Seismic shift in cancer care from physician office setting to hospital outpatient department resulting in dramatically higher patient and payer costs
WASHINGTON – The Alliance for Site Neutral Payment Reform – a coalition formed to address payment parity across sites of service in order to decrease Medicare and commercial spending, lower taxpayer and beneficiary costs and increase patient access – today said a newly released Milliman study adds to the growing arsenal of literature and research illustrating how disparities in healthcare reimbursement across sites of service are leading to increased costs for both patients and payers.
The study, “Cost Drivers of Cancer Care,” which analyzed claims data for the Medicare and commercially insured patient populations from 2004-2014, further uncovers troubling marketplace trends, which underscore the need for advancing public policy reforms that halt the acceleration of consolidation across America’s healthcare delivery system.
A key finding of the Milliman report was that cancer care has moved significantly into the more expensive hospital setting since 2004, which is an important factor of the increase in the cost of care. The report show that per capita spending in oncology is less when patients are treated in a physician office setting versus the hospital outpatient department.
The report also analyzed cost trends in the site of service for chemotherapy infusion and found that the site of service for chemotherapy infusion has dramatically shifted from the physician office to the higher-cost hospital outpatient setting. Milliman data show the proportion of chemotherapy infusions delivered in hospital outpatient departments nearly tripled, increasing from 15.8 percent to 45.9 percent in the Medicare population from 2004 to 2014. Among commercially insured patients, the change was staggering, increasing from 5.8 percent to 45.9 percent.
Milliman found that for 2014, Medicare spending would have been about $2 billion lower if the infused chemotherapy site of service shift had not occurred.
Milliman further concluded that the shift in site of service results in dramatically higher costs for patients. When chemotherapy was delivered entirely in the hospital outpatient setting, patient costs were found to be significantly higher than patients whose chemotherapy was delivered entirely in a physician office. For Medicare patients, the difference was 37 percent higher in 2004 and 34 percent higher in 2014. Among commercially insured patients, it was 25 percent higher in 2004 and 42 percent higher in 2014.
The study was conducted by researchers at the actuarial firm Milliman and commissioned by the Community Oncology Alliance (COA). To view the study in its entirety, click here. To see study highlights, click here.