Current Trends in
Oncology Management
This Current Trends in Oncology Management report was derived from an independent study undertaken by The Zitter Group, a
managed care consulting firm specializing in market research
ON82332 01/2013 Lilly USA, LLC
2 Third Edition – January, 2013
Overview
End-of-Life Care
Prior Authorizations
Reimbursement Dynamics
Outline
3 Third Edition – January, 2013
• Research Objectives • Understand selected changes underway in oncology and payer management of the category
• Examine possible implications for payers, oncology practices, and manufacturers
• Highlight views and opinions about the managed care and oncology practice environments
• Research Methodology • An independent study undertaken semiannually by The Zitter Group, a managed care consulting firm
that specializes in market research
• The Zitter Group’s study in oncology has been conducted since December 2006
• The research entails concurrent Web-based quantitative surveys with 3 arms: managed care executives (payers), oncologists, and practice managers
– Payer sample comprised of 101 managed care decision makers from large national and important regional
and independent health plans representing 154.3 million covered lives
– Oncologist sample comprised of 100 oncologists from a variety of practice groups across the country
– Practice manager sample comprised of 100 managers from a variety of practice groups across the country
• The study asked survey participants to respond to questions regarding their commercial business only
• Research was fielded between January 6, 2012, and February 29, 2012
• Standard statistical methods were applied to evaluate differences among stakeholder groups and between current and prior survey data
Managed Care Oncology Index: Overview
4 Third Edition – January, 2013
Overview
End-of-Life Care
Prior Authorizations
Reimbursement Dynamics
Outline
5 Third Edition – January, 2013
Does your organization provide coverage for hospice care?
Hospice Care Coverage
At what point in disease progression does your organization provide coverage for hospice care?
Patient must have ______ months or fewer to live, should the disease run its expected course
Payers n = 101
Mean (of those with a time limit) = 5.6 months
Yes 90%
No 4%
Unsure 6%
Percentage of Payers
Months % Payers Number of Payers
6 56% 42 respondents
3 3% 2 respondents
2 3% 2 respondents
1 1% 1 respondent
No limit 37% 28 respondents
Unsure NA 16 respondents
6 Third Edition – January, 2013
Payer Communication of Hospice Care
What types of communication efforts does your organization make to educate patients about hospice as an end-of-life care option? Please select all that apply
A communication effort implies any manner by which you convey information to the intended audience, eg, print, electronic, telephone, etc.
9%
10%
13%
18%
38%
48% Physician communication efforts
Patient-specific, targeted communication efforts
Not applicable, we do not make any communication efforts
Other
Communication efforts to members of targeted demographics (eg, all members
over 65), but not to specific patients
Unsure
Percentage of Payers
Payers n = 91
Payer “Other" Responses: Case Managers (8); We will respond to member requests for information or guidance, but do not initiate; Hospice included in cancer info kit now sent out regularly; Developing program to increase capacity to deliver
7 Third Edition – January, 2013
Physicians and patients often define "successful
treatment" differently
Payers
Oncologists
Practice Managers
Increasing hospice utilization would be an
effective way to manage oncology costs
Payers
Oncologists
Practice Managers
Hospice is most effective when the patient is
enrolled for an extended period of time (more than
3 weeks)
Payers
Oncologists
Practice Managers
16%
17%
8%
18%
7%
10%
66%
69%
66%
62%
70%
91%
80%
76%
91%
Hospice / End-of-Life Care: Stakeholder Comparison
Please tell us whether you strongly disagree, somewhat disagree, are neutral, somewhat agree, or strongly agree with each of the statements below
Somewhat disagree or Strongly disagree Somewhat agree or Strongly agree Mean
4.39*^
3.88*
4.12^
4.35*^
3.86*
3.65^
3.93
3.88
3.88
Payers n = 101 Oncologists n = 100 Practice Managers n = 100
*^ Significant difference between stakeholders
Percentage of Respondents
1%
3%
3%
8 Third Edition – January, 2013
Please tell us whether you strongly disagree, somewhat disagree, are neutral, somewhat agree, or strongly agree with each of the statements below
Physicians view hospice utilization as a
failure or defeat
Payers
Oncologists
Practice Managers
There are significant barriers to increasing
hospice utilization
Payers
Oncologists
Practice Managers
Hospice / end-of-life programs are utilized at
