Journal Article

Impact of Including Drug Spending in Oncology Alternative Payment Models

Maini, Luca

2023

Overview

In this article, we develop and demonstrate a method for determining whether inclusion of drug costs is the right decision for providers who are considering alternative payment models. * Using claims analysis and understanding of care delivery, providers can assess the pros and cons of including drug costs. * We demonstrate that including drug spending in a cancer chemotherapy bundled payment model may be the best choice for a cancer care provider. * The method demonstrated in this article can be applied to any type of risk-based payment model and can substitute other specific aspects of the payment model beyond drugs. _____ Alternative payment models (APMs) for cancer care (eg, Medicare's Oncology Care Model [OCM] and Enhancing Oncology Model) usually are designed around the total cost of care (TCOC) for a given episode of care. [...]risk-bearing entities (eg, provider groups and health systems) considering participation in APMs that include drug spending often feel overly exposed to the actuarial risk of treating patients who need high-cost drugs. Variation in patient cost that cannot be accounted for by risk adjustment exposes provider groups to significant uncontrollable financial risk in an APM. Savings can arise by achieving better clinical outcomes (eg, reducing hospital admissions), increasing the efficiency of care delivery, implementing pathways, etc.7 Generally, provider groups that participate in APMs expect to receive a positive shared savings payment on average (if that were not the case, the provider group should not participate in the APM).

• Publisher: Intellisphere, LLC,MultiMedia Healthcare Inc
• Subject: Analysis / Cancer / Cancer therapies / Capitation / Chemotherapy / Cost control / Drugs / Economic aspects / Generalized linear models / Medicare / Oncology / Patients