Opportunities for Savings in Risk Arrangements for Oncologic Care

Abstract

ImportanceAs the US accelerates adoption of alternative payment through global payment models such as Accountable Care Organizations (ACOs) or Medicare Advantage (MA), high spending for cancer care is a potential target for savings.ObjectiveTo quantify the extent to which ACOs and other risk-bearing organizations operating in a specific geographic area (hospital referral region [HRR]) could achieve savings by steering patients to efficient medical oncology practices.Design, Setting, and ParticipantsThis observational study included serial cross-sections of Medicare beneficiaries with cancer from 2010 to 2018. Data were analyzed from August 2021 to March 2023.Main Outcomes and MeasuresTotal spending and spending by category in the 1-year period following an index visit for a patient with newly diagnosed (incident) or poor-prognosis cancer.ResultsThe incident cohort included 1 309 825 patients with a mean age of 74.0 years; the most common cancer types were breast (21.4%), lung (16.7%), and colorectal cancer (10.0%). The poor prognosis cohort included 1 429 973 (mean age, 72.7 years); the most common cancer types were lung (26.6%), lymphoma (11.7%), and leukemia (7.3%). Options for steering varied across markets; the top quartile market had 10 or more oncology practices, but the bottom quartile had 3 or fewer oncology practices. Total spending (including Medicare Part D) in the incident cohort increased from a mean of $57 314 in 2009 to 2010 to $66 028 in 2016 to 2017. Within markets, total spending for practices in the highest spending quartile was 19% higher than in the lowest quartile. Hospital spending was the single largest component of spending in both time periods ($20 390 and $19 718, respectively) followed by Part B (infused) chemotherapy ($8022 and $11 699). Correlations in practice-level spending between the first-year (2009) and second-year (2010) spending were high (>0.90 in all categories with most >0.98), but these attenuated over time.Conclusions and RelevanceThese results suggest there may be opportunities for ACOs and other risk-bearing organizations to select or drive referrals to lower-spending oncology practices in many local markets.