appropriate levels
Payers
Oncologists
Practice Managers 50%
57%
75%
27%
30%
29%
60%
39%
22%
42%
31%
17%
44%
49%
50%
29%
38%
56% 3.37*^ #
2.86*^ #
2.50*^ #
3.25
3.14
3.20
2.11*^
2.66*
2.84^
Payers n = 101 Oncologists n = 100 Practice Managers n = 100
*^ # Significant difference between stakeholders
Percentage of Respondents
Somewhat disagree or Strongly disagree Somewhat agree or Strongly agree Mean
Hospice / End-of-Life Care: Stakeholder Comparison
9 Third Edition – January, 2013
Hospice / End-of-Life Care: Payer Trend
Yes, 41% of Practice
Managers
No, 50%
Yes, 41% of Practice
Managers
No, 50%
2.25
3.55
3.41
3.80
3.87
4.24
2.11
3.25
3.37
3.93
4.35
4.39
Winter 2012
Summer 2008
Physicians and patients often define "successful treatment" differently
Increasing hospice utilization would be an effective way to manage oncology costs
Hospice is most effective when the patient is enrolled for an extended period of time (more than 3 weeks)
Physicians view hospice utilization as a failure or defeat
There are significant barriers to increasing hospice utilization
Hospice / end-of-life programs are utilized at appropriate levels
1 Strongly disagree
3 5 Strongly agree Mean Respondent Score
Winter 2012 n = 101 Summer 2008 n = 103
Please tell us whether you strongly disagree, somewhat disagree, are neutral, somewhat agree, or strongly agree with each of the statements below
10 Third Edition – January, 2013
Hospice End-of-Life Care Refusal
What are the potential reasons for underutilization of hospice care? Please select all that apply
Asked only of respondents who Strongly disagreed or Somewhat disagreed that hospice programs are utilized at appropriate levels
2%*
2%
32%^
14%
16%^
86%
78%
11%
0%
40%*
18%
33%*^
91%
74%*
18%*
0%
7%*^
13%
18%*
88%
89%*
Payers n = 76
Oncologists n = 57
Practice Managers n = 50
Physician reluctance
Patient refusal
Limited availability / patient access
Poor quality of hospice care
Lack of payer coverage
There is no underutilization of hospice care, only overutilization
Other
Payer “Other” Responses: family issues (6); lack of physician education to patients (2); ignorance of true benefits (1); misunderstanding the role of hospice (1); negative perceptions of hospice care (1); payment associated with it is much less than chemotherapy (1); physician comfort in having the conversation is the biggest issue (1); patients feel that they will be provided with no therapy (1); Oncologists “Other” Responses: family issues (2); hospice no longer hospice (1); need for palliative procedures (1); profit motive to continue treatment (1); when a patient signs up for hospice, lose oncologists and physicians (1)
Percentage of Respondents *^ Significant difference between stakeholders
11 Third Edition – January, 2013
Drivers of Excess Cost: Stakeholder Comparison
What percentage of excess cost in oncology care does each of the following factors contribute? Please consider excess cost in terms of the entire care delivery system (systemic costs), not
just in terms of costs at your own organization
1%
28%*^ #
17%
6%
8%
13%
9%
17%*
3%
15%*^ #
17%
4%
7%
9%
15%
30%
0%
5%*^ #
8%
8%
12%
13%
20%
35%*
Payers
Oncologists
Practice Managers
Excessive therapeutic end-of-life treatment
Inappropriate drug utilization (eg, off-label, off-pathway, or off-guideline use)
Sub-optimal distribution of prescription drugs (eg, buy-and-bill versus specialty pharmacy)
Sub-optimal selection of sites-of-care
Excessive physician payments (for professional services only, independent of drug reimbursement)
Excessive diagnostic testing
Utilization management administrative requirements (eg, those for prior authorization)
Other
Payers n = 97 Oncologists n = 100 Practice Managers n = 95
Percentage of Excess Cost *^ # Significant difference between stakeholders
12 Third Edition – January, 2013
Summary of Findings: End-of-Life Care
• Most payers provide for end-of-life coverage, with payers divided between capping care for patients with less than 6 months to live and payer organizations having no stipulations tied to life expectancy
• All 3 stakeholders agree that “increasing hospice utilization would be an
effective way to manage oncology costs.” Payers are significantly more supportive of the statement than oncologists and practice managers
• Payers believe strongly that hospice/end-of-life programs are not being utilized at sufficient levels
• All stakeholders view “excessive therapeutic end-of-life treatment” as a major driver of excess cost
13 Third Edition – January, 2013
Overview
End-of-Life Care
Prior Authorizations
Reimbursement Dynamics
Outline
14 Third Edition – January, 2013
Payer Therapy Management Tools Trend
Which of the following tools have been applied to manage cancer therapies?
