As cancer costs rise, employers looking to Centers of Excellence, bundled payments

Everyone knows someone who has been touched by cancer and for patients, survivors, and their families, it can be a long journey marked by uncertainty, anxiety, and a mix of other emotions.

Cancer is complex, individual, and personal, and patients are immediately faced with identifying high-quality providers, managing care coordination, and making a host of decisions about their care and treatment.

This year, an estimated 1.9 million Americans will be diagnosed with cancer — up from 1.8 million in 2021, and the highest levels seen since 2007.

The cost and financial impact to patients can be significant — to the tune of $21 billion a year, in both out-of-pocket costs and time spent traveling to, waiting for, and receiving care.

Historically, oncology hasn’t been a top priority for benefits managers due to its complexity, but increased health care spending is leading them to look to innovative solutions.

Cancer costs will reach $246B by 2030

Oncology spending has been on the rise and shows no signs of slowing down.

Annual costs for cancer-related medical services and drugs are projected to reach nearly $246 billion in the U.S. by 2030 — a 34% increase since 2015, a study in the journal Cancer Epidemiology, Biomarkers & Prevention finds.

For employers, oncology is among the top 3 spend categories for high-cost claimants. What’s more, although oncology accounts for only 1% of claims volumes, it makes up 15% of overall employer health care spend.

Part of the reason for this surge is that people are living longer, but with an epidemic of chronic diseases and comorbidities, only compounded by COVID-19, they’re not necessarily living healthier lives.

Read more: Controlling cancer benefits costs begins with internal decision-making

Plus, while pre-pandemic cancer screenings have rebounded, gaps in screening for underserved populations remain, which is likely to lead to late-stage diagnoses and increased mortality.

We’ve also seen a rapid development of new diagnostics, drugs, and treatments, such as immunotherapy, targeted therapy, and CAR T-cell therapy, which are being used for more types of cancer.

The good news is that we’re seeing improvements in quality of life outcomes and survival rates, but the treatments are also extremely costly.

As a result, employees are often faced with financial toxicity, which can have an impact on their mental health, clinical outcomes, and even survival rates. In fact, patients are more worried about the cost of their cancer care than dying from the disease.

As costs continue to rise and employers struggle with attracting and retaining top talent, and driving engagement, it’s vital that they re-think their benefits and look at how they can better manage high oncology spend.

Oncology Centers of Excellence (COEs) & bundled payments improve outcomes, cost predictability

Value-based Centers of Excellence (COE) solutions have finally made their way into oncology, and employers are increasingly looking to them to address their growing health care costs.

Using a bundled payment model ensures that employees receive care from high-quality, high-value physicians who deliver evidence-based, guideline-concordant care, rather than those who are incentivized to provide more care and prescribe high-cost cancer drugs in the traditional fee-for-service model.

Receiving care from a COE is linked to improved quality of life, and survival rates, as well as more cost-effective care, which is vital since there can be a significant variation in these measures between oncology providers.

With a tremendous variability in costs especially in the first year of a cancer diagnosis, these solutions give employers and patients full visibility, more control, and greater predictability when it comes to their oncology spend.

Plus, patients never receive a surprise medical bill and usually have their cost-share waived, meaning that financial toxicity is no longer an issue.

How to identify a value-based COE solution

Value-based COE solutions for oncology are where health care is headed, but not all solutions are created equal.

When considering a partner, employers should look for those that prioritize high-quality, evidence-based, multidisciplinary care, and can demonstrate improved outcomes, survival rates, and optimal patient experience scores.

In order to move the needle in terms of cost reduction, the program should incorporate both guidance and the actual treatment.

Guidance is a key part of the move to COEs and is a critical upstream opportunity to drive higher-value cancer care that ensures proper diagnosis and effective, individualized treatment plans. To accomplish this, employers should look for programs that include diagnostic work-ups, creation of the treatment plan, and expert opinions and review. Importantly, they should also consider the duration of the support. Many solutions on the market today only cover an upfront expert review of the diagnosis and treatment plan. But best-in-class platforms will provide longitudinal support for both patients and their treating oncologists because cancer is often unpredictable and requires ongoing monitoring and changes to the treatment plan.

A partner should also have a willingness to put risk on the line, incentivizing providers to deliver cost-effective care and exploring opportunities to reduce costs, such as adopting biosimilars and using hypofractionation when appropriate.

COEs should also be committed to reducing unnecessary care.

In oncology, it’s of paramount importance that cancer patients are kept out of the emergency room and hospital for treatment-related complications.

Related: Employers adopt new strategies as cancer becomes leading health care cost driver

COEs should provide proactive symptom management, including systematic, timely follow-up for high-risk patients, and may also offer remote patient monitoring (RPM) and urgent care clinics devoted to symptom management and supportive care.

Should complications arise, however, the partner should offer a warranty in which the costs for treatment-related complications are included in the bundle and not paid for separately.

Additionally, the solution should add value to the patient experience, providing employees and their families with an exceptional experience that includes a patient care team, coordination of care and travel, and on-demand accessibility via an app.

In the current economic climate, and with health care costs and oncology spending on the rise, it’s imperative that employers invest in new solutions, and in their employees.

Randy K. Hawkins, M.D., FACHE, CMO, Carrum Health and Deirdre Saulet, PhD, VP of Oncology Services, Carrum Health.