Transcript Pharmacoeconomics – Can we afford the cancer care of the

Cost vs. Value: Getting Our Money’s
Worth in Cancer Care
Neal J. Meropol, MD
Education Session
Raising the Bar: Setting Standards for Real Progress in
Clinical Trials
American Society of Clinical Oncology Annual Meeting
June 1, 2013
Value and Cost-Effectiveness
• Value = Benefit / Cost
• Cost Effectiveness = Cost / Benefit
– Incremental Cost Effectiveness Ratio (ICER) =
COSTnew - COSTstandard
EFFECTnew - EFFECTstandard
Defining Value
• Survival
• Quality-adjusted survival
• Quality of life
– Symptoms of cancer
– Side effects of treatment
• Cost
Background:
What is the problem?
The US spends ~18% of GDP on healthcare
http://www.pbs.org/newshour/rundown/2012/10/health-costs-how-the-uscompares-with-other-countries.html
National Health Expenditures per Capita,
1960-2010
NHE as a Share of GDP
5.2%
7.2%
9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.1% 16.2% 16.4% 16.8% 17.9% 17.9%
Notes: According to CMS, population is the U.S. Bureau of the Census resident-based population, less armed forces overseas.
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at
http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2010; file nhegdp10.zip).
Per Capita Total Current Health Care Expenditures, U.S.
and Selected Countries, 2009
^OECD estimate.
*Break in series.
Notes: Amounts in U.S.$ Purchasing Power Parity, see http://www.oecd.org/std/ppp; includes only countries over $2,500. OECD defines Total Current
Expenditures on Health as the sum of expenditures on personal health care, preventive and public health services, and health administration and health
insurance; it excludes investment.
Source: Organisation for Economic Co-operation and Development. “OECD Health Data: Health Expenditures and Financing”, OECD Health Statistics Data from
internet subscription database. http://www.oecd-ilibrary.org, data accessed on 01/10/12.
Health Care Expenditures (2009)
vs. Life Expectancy (LE)
LE
81
81
82
82
81
81
81
Distribution of National Health Expenditures,
by Type of Service (in Billions), 2010
NHE Total Expenditures:
$2,593.6 billion
Nursing Care Facilities &
Continuing Care Retirement
Communities, $143.1
(5.5%)
Note: Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment, etc. Other
Health Spending includes, for example, administration and net cost of private health insurance, public health activity, research, and structures
and equipment, etc.
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National
Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service
and source of funds, CY 1960-2010; file nhe2010.zip).
Average Annual Growth Rates for NHE and GDP,
Per Capita, for Selected Time Periods
Projected
Source: Historical data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, January 2012, at
http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2010; file nhegdp10.zip). Projections from
Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, July 2011, “National Health Expenditures 2010-2020,” Table 1,
https://www.cms.gov/NationalHealthExpendData/downloads/proj2010.pdf.
However: annual growth in NHE is decreasing
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services,
Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/
(see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2010; file
nhe2010.zip).
Why is growth in health care
spending moderating?
• The great recession
• Decreased private insurance and Medicare
payments
• Increased cost-sharing
• Improved efficiency – less waste
• Slowdown in new innovations (technology
and drugs)
Cutler and Sahni. Health Aff 2013
Ryu et al. Health Aff 2013
Cost of Cancer Care Factoids
• Total cost
– $124.57 billion in 2010 and $157.77 billion in 2020
(Mariotto et al. JNCI 2011)
• Out-of-pocket burden is high
– 28.8% >10% disposable income spent; 11.4%
>20% spent in 2003 (Banthin et al. JAMA 2006)
• Drug costs comprise a higher percentage of
oncology expenditures than in other disease
Two Known Risk Factors are Increasing
Population is aging
+
Obesity epidemic
= Rising Cancer Burden
Oncology drugs are expensive
Hoffman JM et al. Am J Health-Syst Pharm 2013
Overall, cancer drug expenditure growth is modulating
1.4%
incr.
Hoffman JM et al. Am J Health-Syst Pharm 2013
Why does (should) oncology
command (demand) attention?