33%
37%
42%
42%
53%
53%
77%
44%
85%
36%
40%
40%
43%
54%
65%
66%
67%
88%
Winter 2012
Winter 2011
Prior authorization
Tying drug approval to diagnostic tests / biomarkers
Compendia listing guideline requirements
Quantity limits
Specific lab or diagnostic values
Step edits
Published study requirements
Clinical treatment pathways
Required drug distribution through a third-party vendor (eg, SPP, PBM)
Significant increase from Winter 2011 report
Percentage of Payers
Winter 2012 n = 101 Winter 2011 n = 103
15 Third Edition – January, 2013
Prior Authorization Requirements
Payers n = 79
a
Please rank in descending order the influence of each of the following factors in determining your prior authorization requirements, where 1
is the most influential
Factor Average Ranking
FDA labels 2.56
NCCN compendia listings / NCCN guidelines 2.76
State mandates 4.82
CMS coverage decisions 5.56
ASCO guidelines 5.59
Peer-reviewed scientific literature 6.26
AHFS compendia listings 7.68
AHRQ / CERTs reports 8.79
Internal oncology experts 8.88
DrugDex compendia listings 9.03
Input from network oncologists 9.15
Internally developed pathways 9.88
Externally developed pathways 10.15
Do the factors that influence your organization's determination of prior authorization requirements vary by cancer subtype?
43%
51%
6%
Unsure
No
Yes
Payers n = 34
16 Third Edition – January, 2013
Prior Authorization Requirements
What is typically required by commercial payers to approve coverage of the products / therapies subject to prior authorization?
2%
3%
11%
28%
43%
52%
30%
81%
2%
2%
15%
40%
50%
57%
32%
85%
0%
5%
11%
36%
49%
55%*
56%*
98%
Winter 2012 n = 85
Summer 2011 n = 100
Winter 2011 n = 103
2%
10%
13%
18%
66%
34%
52%
93%
0%
12%
13%
19%
73%
33%
68%
95%
0%
3%
17%
25%
43%
78%*
77%*
97%
Winter 2012 n = 92
Summer 2011 n = 100
Winter 2011 n = 101
Diagnosis
Specific lab or diagnostic values
Statement of medical necessity from the physician
Compendia listings/guidelines
Published studies
Genetic testing
Other
None
Percentage of Oncologists Percentage of Practice Managers
Significant increase from Summer 2011 report Significant decrease from Summer 2011 report
*Significant difference between stakeholders
Oncologist Perspective Practice Manager Perspective
17 Third Edition – January, 2013
Prior Authorization Frequency
How frequently do commercial payers require prior authorization for oncology therapies?
