-patients, families, physicians, payers, government, pharmacy benefits managers, employers and pharma. We each see a piece of the puzzle without seeing the entire value map of what kind of care we deliver, how effective that care is and whether we are spending our healthcare dollars in ways that are most effective for our patients and their families.

MHE: What are some of the biggest payment issues in hematology?

Alvarnas: Blood cancers are diseases that are often very expensive to treat. Effective care of a patient with acute leukemia, lymphoma and myeloma is quite complex. As there has been a push by government and payers to control costs, many patients have been restricted to the lowest cost system, rather than the system that provides the most appropriate and effective care. As payers become more and more focused on cost, our challenge is to remind them that issues of cost should never be viewed separately from outcomes data. I strongly believe that care should be judged based upon not just the cost of care, but the value of the care that is delivered. Developing a model that fully expresses the multidimensional nature of value is complex and requires that we think very carefully about what is most important for our patients. This includes receiving appropriate, expert care in a timely way. This may not, and is often not, the least expensive way to delivery care.

MHE: What defines success in payment for in the episodes of care model?

Alvarnas: Success in a cancer payment system requires a complex definition. Ideally it is a financially sustainable system that provides economic incentives for delivering best practice care to patients in a consistent fashion while providing negative financial incentives for interventions, medications and treatments that do no help the patient. On a practical level it means that we have a payment system that incentivizes the most effective alignment of information and talent-physicians, nurses, pharmacists, social workers-around the patient’s needs and that the system is designed to remain firmly centered around the patient’s needs from diagnosis through completion of care.

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