With an eye on reducing health care costs and improving patient outcomes, health plan Florida Blue is teaming with health care providers Baptist Health South Florida and Advanced Medical Specialties to create an oncology accountable care organization (ACO).

Launched May 1, “this new delivery of care model…shifts toward a value-based reimbursement while improving the overall quality of care to Florida Blue members,” says Jonathan Gavras, M.D., chief medical officer and senior vice president at Florida Blue, the new name of Blue Cross Blue Shield of Florida.

“To address the current cost anWith an eye on reducing health care costs and improving patient outcomes, health plan Florida Blue is teaming with health care providers Baptist Health South Florida and Advanced Medical Specialties to create an oncology accountable care organization (ACO).

Launched May 1, “this new delivery of care model…shifts toward a value-based reimbursement while improving the overall quality of care to Florida Blue members,” says Jonathan Gavras, M.D., chief medical officer and senior vice president at Florida Blue, the new name of Blue Cross Blue Shield of Florida.

“To address the current cost and fragmentation of health care, health care organizations must create new models of care that deliver the highest quality of care while reducing the cost burden for all stakeholders,” maintains Gavras. “This Cancer Care Program is an important step toward that goal. The health care industry as a whole must look beyond the fee-for-service model. This latest model for delivering services offers doctors and hospitals financial incentives to provide good quality care while keeping down costs.”

Because ACOs require multiple groups to provide coordinated care, “the partners need to be experienced enough and cooperative enough to work together,” maintains Bill Sullivan, principal consultant at Specialty Pharmacy Solutions LLC. “Florida Blue likely saw those attributes in both Baptist Health South Florida and Advanced Medical Specialties. AMS’s geographic coverage also well complements Baptist’s service area.”

According to Gavras, “Florida Blue has strong working relationships with” Baptist Health South Florida, a health system, and Advanced Medical Specialties, an oncology practice with 17 locations in South Florida. “Most recently, Florida Blue had been working closely with Advanced Medical Specialties surrounding cancer care for our members, while at the same time Advanced Medical Specialties had been working closely with Baptist Health South Florida,” explains Gavras. “So it made sense to all of us to come together to try to identify ways to improve the quality of care and overall positive outcomes for members in South Florida.”

The focus on oncology was a no-brainer considering that “12 million people worldwide receive a cancer diagnosis each year, with an associated price tag of $286 billion in medical costs and lost productivity,” says Gavras. “By 2030, that number is estimated to increase to 22 million people each year, with a comparable rise in costs. More than half of the cost is attributable to medical care, according to a report in The Lancet Oncology.”

Gavras says that “16% of the total Florida Blue medical expense is related to cancer care.”

“Certain specialties lend themselves to this” type of arrangement, says William DeMarco, president of Pendulum HealthCare Development Corp., and “certain specialties don’t.” For instance, “I don’t know how you’d package” hematology services, he says, but he points out that OB/GYN services were packaged under a bundled payment in the 1970s.

“The fact that this is an oncology ACO is not surprising,” contends Sullivan. “In fact it makes sense to break oncology out as a separate category given its costs and some unpredictability of the severity of cases that will be managed, especially in the first year when this ACO is likely to be looking to figure out the best ways to manage and try to hit their cost targets.”

According to F. Randy Vogenberg, Ph.D., a principal with the Institute for Integrated Healthcare, “Focusing on cancer, which is now highly guideline driven, also minimizes variation in care,” which can help produce “better economic and clinical outcomes.”

Gavras explains that “Advanced Medical Specialties, as an affiliate of US Oncology, follows US Oncology Level I Pathways. However, this program is not specifically focused on pathways. The Accountable Cancer Care Program is focused on improved care coordination, care quality and shared savings.”

Interest Grows in Guidelines, Pathways

More health plans lately have been working with physicians who are following guidelines or pathways in oncology care and offering reimbursement based on the providers’ compliance levels. For example, United Healthcare (UHC) unveiled a pilot program in 2010 that focused on breast, lung and colon cancer with regimens for 19 different presentations (SPN 11/10, p. 1). It originally worked with five large medical groups, each of which chose the regimen it felt was the best clinical approach.

UHC pays the drug margin for each regimen — determined by subtracting the average sales price from the group’s usual reimbursement — along with a case management fee and also pays the group for an episode time period. To assess value, UHC and the participating physicians use 60 measures, which were determined through UHC discussions with all five groups early in the process. Results of the pilot are expected this summer.

Third-party groups like P4 Pathways — which offers pathways in certain cancers and rheumatoid arthritis — and PathForward Oncology, which uses the Via Oncology pathways developed by the University of Pittsburgh Medical Center (SPN 2/11, p. 1), offer pathways developed by physicians. P4 launched its oncology pathways program with CareFirst, and in its first year, that program saved CareFirst $8.5 million, which was 8% of its oncology costs (SPN 2/10, p. 6).

Sullivan says that “in many ways oncology is very predictable. As we’ve learned recently, pathways are very specific. Based on diagnosis, they can tell you down to the number of days and strengths of doses for each cycle of therapy (which drives a significant portion of total costs). Pathways also help identify when patients start to incur more acute costs (hospital vs. office), and that helps complete the cost picture. As noted earlier, what you can’t predict is the mix of patients (i.e., how many breast vs. liver vs. colon, etc. and at what stage of severity). Nonetheless, the number crunchers that work in this segment can make some fairly good estimates to develop a budget — so an ACO specifically for oncology does make sense.”

DeMarco, who is working on two similar oncology bundled payment projects, says that cancers can be stratified first by their stage — I, II, III or IV — and then by factors such as the person’s age and any other comorbidities and complications, and finally next treatment protocol and expected outcomes. Stage IV, for instance, “factors in hospice” and patient support groups, among other things. “It can be very intense at this point,” he says.

Considering numerous measures within these four stages can help categorize patients so apples-to-apples comparisons may be made in terms of treatment, outcomes and costs, says DeMarco. Once the clinical stages are determined, then the financial expectations can be as well.

“It is not unexpected to see this type of a care delivery strategy married with economic incentives to deal with the global reimbursement generally offered by insurers today,” contends Vogenberg.

The Florida Blue ACO is “focusing on the six most common forms of cancer that represent 80% of cancer types in South Florida,” Gavras tells SPN. “These include leukemia/lymphoma, breast cancer, lung cancer, colorectal cancer, male genitourinary (including prostate) and female genitourinary.” In addition, “This agreement includes all services, except particular services that are definitively unrelated to cancer care.”

When it comes to cancer medications, “The supply chain that’s in place for oncology-related drugs between pharmacies, providers and Florida Blue will remain intact. However, the costs for provider-administered drugs are included in the measurement for this program,” Gavras says.

Making sure the collaboration is truly delivering value will be important to demonstrate. To that end, he says, “in addition to efficiency metrics, the program will measure provider performance on several mutually identified and agreed upon, industry standard quality metrics.”

In terms of the overall value of the ACO, “Florida Blue views these programs as incremental in nature,” says Gavras. “As such, Florida Blue, Baptist South Florida and AMS will jointly evaluate the program using the above referenced metrics as well as additional components such as the overall patient experience and the program’s ability to deliver foundational capabilities for future models.”

Asked for details of how the savings will be shared, Gavras says “the details surrounding the shared savings are protected under the agreement between the parties.”

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