Transitioning to Value Based Care:

Tennessee Oncology

A Case Study

Presentation to Norris Cotton Cancer Center

Grand Rounds

October 7, 2014

Wes Chapman

Disclosure Statement

• I do not have any financial interests.

• I do not intend to discuss off-label or investigational use(s) of a product or device.

• I attest that I am not receiving direct payments from a commercial entity with respect to this activity.

“Oncologists should become value-based

providers by eliminating unnecessary tests,

prescribing cheaper alternatives when

therapeutic equivalents exist, and keep calling

for payment reform”

Ezekiel J. Emanuel, MD, PhD

ASCO Annual meeting, 2014

Tennessee Oncology at a Glance

• Community oncology “mega-practice” – 85 physicians, 25+ locations, 40+% state market share, 70+% market share in service area

• Nashville based – 3 hospital system market

– HCA, Ascension affiliate (St. Thomas), Vanderbilt

• Long-standing referral relationships with HCA & Ascension

• Very large clinical trial presence through Sarah Cannon (SCRI) – 2nd largest Phase 1 unit in US

• QOPI certified, Aria (Varian) EMR in all practices, standardized billing through GE Centricity

• Participates in Mission Point ACO via St. Thomas

Getting to Know TN Oncology

Embattled Self Image

A Self Image Founded in Harsh Reality

7

• Over last six years

– 331 clinics closed

– 600 merged or acquired

– hospital acquisitions/agreements due to

huge margin advantage:

• Site of service differentials for

hospitals is huge revenue advantage

• 340B pricing gives non-profit

facilities huge cost advantage

* Community Oncology Alliance Report. April 2014.

MARKET PRESSURE ON COMMUNITY

ONCOLOGISTS

Exacerbating the Cost Growth in Cancer Care

Cost Drivers Wreaking Budgetary Havoc

10

1. Reference pricing – elimination of site of service differentials

approved by CMS *

2. 340B seems to be under scrutiny for reduction – opposition from

pharma, private providers, payers

3. CMS is expanding favorable program development:

1. COME HOME medical home project

2. End of life palliation program via CMMI

3. Solicitation of opinion for Value Based Care Models in Medical

Oncology

NOT ALL CHANGES ARE ADVERSE

THREE CRITICAL POLICY SHIFTS ARE UNDERWAY

* Obama administration okays reference pricing. FierceHealthFinance. May 18, 2014. * Insurers Push to Reign in Spending on Cancer Care.Wall Street Journal. May 27, 2014.

Adapting to a Changing Environment

A Brief Review of Our View of Value Based

Care

Source: Aetna Inc.

VALUE-BASED CARE HAS ARRIVED IN ONCOLOGY

13

Inherent variation

Special cause variation

PQRS, MU, V-b

purchasing

EMR

Pathway technology

Risk stratification tools

Patient triage services

14

Inherent variation

Special cause variation

- Generic vs. branded drug utilization

- bundles

Cost management technology

Utilization management services

Private oncology ACOs, Payer

sponsored bundles

VALUE-BASED CARE HAS ARRIVED IN ONCOLOGY

15

Commercial health plans are paying too much (cost) and receiving

too little (value).

1. Regimens – controlled by MD

2. Formulary – controlled by FDA, and practice

3. Utilization management solutions – controlled by third

parties

4. Patient management – Typically not delivered

5. Transparency – No plans, no audits

OUR FOCUS - COMMERCIAL HEALTH PLANS

PROBLEMS

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1. Reporting requirements without control

• Publicly transparent quality scores (NCQUA HEDIS scores)

