Reimbursement Models Force Oncologists to Balance Clinical and Financial Risk

Andrew L. Pecora, MD

Editor-in-Chief of Oncology Business Management

Chief Innovations Officer, Professor, and Vice President of Cancer Services John Theurer Cancer Center at Hackensack University Medical Center

President, Regional Cancer Care Associates, LLC

I would like to begin by expressing my excitement about my new position as editor-in-chief of Oncology Business Management, where I will do my best to keep you abreast of the rapidly evolving oncology business marketplace. I previously served as editor-in-chief of Oncology & Biotech News, where I was able to share with readers my greatest passion: translational science and medicine.

I found, however, that I was compelled to delve into the economics and politics of not just oncology, but health care, during my tenure at Oncology & Biotech News, because of the dramatic and rapid changes in cost and reimbursement of oncology care. I was struck by the simple yet profoundly important question facing all involved in oncology health care delivery: If fee-for-service medicine is to be replaced by some form of financial at risk model (ie, oncology bundles), how do we (in a practical and executable manner) place the providers at financial risk (currently thought to be the best way to reduce cost) without placing the patients at clinical risk?

To answer this straightforward question, a number of complex and interrelated business issues will need to be addressed. It is with this in mind that I am motivated to contribute to the dialogue and highlight for you in our 6 issues this year the various current topics in oncology business management.

I know it is difficult for most practicing oncologists to seriously address these issues and at the same time keep current with all of the exciting innovations in oncology diagnostics and therapeutics. Few oncologists have the formal business training required to fundamentally understand the issues and implications surrounding reimbursement changes and how best to transform our existing business model to meet the new reality.

Many of us rely on consultants and employees, but it remains important that the key business principles underlying the ongoing changes be highlighted and presented to oncologists in a concise and meaningful format. Our goal is to cover as broad as possible an array of topics over the next year in order to prepare practices for change. Topics will include oncology at risk bundle creation and contracting, keys to successful payer contracts, the value of group purchasing organizations, oncology drug reimbursement, retirement planning, and outcome tracking and analysis, to name a few.

It has been over 40 years since President Nixon declared “war” on cancer. The parallel advancements in life and computational science over this period have torn the top off the black box that enveloped cancer in 1971. As we peer in, the discovery of new diagnostic tests and effective therapeutic agents are leaping out, leading to meaningful and more targeted (personalized) approaches resulting in prolongation of survival.

This effort has affected the economics of health care in unforeseen ways. People living longer with cancer, fewer people succumbing to other diseases (ie, cardiovascular), and the dramatic increase in the cost of therapy now threaten the very successes achieved over the past 40 years. Together we will journey into the business dialogue affecting cancer care delivery and hopefully, just as we undid one black box, we will undo another.