Cancer Care in an ACO LandscapeKelly Blair, COO, Oncology Resource NetworksSeptember, 2014

Kelly Blair BioManaged care leader with 17 years experience leading quality and affordability programs across multiple complex medical condition areas.10 years with UnitedHealthcare5 years with OptumVP of Oncology Products at MedSolutionsJoined ORN in March 2014 as COOMasters degree in health policy analysisMember of the Women’s Business LeadersMentiuum Alumni

The Oncology Problem Cancer costs are increasing with no demonstrated improvements in the quality of patient care1.

SPEND TREND1Institute of Medicine, Delivering High-Quality Cancer Care 2013

The Evolving Payer Landscape

• Market consolidation will continue in the form of delivery system integration.3

• Payers and providers are moving toward value-based contracts.2

• The number of ACOs will continue to grow.1

1Leavitt Partners, ACO Updates and Market Transition Webinar, September 20132 Gamble, M and Punke,H, 100 Accountable Care Organizations to Know, Beckers Hospital Review, August 14, 20133 Oliver Wyman, ACO Update: Accountable Care at a Tipping Point, April 2014

ARE YOU READY FOR THE ONCOLOGY SHOWDOWN IN YOUR MARKET???

Oncology ‘Showdown’ Territories• Tremendous

growth rates in cancer services

• Providers will compete for volumes

• Risk of consolidation to high cost providers

• Payers will seek relief…

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Orlando Growth Projections2013 Cancer VolumesOrange & Seminole Counties

5-Year Cancer Growth RatesOrange & Seminole Counties

Specifics: Oncology Resource Networks Market Demand Forecast application (IoC v13.0) accessed on 08/23/14. Data are for 2013–2018. Cancer service line. Sources: Impact of Change® v13.0; PharMetrics; CMS; Sg2 Analysis, 2014.

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Broward Growth Projections2013 Cancer VolumesBroward County

5-Year Cancer Growth RatesBroward County

Specifics: Oncology Resource Networks Market Demand Forecast application (IoC v13.0) accessed on 08/23/14. Data are for 2013–2018. Cancer service line. Sources: Impact of Change® v13.0; PharMetrics; CMS; Sg2 Analysis, 2014.

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Tampa Growth Projections2013 Cancer VolumesHillsborough & Pinellas Counties

5-Year Cancer Growth RatesHillsborough & Pinellas Counties

Specifics: Oncology Resource Networks Market Demand Forecast application (IoC v13.0) accessed on 08/23/14. Data are for 2013–2018. Cancer service line. Sources: Impact of Change® v13.0; PharMetrics; CMS; Sg2 Analysis, 2014.

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Tampa Chemotherapy Forecast

66% of chemotherapy services in Hillsborough County are provided by Moffitt.

9% of medical oncologists deliver 50% of the chemotherapy in FL.

7 of the top 10 volume chemotherapy oncologists are affiliated with Florida Cancer Specialists.

• Tampa will see a 41% increase in demand for chemotherapy services, more than double the Southern Region and National growth.

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Oncology - Chemotherapy 31,275 0.00% 35,546 13.70% 38,358 22.60% 44,012 40.70% 32.00% 20.40% 17.00%

Central Florida US South US 2013 2016 2018 2023   2023 2024 2024Procedure Volumes % Change Volumes % Change Volumes % Change Volumes % Change % Change % Change % Change

Tampa Radiation Therapy Forecast

• Tampa will see a substantial increase in demand for radiation therapy services, particularly for SRS/SBRT and Proton Beam modalities.

55% of radiation therapy services in Hillsborough County are provided by Moffitt.

4 of top 10 volume radiation therapists are affiliated with 21st Century Oncology

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Hillsborough County   US National2013 2016 2018 2023   2024

Procedure Group   Volumes % Change Volumes % Change Volumes % Change Volumes % Change   Volumes % ChangeOncology - Radiation Therapy Oncology - Radiation Therapy 2,418 0.00% 2,688 11.20% 2,871 18.80% 3,208 32.70%   1,201,827 -3.20%  Oncology - Radiation Therapy: 3D Conformal and other EBRT 24,266 0.00% 25,735 6.10% 26,588 9.60% 27,686 14.10%   3,750,424 -1.30%  Oncology - Radiation Therapy: HDR Brachytherapy 625 0.00% 697 11.60% 744 19.10% 856 37.00%   125,627 24.50%  Oncology - Radiation Therapy: IMRT 25,605 0.00% 28,881 12.80% 30,959 20.90% 34,482 34.70%   3,825,334 9.80%  Oncology - Radiation Therapy: LDR Brachytherapy 327 0.00% 370 13.10% 399 21.90% 464 41.70%   36,579 22.20%  Oncology - Radiation Therapy: Proton Beam Therapy 238 0.00% 340 42.60% 375 57.50% 419 75.70%   124,357 60.20%  Oncology - Radiation Therapy: SRS/SBRT 481 0.00% 606 25.90% 703 46.10% 952 97.90%   208,526 103.60%

Oncology - Radiation Therapy Total   53,961 0.00% 59,317 9.90% 62,640 16.10% 68,067 26.10%   9,307,038 5.00%

The Oncology System of Care

CARE = Clinical Alignment and Resource Effectiveness; MDC = multidisciplinary care; Med Onc = medical oncology; mgmt = management; OP = outpatient; PCP = primary care physician.