• Cancer is life-threatening – access is critical
• Disproportionate impact on insurers, public payers
• Diagnostics and treatments are increasingly
expensive
• We (society, oncologists) have accepted (embraced?)
innovations of limited value
• Oncology represents the greatest opportunity to
leverage advances in science and technology to
improve health
The high cost of cancer care
threatens to increase disparities in
care and outcomes
•
•
•
•
•
Uninsurance
Insurance premiums
Co-pays/co-insurance
Tiered formularies
Part D donut hole
Delay in seeking
treatment
Limit/alter
treatment
Less charity
care
Health Insurance Coverage in the US, 2011
Lack of insurance is associated with late diagnosis
and death from cancer
Patients are
willing to pay
more out-ofpocket for
higher value
treatments
Cure
2-yr
Survival
Median
Survival
Higher WTP
Lower WTP
Wong Y et al. The Oncologist, 2010;15:566-576
Patient Financial State May Drive
Preferences for Adjuvant Therapy
Preference
Low cost
High survival
Low toxicity
Low cost
High survival
Low toxicity
Annual Household income
<$60,000
>$60,000
33.6%
10.7%
55.7%
23.7%
24.4%
52.50%
p-value
0.007
Employment
Not out of
Out of work
work
37.7%
28.9%
3.9%
58.3%
17.7%
53.4%
0.04
Wong Y-N et al. ASCO 2012
Out-of-pocket “burden” is higher with cancer
than other chronic diseases
Bernard D S et al. JCO 2011;29:2821-2826
Out-of-Pocket Cost of Adjuvant Colon Cancer Therapy
Shankaran et al. JCO 2012
Aromatase inhibitor compliance is inversely
associated with co-pay level
Neugut A I et al. JCO 2011;29:2534-2542
Cancer and Bankruptcy
• Linked SEER and bankruptcy data in Washington State,
1995 - 2009
• Cancer patients 2.65X more likely to file for bankruptcy
Ramsey S et al. Health Aff 2013
How do insured patients deal with high
out-of-pocket expenses?
(Zafar et al. The Oncologist, 2013)
• Convenience sample (N=254)
– 190 identified from co-pay assistance program
%
Reduced spending on leisure
68%
Reduced spending on basics
46%
Used savings
46%
Sold possessions
17%
Borrowed or used credit to pay for meds
42%
Did not fill prescription
24%
Filled part of prescription
20%
Took less than prescribed
19%
Purchased OTC meds to replace prescriptions
15%
All cancers are becoming rare cancers
Garraway LA. JCO 2013
The Promise of Precision Medicine:
More Effective and Less Costly Cancer Care
• Avoid treatment of patients unlikely to benefit
• Improve outcomes of those most likely to
benefit
• Identify patients with pathway activation that
might benefit from targeted approaches
Unintended Consequences of
Precision Medicine
• Oncology less attractive for pharma
– Smaller market for rare diseases
– Diagnostics may not command “innovation premium”
– Value depends on cost of diagnostic
• Longer survival = higher societal costs
• Decreased practice efficiency
– Patient education
– Specimen processing, treatment delay
– Payer approval
Unanswered Questions
• Is current drug approval paradigm obsolete?
– Based on histology, requires large studies
• Is current payment paradigm obsolete?
– How to deal with “biologically plausible” treatment
recommendations?
– How to define clinical utility of a genomic screening
diagnostic test?
• Is current clinical trial paradigm obsolete?
– Patient seeks site with drug study vs. study available
on-demand
– Precision medicine requires greater centralization of study
administration, diagnostic infrastructure
What can we do to ensure value and access to
high quality cancer care?
At the Societal Level
• Demand value
• Align incentives to
promote quality
• Support research
• Consider costs and
benefits
• Payment reform, e.g.
– Bundled payments
– Value-based
insurance design
– Pay for care and
outcomes, not
procedures
• Support evidence
development
What can we do to ensure value and access to
high quality cancer care?
• Evidence-based practice
• Care pathways
– Reduce variation,
waste, cost
– Improve outcomes
• Develop communication
skills
• Support clinical research
At the Bedside
• Select treatment based
on value and evidence
• Integrate patient values
• Support research
What can we do to ensure value and access to
high quality cancer care?
Simple Concepts
At the Societal Level
• Demand value
• Align incentives to
promote quality
• Support research
At the Bedside
• Select treatment based
on value and evidence
• Integrate patient values
• Support research
High Value Cancer Care