2. Provider reluctance to adopt:

A. Payment for value models

B. Payment for savings models

C. ACOs

3. Oncologists “control hearts & minds”

4. No auditability of pathways,

bundled payments or otherwise

PAYER SELF IMAGE – PAINFUL LOSS OF

CONTROL

TN Oncology Incentives to Value Based Care

ALIGNED CONCEPTS OF VALUE

PAYER – PROVIDER – PATIENT GOAL ALIGNMENT

18

CostReduction

Quality Improvement

FFS

Pathway attribution

Bundles

PCMH

EVOLUTION OF VALUE BASED CARE

MODELS

19

-Only requires pathway adherence-Possibly single sign-on sans pre-auth

Robs pharma revenue

-Systematic triage-Patient Education-Palliation

Robs hospital revenue

ACOsBundles PCMH

Requires tech integration/APIs & provider cooperation

Requires hospital partnership

The Imperative – Match Costs with Revenue

TODAY

MULTIPLE INDUSTRY-WIDE VALUE-BASED

CARE REQUIREMENTS ARE HERE…

21

• Commercial payer programs are also growing:• National plans: WellPoint, Aetna, Cigna• Regional plans: Regence BCBS, Highmark BCBS, BCBS TN

Strategic Framework for Change (SWOT)

• Historical Strengths:

• Offering first rate cancer care and access to clinical trials

• Ability to know and support patients needs at the community level

• Access to economies in purchasing, contracting and billing

• Tremendous referral base with dedicated hospital partners

• Investment in Best-in-Class systems

• Appealing venue and practice for physician recruitment

• Capability to rapidly implement new products and services to respond to

market changes/opportunities

• Low cost provider – operates under Vanderbilt price umbrella

• Weaknesses:

• TN market dominated by local BCBS – limited bandwidth for payment

reform

• CON state limiting expansion in certain related service lines – radiation

therapy

• Locally dominant market share limits “in-market” growth

• Limited history of standard care practices across clinical sites

Strategic Framework for Change (SWOT)

• Opportunities:

– Implement Medical Home – position for future payment reform, control costs,

standardize practice

– Aggressive movement to expand economies of scale through related GPO

– New service lines, e.g. genetics lab

– Expand data use for improved care delivery – particularly pathways

– Numerous payment reform projects available through private payers and CMC/CMMI

• Threats:

– Ongoing Medicare fiscal woes and threat of very high priced new oncology drugs

– Ongoing 340 B and site of service advantage to local competition

– Ongoing drug shortages

– Locally dominant payer slow to move into Value Based reimbursement

– Payers moving to proprietary pathways systems – dramatically complicating care

delivery and billing

Changes to Survive/Thrive• Done: Service Line Expansion

– Expanded Laboratory capability

– Specialty pharmacy for orals

– Led formation of Nationwide Oncology GPO (RainTree Oncology) 50+ practices, 500+ MDs

– Genetics Laboratory (Pending)

– Continued geographic growth (Chattanooga)

• Consider: Aggressive move to Oncology Patient Centered Medical Home via NCQA accreditation as PCSP

– Adoption of Clinical Pathways

– Incorporation of Care Plans into practice, patient, referrals

– Development of Triage/Patient Management System

– Dramatic expansion of palliative care program including CMMI Grant

• Required with Medical Home: Negotiate changed payment systems with Payers based on ACO or bundles model – if you can’t do this, you will go broke!

Consideration: Do Oncology PCMHs Actually

Improve Care or Reduce Costs?

Evidence & Expert Opinion

• Costs Savings - Evidence

– Multi-year, 5 site study through UnitedHealthcare (1):

• All sites PCMHs (3 were members of COME HOME project & RainTree)

• Sites paid a fixed fee per patient – no mark-up on drugs

• Savings based on total cost of care – breast , colon & lung cancer

• Savings of 34% of expected costs ($34 million)

• Savings from hospitalizations and therapeutic radiology

– Movement to Pathways systems seems to offer 15% savings on Drugs

year 1, 6% additional year 2. (2)

– Come Home savings of $33.5 million based over 3 years and 7

practices – (percentage not given) (3)

Consideration: Do Oncology PCMHs Actually

Improve Care or Reduce Costs?

Evidence

• Quality – Evidence Positive for Oncology Medical Homes– Reported Practice Results (4):

• ED visits reduced 68%

• Hospital Admissions reduced 51%

• Avg. LOS reduced 21%

• Out Patient visits cut by 22% for all hematology & oncology

• Savings of $11,955 per chemotherapy patient

• Quality – Mixed Reviews – Particularly Primary Care

– “Despite widespread enthusiasm for the medical home concept, few peer-

reviewed publications have found that transforming primary care practices into

medical homes (as defined by common recognition tools and in typical practice

settings) produces measurable improvements in the quality and efficiency of

care.” (5)

Consideration: Do Oncology PCMHs Actually

Improve Care or Reduce Costs?

