Pathways to Affordability: Value-Based Care, Value-Based Insurance Design for Patients With Cancer

In an interview with Pharmacy Times® at the Community Oncology Alliance (COA) 2024 Payer Exchange, Mark Fendrick, MD, professor of primary care providers at the University of Michigan, discusses value-based care (VBC) and value-based insurance design (VBID) and how they can be used to optimize care for patients with cancer.

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Pharmacy Times: Can you speak to the financial toxicity experienced by of patients with cancer (I.e. deductibles, out of pocket costs, etc)?

Mark Fendrick, MD: Americans are being asked to pay more for health care, whether it be high value or low value, and particularly the growth of deductibles a blunt instrument that makes Americans pay more for all care, whether it be the care I beg my patients to get or the care that the evidence is not very strong for health benefit is leading to a reduction in all services the out of pocket cost dilemma, or cost related non adherence, is particularly problematic in underserved populations, such as black and brown communities or those who live in rural areas, or particularly those who are financially vulnerable. So, we've been working for decades to try to make plans implement what we would call smarter deductibles in making those services that I beg my patients to do, make them deductible exempt. Make them similar to the preventive care provision of the Affordable Care Act that says these services are such high value that patients should not have to have a bake sale, or, in the case of cancer, have to start an online fundraiser to afford a drug that may save their life.

Pharmacy Times: Can you explain VBID and its impact in oncology care?

Fendrick: My colleague, Michael Chernow, now at Harvard Medical School, and I came up with the idea of value-insurance design in the late 1990s as opposed to the typical health plan that sets consumer cost sharing on the cost of the service, such that low-cost interventions are low cost to patients, and high-cost services are high cost to patients. We kind of flip that over and set consumer cost sharing based on the clinical benefit, such that the highest value services in terms of patient's health are low cost or free, and the services that patients may not need or have been shown to be of no or low value by guidelines or professional societies. Those should be the patient those should be the services for which out of pocket costs should be high.

Pharmacy Times: How are VBID models affecting patient access to cancer care, particularly for high-cost treatments like immunotherapy or CAR-T?

Fendrick: The role of [VBID] in cancer extends the entire journey. I'd like to think that we've been equally impactful in screening and prevention as we have been in treatment. But one of our greatest accomplishments is the preventive services provision of the Affordable Care Act that mandates that screening for breast, cervical, colorectal and lung cancer are covered first dollar, meaning patients don't have to pay anything out of pocket. That has not been the case for diagnostic follow ups for diagnosis, and certainly has not been the case for treatment. We are really happy to know that starting January 2025 that in the Medicare program, patients will have a $2000 annual out of pocket maximum for their Part D drugs. This will impact millions of patients, particularly those who are currently paying lots of money out of pocket costs for their cancer therapies.

Pharmacy Times: What are the key challenges health plans face when implementing value-based care?

Fendrick: I wish the implementation [VBC] in general and [VBID] was a little bit easier. The main issue is what we call clinical nuance, in the fact that a service can be high value in one patient and the same service be very low value in another. So, we need clinical experts like those here at the COA payer summit who are able to actually determine those specific individuals or clinical scenarios where a particular service is high value, and those would be the situations where a V bid program would make it easy, not hard, to get those services. Same holds true for, say, something like a colonoscopy in an 85-year-old where the US Preventive Services Task Force says this shouldn't be done. Not only should cost sharing be high, but clinicians should be held accountable for giving up those very scarce colonoscopy spots for someone who's not benefiting while there are millions of people waiting in the backlog to get high value screening.

Pharmacy Times: How can payers work with providers to ensure that value-based care initiatives lead to improved patient outcomes?

Fendrick: It all comes down to something I've been saying for a very long time, which is, I don't think we need to spend anything more than $5 trillion with a “T” on health care in the US. The problem is we just spend a lot of that, billions of dollars, on the wrong services, on the wrong people at the wrong places and at the wrong times. And what we really need to do is to have the payers in the clinical community come together and buy more of the good stuff and less of the bad stuff. Because when people ask me, “are we spending too much or too little on oncology care?” I can't answer that question until you tell me what we're buying. So many of the services that we deem to be quality metrics in oncology are substantially underused, particularly for rare cancers, and the problem is that to buy more of those services cost money and. And we don't want to raise premiums on everyone. We certainly don't raise cost sharing on other high value services. So, it really comes down to having the courage to be accountable for reducing those services that we really shouldn't be buying, even if they were free.

Pharmacy Times: Can you shed some light on the role of Medicare in value-based care?

Fendrick: Well, there's a lot going on in Medicare on the payment side. In the world of [VBID], we tend to focus on those interventions that impact patients directly. So, the Inflation Reduction Act, there's a lot of people talking about drug price negotiation, but I think it would be important for people to learn about where the action really is regarding patients out of pocket costs. Because, as I like to say, Americans don't care about drug costs. They care about what it costs them. So, there are 3 really important elements of the Inflation Reduction Act in addition to drug price negotiation that will have these elements will have an important positive impact on patients. First, the removal of cost sharing for all Part D administered vaccines like shingle shots, they now must be covered 100% for all Medicare Part D beneficiaries. Second, which is a little better well known, is the $35 a month insulin copay cap, and that has been very widely received and impacts a lot of patients already, but most importantly is the $2000 out of pocket maximum, which takes place January 1 of next year, 2025 and in addition to putting a limit on what patients will pay out of pocket for their Part D drugs, there's a less known and important element to some patients, which is called the Medicare Prescription payment plan, or smoothing in the fact that some people don't have $2000 to put out for their cancer drug on January 3, the option to be able to put a payment plan in place to smooth that $2000 a year over the entire calendar, I think, will be very beneficial, particularly for the patients I worry the most about.

Pharmacy Times: What do you see as the future of value-based care and VBID in oncology?

Fendrick: Well, people call me “Tigger in the 100 Acre Wood.” I'm always optimistic that people will come around to the fact that we can't give all services to all people at no cost to them, and that we need to increasingly focus on understanding the services that provide the most clinical benefit for the buck, particularly those that reduce well known disparities in race and income and geography, and it is my hope that we continue to inch forward to spend more on the good stuff and less of the bad stuff. And most importantly, that instead of just focusing on how much we spend, that will ultimately turn our attention to how well we spend. Because in this Olympic year, we win the gold medal for spending, but we don't make the podium in terms of health outcomes. So, for the money we're spending, we could do better. And I think [VBC], value-based payment and [VBID] may, and hopefully will be an important part of that progress from volume to value perfect.