Oncologist Perspective
10% or fewer treatment requests
11% - 30% of treatment requests
31% - 50% of treatment requests
51% - 70% of treatment requests
71% - 90% of treatment requests
More than 90% of treatment requests
Unsure
Percentage of Oncologists Percentage of Practice Managers
11%
10%
24%
15%
15%
19%*
6%
13%
17%
12%*
22%
18%
13%
5%
14%
10%*
16%*
8%
15%
29%*
7%
Winter 2012 n = 100
Summer 2011 n = 100
Winter 2011 n = 103 7%
14%
23%
24%
22%
9%*
1%
6%
19%
24%*
20%
22%
7%
2%
8%
20%*
31%*
12%
17%
10%*
2%
Winter 2012 n = 100
Summer 2011 n = 100
Winter 2011 n = 101
Significant increase from Summer 2011 report Significant decrease from Summer 2011 report
*Significant difference between stakeholders
Practice Manager Perspective
18 Third Edition – January, 2013
Prior Authorization Completions
How long do you think it takes your office, on average, to process a typical oncology prior authorization?
< 10 min, 0%
10 - 19 min, 5%
20 - 29 min, 15%
30 - 39 min, 26%
40 - 49 min, 20%
50 - 59 min, 0%
60 - 69 min, 23%
> 70 min, 12%
< 10 min, 0%
10 - 19 min, 19%
20 - 29 min, 24%
30 - 39 min, 21%
40 - 49 min, 7%
50 - 59 min, 0%
60 - 69 min, 13%
> 70 min, 15%
Oncologist Perspective n = 85 Mean: 56 minutes
Unsure n = 17 Summer 2011 Mean: 47 minutes
Practice Manager Perspective n = 86 Mean: 48 minutes
Unsure n = 6 Summer 2011 Mean: 41 minutes
19 Third Edition – January, 2013
Prior Authorization Impact on Prescribing Behavior
To what extent do prior authorizations impact prescribing behavior?
26%
38%
40%
36%
34%
31%
41%
42%
40%
31%
19%
23% 2.86
2.72
2.88
3.19
Mean
Percentage of Oncologists
No significant changes between editions Oncologists Winter 2012 n = 100 Oncologists Summer 2011 n = 100 Oncologists Winter 2011 n = 103 Oncologists Summer 2010 n = 100
Winter 2012
Summer 2011
Winter 2011
Summer 2010
No impact (1) or Limited impact Some impact (3) Meaningful impact (4) or Significant impact (5)
20 Third Edition – January, 2013
Summary of Findings: Prior Authorizations
• Payers most commonly utilize “prior authorizations,” “diagnostic tests or biomarkers,” and “compendia listing guideline requirements” to manage oncology costs
• The majority of practice managers report that commercial payers require prior authorizations for more than 50% of treatment requests, with little change observed relative to past years
• Forty-three percent of payers note that determination of prior authorization requirements vary by cancer subtype, with FDA labels most influential in determining prior authorization requirements
• Over the past 18 months, oncologists report a diminished impact of prior authorizations on their prescribing behavior
21 Third Edition – January, 2013
Overview
End-of-Life Care
Prior Authorizations
Reimbursement Dynamics
Outline
22 Third Edition – January, 2013
Pay-for-Outcomes (P4O) Components
5%
7%
21%
29%
21%
17%
Unsure
Will not be implemented within the next 12-18 months Unlikely to be implemented within the next 12-18 months Likely to be implemented within the next 12-18 months Will be implemented within the next 12-18 months Already implemented
In which of these cancer subtypes have you implemented or will you be implementing a pay-for-outcomes (P4O) component to physician
reimbursement? Please select all that apply
83% 75%
58% 58%
33% 33% 33%
25% 25%
17% 17% 17% 17% 17% 17% 17% 17% 17% 17%
Breast Colon and Rectal
Lung Prostate
Hodgkin disease Melanoma
Non-Hodgkin lymphoma Chronic lymphocytic leukemia
Kidney (renal cell) Bladder
Chronic myeloid leukemia Endometrial
Gastrointestinal stromal tumor (GIST)
Head / Neck Liver
Multiple myeloma Ovarian
Pancreatic Thyroid Percentage of Payers
How likely is your organization to implement a pay-for-outcomes (P4O) component to your oncologists' reimbursement contracts, even if only on a trial or pilot basis?