Quality Evidence

RESULTS OF UNITED HEALTHCARE PAYMENT

REFORM PROJECT

28

Result:

Predicted FFS cost = $98M

Actual cost = $64M

% savings = 34%

“There was no difference

between the groups on

multiple quality measures.”

Conclusion:“Modifying the current fee-for-service payment system for cancer therapy

with feedback data and financial incentives that reward outcomes and cost

efficiency resulted in a significant total cost reduction.”

3 years, 5 sites, 810 Patients, PCMHs

Newcomer LN. Changing Physician Incentives for Affordable, Quality Cancer

Care: Results of an Episode Payment Model. Doi:10.1200/JOP.2014.001488

UNITED HEALTHCARE COMPENSATION MODEL

29

“Medical oncologists

were paid a single fee, in

lieu of any drug margin,

to treat their patients.

Chemotherapy

medications were

reimbursed at the average

sales price, a proxy for

actual cost.”

Our Conclusions Regarding Oncology PCMH

• PCMHs seem to work quite well in reducing process variation through the use of Pathways

– Pathways also can reduce drug costs from process variation – but this is a year 1 & 2 opportunity

• PCMHs seem to work quite well in reducing total costs through management of unnecessary hospital admissions and ED use

– This is an obvious benefit to the patient – providing the right care, on time and in the right venue

• Palliation offered through the PCMH is simply better for the patient and better quality

• It is unclear which clinical outcomes measures are impacted by oncology PCMHs

Medical Home Deliverable

Care Considerations

Cancer care that is: Coordinated with the central focus on the patient and their

entire medical condition Optimized based on evidence-based medicine to produce quality

outcomes

Accessible and efficient, with treatment provided in the highestquality, lowest cost setting for the patient

Delivered in a patient-centric, caring environment that optimizes patient satisfaction

Continuously improved by measuring and benchmarking resultsagainst other facilities providing care so that best practices“raise the bar” in delivering care

Institute of Medicine (IOM) report in 1999,

Ensuring Quality Cancer Care

Oncology Medical Home – Design

Considerations - We Match up Pretty Well

• Standardized evidence-based guidelines for prevention, diagnosis, treatment, and palliative care - Pathways

• Measurement and continuous monitoring of a core set of quality measures – NCQA PCSP Model

• Agreed upon care plan prepared by experienced professionals, outlining the goals of care – Care Plans

• Access to clinical trials - SCRI

• Policies to ensure full disclosure to patients of information about appropriate treatment options – Care Plans, PCSP

• Mechanisms to coordinate services – Patient Management

• Quality care at the end of life - Palliation

• Policies to address the barriers to receiving appropriate cancer care in specific segments of the population – PCSP, Internal Policies

Institute of Medicine (IOM) report in

1999, Ensuring Quality Cancer Care

Medical Home Accreditation

Other Programs Evaluated in Our Planning

Source: The Advisory Board

Sites of Focused Study

• Consultants in Medical Oncology and Hematology, Drexel PA

– Level 3 PCSP, led by Dr. John Sprandio

– Pioneers in Oncology Medical Home, constant focus on patient

engagement and best practice adherence

– Proprietary EMR and patient management software

– Focused first on Triage, then pro-active patient management

– Self Funded Medical Home Development

• New Mexico Cancer Center

– CoC certified, led by Dr. Barbara L. McAneny

– Founder of COME HOME Project, $19.8 million CMMI Grant

– Includes 7 practices, and proprietary Pathways and Patient

Management software

Consultants in Medical Oncology and

Hematology: Summary Facts

Consultants in Medical Oncology and

Hematology: Methods

New Mexico Cancer Center & COME HOME

New Mexico Cancer Center & COME HOME -

Methods

• Practice Size 10-15 providers – 7 practices

• Large emphasis on IP/IT development

• Special emphasis on Triage – with proprietary

system

• Includes Saturday clinic and “after hours”

