Winter 2021/2022

The shift from a fee-for-service to a Total Cost of Care model makes its way into oncology care.

In the last decade, the shift in health care delivery away from fee-for-service (FFS) arrangements has resulted in the wide adoption of alternative payment models such as Total Cost of Care (TCOC). TCOC takes into account the entire range of medical care. This considers anything that contributes to the patients’ treatment for a specific population. Such a focus can improve health outcomes through a coordinated system that proactively addresses population health needs. It also controls costs by reducing avoidable, duplicative and inappropriate utilization. Operating within these models, entities and specialties are able to work cooperatively to deliver value-based care. Though TCOC is rapidly being adopted for primary care, it is now also being adopted by specialties, such as oncology.

The cost for oncology care includes more than just the charges associated with drug therapies, and drug costs alone are increasing. Though clinical trial participation can mitigate expensive drug outlays, costs continue to rise significantly due to expensive new therapies and expanded indications. In addition, cancer care costs include a wide variety of charges beyond oncology-related drugs. Radiation oncology is commonly employed in curative and palliative treatment for a variety of cancer diagnoses. Pathology and laboratory testing now have pivotal roles in identifying specific subtypes of malignancies and determining which treatments may work best.

Other ancillary services, including palliative care and patient support services, are central to patients and their families for end-of-life care. Finally, surgery and hospitalizations account for a significant portion of cancer care costs, approximately 35%. These costs will only escalate with poorly managed care. Each area is interdependent, and coordination is imperative during the course of a patient’s cancer journey. Since all these costs can be considered in a TCOC model, it is necessary to register how each dollar is being spent. Collecting, analyzing and reporting cost, outcome and quality data is the engine that drives TCOC models, leading the charge toward wide adoption of value-based care models.

Oncology Care Management

Utilizing oncology care management tools can optimize a TCOC approach. In-patient hospitalization and emergency room (ER) utilization rates are lowered by effective care management protocols, such as identifying palliative care options and clinical trial opportunities with commensurate compassionate use authorization. Effective patient navigation also serves to reduce redundant tests and streamline the care journey which not only improves outcomes but reduces overall costs.

Spotlight: Understanding the Breakdown of Oncology Costs

Coordinating the components that drive TCOC has a significant impact on delivering value-based oncology care. The chart below shows the component makeup for oncology costs based on 2018–2021 claims data and other internal OPN research.

* Drugs administered other than oral method and chemotherapy drugs

Source: OPN Healthcare data and analysis

For further information, please contact:
Adam Goldston (email)
Chief Growth Officer
OPN Healthcare