Payers n = 100
Payers n = 12
23 Third Edition – January, 2013
Formation of Accountable Care Organizations
Please select the following statement that most closely represents your practice’s current plans regarding accountable care organizations (ACOs)
4%
8%
19%
21%
54%
46%
23%
25%
Summer 2011
Winter 2012
Already joined / formed an ACO Intend to join / form an ACO
Have not decided whether or not to join an ACO Do not intend to join / form an ACO
Percentage of Oncologists
Winter 2012 Oncologists n = 100 Summer 2011 Oncologists n = 100
No significant differences between editions
24 Third Edition – January, 2013
Practice Financial Viability: Stakeholder Comparison
Given the progression of oncology management, how would you rate the financial viability of your practice?
Please score your perception of practice viability using a 10-point scale, where 1 indicates “Not at all financially viable” and 10 indicates “Very financially viable”
5%
7%
12%
19%
8%
15%
54%
62%
45%
50%
37%
53%
53%
59%
45%
34%
53%
43%
51%
27%
40%
27%
Low viability (1-3 rating) Moderate viability (4-7 rating) High viability (8-10 rating)
Oncologists
Practice Managers
Oncologists
Practice Managers
Oncologists
Practice Managers
Practice Managers
Oncologists
Winter 2014 (est.) n = 82
Winter 2014 (est.) n = 80
Winter 2013 (est.) n = 73
Winter 2013 (est.) n = 65
Winter 2012 (actual) n = 92
Winter 2012 (actual) n = 95
Winter 2011 (actual) n = 86
Winter 2011 (actual) n = 80
5.95*
6.73*
5.99^
6.85^
6.92
7.39
6.63
7.10
Percentage of Respondents
*^Significant difference between stakeholders
Mean
25 Third Edition – January, 2013
Impact of Payer Management on Practice Consolidation
ASP 58.8% of sample
(-3.7% from Winter 2010)
66.2% of covered lives
(-4.5% from Winter 2010)
ASP 61.2% of sample
AWP 31.1% of sample
Do you believe that tighter oncology management by payers will force smaller oncology practices to consolidate into larger ones?
75%
78%
82%
85%
79%
82%
Strongly disagree (1) or Disagree (2) Believe it (4) or Strongly believe it (5)
Winter 2012 n = 100
Summer 2011 n = 100
Winter 2011 n = 103
Winter 2012 n = 100
Summer 2011 n = 100
Winter 2011 n = 101
Oncologists
Practice Managers
Percentage of Respondents
No significant differences between editions or stakeholders
5%
2%
5%
7%
8%
5%
26 Third Edition – January, 2013
Oncology Practice Consolidation: Payers
Within the past twelve months, how has the consolidation of oncology practices progressed?
A ______ number of oncology practices have consolidated in our coverage area
How has this consolidation been driven by the following stakeholders?
25% 24% 25% 8% 16%
None Minimal Moderate Significant Very Significant Unsure
2
12
12
24
50 Hospital / hospital system acquisition
Larger community oncology practices (10 or more physicians)
Smaller community oncology practices (fewer than 10 physicians)
National / regional oncology practice associations
Other
Average Points Assigned Payers n = 59
Payers n = 100
27 Third Edition – January, 2013
Summary of Findings: Reimbursement Dynamics
• Twelve percent of payers reported that they have implemented or will implement a pay-for-outcomes component to their oncologists’ reimbursement contracts, while half of payers state that they are unlikely or will not be implementing a pay-for-outcomes component as part of contracting in the next 12-18 months
• A majority of practice managers and oncologists believe that tighter oncology management by payers will force smaller oncology practices to consolidate into larger entities
• Over the past 12 months, nearly 60% of payers note that oncology practices have consolidated, with hospital/hospital system acquisitions being the driving force beyond consolidation