• Multiple layers of patient support

• Some practices focused on patient acuity

scoring

Our Distillation: 4 Pillars of our Medical Home

• Pathways: NCCN compliant Pathways are the base level

requirement for our PCMH, Rx, Genetics and Diagnostic imaging

– Have to be:

• Rigorously and systematically maintained

• Independent of any payer organization

• Cloud based

• Linked to our Aria EMR

• Capable of practice level customization

• Capable of producing supportive care pathways as well

• Capable of easily dealing with our clinical trial volume

• Capable of producing Care Plans

– Key metrics: 90% Attribution, 80% Compliance

Pathway System Selection Process

• All Major commercial systems evaluated

– Via Oncology: Not payer or GPO affiliated, excellent clinical content &

systems, good patient materials & palliation

– P4: Associated with Cardinal and various payer organizations, good

clinical content, limited integration with our system

– Eviti: Multiple payer customers nationwide, Express Scripts, limited

system integration

– Clear Value Plus: McKesson product, excellent integration, NCCN

affiliation, strong competitor

– Flat Iron: Juvenile stage pathway product, Altos EMR tie in, takes all

practice data for sale to pharma

Via and Clear Value were our 1&2 – We went with Via

Impact of Pathways on Compliance

Aetna Study

Current Pathway Utilization

Via Oncology System - Interface

Via Oncology System - Interface

Care Plans

• Care plans: A documented account of care shared with the Patient, Payer and other Providers at transition of care. Form a fundamental information tool with:

– Payers:• Care plans form the basis for attribution and compliance metrics

• All payer expectations are driven by care plans and subsequent reports/audits

• Flexibility in plan design important

– Patients:• Plans for the fundamental curriculum around which patient education takes place

• Plans form the basis for subsequent patient management

– Referrals:• Plans are the fundamental information tool for MU compliance

• Plans facilitate continuity of care

• Key Metric: Shared with the Patient, Payer and other Providers at 90% of transitions of care, includes all care provided by the practice and additional elements as mandated by Meaningful Use.

Pathway System Addresses Phase 1 Care Plan

Requirement

Patient Management

• Reactive (triage) and proactive management of disease between office

visits; systematic response to patient concerns, including non-oncology.

Goals: Improved patient care; improved outcomes; reduced cost; increased

adherence to care plans. Compliance

• Key considerations:

– Must offer triage first, then proactive patient management

– Must integrate with phone and data management systems

– Triage must conform with best practices, and integrate smoothly with scheduling

– Must include multi-modal including phone, text, email

– Must support development of supportive care pathways with automatic notifications and

work lists

– Must integrate with Pharmacy

• This is a team sport – must include all members of the care team

• Key Metric: Control 90% of ED and hospital use

Patient Management - System Use Cases

• Provider

– Triage: Safe, timely intuitive triage

– Patient management: Supportive care based on predictive pathways

– Risk analysis based on clinical data

– Frequent periodic patient status/distress reporting

• Payer

– Timely reports on: triage, status variation, pathway adjustment

• Patient

– Meaningful and timely educational materials

– Direct access to supportive care

– Meaningful information regarding status

Triage/Engagement Considerations

Telephonic Triage is a requirement for “Stage 1” Medical Home Development

Triage Has three fundamental components

1) Patient engagement and symptom/situation description

2) Tier the patients condition based on objective criteria, reflecting symptoms, history and risk

3) Direct the patient to the most appropriate medical care

Triage frequently means late stage correction of a problem -anticipation, training, education should eliminate most triage

Triage system needs to be built to accommodate:

1) Broader patient engagement requirements – e.g. status reporting

2) Prospective tiering and planning based on treatment and status

3) Demographic data inputs from EMR

Validated Tools

Edmonton Symptom Assessment System: Edmonton

Zone Palliative Care Program: http://www.palliative.org/tools.html

Validated Tools

Ontario Cancer Symptom Management: https://smg.cancercare.on.ca/

Validated Tools

Telephone Triage Protocols for Nurses, Briggs: This is the standard reference in the US. Ideally, we would be able to include in an electronic format. 3 Tier Protocols

Not Optimized to Cancer

Consulting support seems available via Ms. Briggs

Emergency Nursing 5-Tier Triage Protocols (also by Ms. Briggs)Optimized for emergency use

