The New Economics of Radiation Oncology

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 - Radiation Oncology Concept

Radiation oncology seems to have a massive target on its collective back. The costs of all cancer treatments face increasing scrutiny. Treatment costs for the 1.6 million Americans diagnosed with cancer in 2013 will gobble at least 5 percent of healthcare spending in the U.S., Ezekiel J. Emanuel, MD, chair of the department of medical ethics and health policy at the University of Pennsylvania, wrote in a New York Times blog “A Plan to Fix Cancer Care” on March 23. Demographics presage an expanding problem; by 2030, more than 70 percent of cancer diagnoses will be made in persons eligible for Medicare.

Exacerbating the issue is the lack of a link between treatment and outcomes in some cases. A study published March 12 in Journal of the National Cancer Institute found no link between Medicare spending on advanced cancer and survival. “Most new advanced cancer therapies provide survival gains of weeks to months, and many are associated with high costs … improving the value of medical spending for advanced cancer is increasingly recognized as a priority,” wrote Gabriel A. Brooks, MD, of Dana-Farber Cancer Institute in Boston and colleagues.  

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Meanwhile, the radiation oncology specialty was pegged as an absolute outlier in a perspective published Dec. 21, 2011, in the New England Journal of Medicine, which observed that the specialty was the top offender for exceeding the sustainable growth rate (SGR) target. Its excess expenditures from 2003 to 2009 as a percentage of 2002 expenditures hovered in the 300 percent range.

These figures, coupled with the looming specter of fiscal fiasco in healthcare, spiraled into the Center for Medicare and Medicaid Services’ (CMS) July 30 proposal to cut radiation oncology services 15 percent and radiation therapy payments 19 percent in the Medicare Physician Fee Schedule as of January 1. American Society for Radiation Oncology (ASTRO) Chairman Michael L. Steinberg, MD, chair of radiation oncology at the David Geffen School of Medicine at University of California, Los Angeles, has described the cuts as draconian and potentially catastrophic for patients and the specialty.

Catastrophe may have been averted in the final cuts, which totaled 7 percent for radiation oncology and 9 percent for radiation therapy. But these figures may represent a pyrrhic victory and could funnel attention away from the real issue. “Medicare cuts aren’t the issue, value is,” Steinberg asserts.

The SGR does not exist in a vacuum. The U.S. healthcare system is in the midst of a fundamental shift from a fragmented fee-for-service delivery system to one that rewards accountability, quality, safety and value. Key players have been nudged into action and developed new ideas and possible solutions. Translating these notions into practice is a work-in-progress that could offer a blueprint for healthcare stakeholders across the board.

From 2013 to 2015

Radiation oncology shouldn’t get too lost in the issue of Medicare cuts, cautions Steinberg, explaining that the funds re-allocated from radiation oncology and other specialties were used to bolster primary care initiatives. The Medicare cuts are “the right side of policy,” he says. The cuts are a near-term issue, while the transition to a value-based model is farther on the horizon.

Another point to ponder, according to Arthur L. Kellerman, MD, chair in policy analysis at RAND, is that future cuts do not need to be excised from physicians’ wallets. Annual spending on waste checked in at $750 billion in 2009, estimated the Institute of Medicine in “Best Care At Lower Cost: The Path to Continuously Learning Health Care In America,” released in September 2012. If wasteful spending can be curbed and physicians engaged to deliver the best care at the lowest cost, the transition from fee-for-service to value-based care may not be entirely painful.

Although the transition may not represent a complete fiscal wipeout for specialists, the shift will require a Herculean effort. Many proposed plans target 2015 for implementation, but the groundwork begins now.

ASTRO on March 29 announced the first step of a comprehensive payment reform effort with a proposal to revise numerous radiation