Probably more complicated than needed

Telephone Triage for Oncology Nurses, Hickey & Newton: Optimized for Oncology

Triage protocols are a mix of oncology and other

Needs consistency and standardization

System Design & Considerations

System built on hosted cloud platform – must be HIPAA compliant

Built around relational data base – tables built from validated sources

Tiering and work-listing for call return & patient response

Maintains and reports real-time on functionality data for system

Integrates with and captures phone system data

Role & Permission based for access and input

Receives ADT feeds for demographic information from demographic master system

Uses standardized and validated patient symptom ranking and distress scoring

Build done in iterative phases: First – Triage

Second – Patient status reporting (used for outcomes, risk, standardized check-in)

Third – Patient risk/acuity scoring with work-listed outreach requirements

Fourth – Incoming partner data feeds & Date Warehouse

Fifth – Learning system: first focused on actual vs expected, “gamified” to patient

Patient Management – Predictive Analytics

• Initial Objective – Risk for Hospitalization

• Key design consideration – based on clinical (EMR)

rather than payer data

• Must be based on experience in medical oncology –

general system not relevant for our needs

• Depends on data partnerships with referral hospitals

• Evaluated 15-20 systems

• Chose Clinicast – group spun out of Kaiser

Palliation

• Integral part of patient management – we use for all

patients (certain clinics), beginning with the first visit

• Difficult to justify at the practice level outside of

Value Based Care payment model

• Moving to patient resources from the pathways

system

• Really depends on good patient management tools

• We applied to participate in the CMMI new palliation

model with a local hospice

57

4. Palliation -- always relevant throughout the patient’s course of treatment

• Alive Hospice / Tennessee Oncology Partnership

• Applied for Medicare Care Choices grant, allows for simultaneous curative

and palliative care by a non-profit hospice

• Pain management

• Establishment of patient-driven treatment goals

THE FOUR FUNDAMENTALS OF A VALUE-BASED

CANCER SOLUTION

58

$7,834$9,230

$10,051 $10,362$11,469

$25,261

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

6th MBD 5th MBD 4th MBD 3rd MBD 2nd MBD Last MBD

Mean OP chemo cost Mean OP service cost Mean hospice cost Mean IP cost

IN-PATIENT CONTINUES TO DOMINATE EOL COSTS

Commercial Patients, Mean $/month

N = 28,530

IT System Before Value Based Care

IT System After Value Based Care

The Alternative to Physician Directed Value Based

Care – Aggressive Expansion by PA Companies

PA Company Planning documents

The Alternative to Physician Directed Value Based

Care – Aggressive Expansion by PA Companies

PA Company Planning documents

The Alternative to Physician Directed Value Based

Care – Aggressive Expansion by PA Companies

PA Company Planning documents

VALUE-BASED PERFORMANCE

SUMMARY OF KEY CONCEPTS AT

TENNESSEE ONCOLOGY

Best care practices transparency, adherence, and auditability

Patient-Centered Care = Value Delivery

Communication of expected outcomes and risks

Communication of costs to patient

Empower patients and families to make informed choices

Respect of patients’ decisions and resources

Value delivery achieved through a certified patient-centered

medical home

4 pillars: (1) Pathways; (2) Care plans; (3) Patient

management; (4) Palliation64

Citations

1. Newcomer LN et al: Changing Physician Incentives: An Episode Payment Model. JOP.ASCO. July 14,2014, Published ahead

of Print.

2. Feinberg B et al. Third-Party Validation of Observed Savings From an Oncology Pathways Program. American Journal of

Managed Care. Volume 19, Special Issue 4. May/June 2013

3. Oncology Business News, August 2014

4. DOI: 10.1200/jop.2014.001386; published ahead of print at jop.ascopubs.org on March 11,2014.

5. Friedberg MW, Schneider EC, Rosenthal MB, Volpp KG, Werner RM. Association Between Participation in a Multipayer

Medical Home Intervention and Changes in Quality, Utilization, and Costs of Care. JAMA. 2014;311(8):815-825.

doi:10.1001/jama.2014.353.