Consider the Site…Chemotherapy by Site of Care2

Hospital OP Office All OtherNew York, NY 84% 15% 1%Syracuse, NY 29% 55% 16%Buffalo, NY 96% 4% 0%

San Francisco, CA 59% 37% 4%Los Angeles, CA 30% 70% 0%San Diego, CA 58% 41% 1%Philadelphia, PA 83% 16% 1%Pittsburgh, PA 74% 3% 23%Detroit, MI 96% 4% 0%Ann Arbor, MI 76% 3% 21%Orlando, FL 38% 57% 5%Tampa, FL 77% 22% 1%

The cost of chemotherapy in a hospital outpatient infusion suite is 24% higher than in the physician’s office.1

1 Avelere Health LLC, Total Cost of Cancer Care by Site of Service: Physician Office vs Outpatient Hospital , March 20122 Sg2 Site of Service Commercial Claims Analysis, 2012-13

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Think all providers are the same?? Even providers within the same group will demonstrate significant variation in practice patterns:

Provider Count Actual Total Cost Expected Total Cost Ratio Episode Count % of total Episodes1 $88,485 $213,313 0.41 33 9%2 $194,481 $72,881 2.67 13 4%3 $38,386 $118,559 0.32 11 3%4 $10,656 $10,577 1.01 11 3%5 $30,850 $86,506 0.36 10 3%6 $27,207 $14,648 1.86 9 3%7 $62,525 $63,602 0.98 9 3%8 $18,639 $10,646 1.75 8 2%9 $33,082 $64,789 0.51 8 2%

10 $256,119 $129,335 1.98 8 2%

2012-2014 Medicare Advantage data for cancer episodes for a single payer and provider group in Central Florida markets.

Provider ETG

Actual Total Cost

Expected Total Cost

Actual/ Expected Cost

Episode Count

Actual per Episode

Expected per Episode

A Malignant neoplasm of pulmonary system, with active mgmt, w/o surgery $673,782 $674,816 1.00 12 $56,668 $56,755B Malignant neoplasm of pulmonary system, with active mgmt, w/o surgery $182,602 $170,265 1.07 3 $60,867 $56,755C Malignant neoplasm of pulmonary system, with active mgmt, w/o surgery $102,650 $127,699 0.80 2 $45,622 $56,755

Variation within episodes Practice patterns also vary across providers on individual episodes of care.

Provider Group ETG

Actual Total Cost

Expected Total Cost

Actual/ Expected Cost

Episode Count

Actual per Episode

Expected per Episode

A Malignant neoplasm of breast, with active mgmt, with surgery $141,803 $70,431 2.01 4 $33,365 $16,572B Malignant neoplasm of breast, with active mgmt, with surgery $518,152 $182,237 2.84 15 $35,153 $12,363C Malignant neoplasm of breast, with active mgmt, with surgery $29,748 $57,382 0.52 3 $9,916 $19,127

2012-2014 Medicare Advantage data for cancer episodes for a single payer and top 3 provider groups in Central Florida markets.

Why hasn’t oncology been more front and center?

Barkley, R, Where Does Oncology Fit in the Scheme of Accountable Care?, J Oncol Pract. Mar 2012; 8(2): 71–74.

Is Oncology suited for ACOs? Oncologists have well-developed

skill sets in multi-specialty care of chronically ill patients

Lots of avoidable cost opportunity

Cancer patients end up in hospital beds

Site of care cost differentials

Is Oncology Suited for ACO’s? (cont.) Low volume/high cost/high

variability/high complexity Oncology Care is hard to define and

measure (cancer data immaturity) None of the 33 measures have to

do w/ Oncology Could put patient best interest in

competition with interests of the ACO (new drugs) – maybe episodes are better?

Much of the cost is in end-of-life care… not easy to tackle

Does it matter?

Advice… Pick committed partners Signing the contract is just the beginning Designate a “go-to” person from each partner Speak the same language Identify outliers Keep the ball rolling

Deirdre Fuller, Oncology Roundtable, The Advisory Board, November 2013

Explore with Like-Minded Partners Organize Partner Explore Find Common Ground…

The Role of Clinical Guidelines ACO or no ACO… it’s a good place to start.

Patient-Centered Care

‘Get your own house in order, even if you aren’t a member of the neighborhood association…’1

1Okon, Ted, Cobb, Patrick, Is there a Home for Oncology in ACOs? Practice Update, Cancer Policy Forum (2014).

Aligned Financial Incentives

Pay for Participatio

n

Pay for Performanc

e

Shared Savings

Bundled Payments

Specialty Capitation

Full Risk Carve-out

Payer at Risk Provider at RiskShared Risk

VOLUME

VALUE

Improved Outcomes

Affordability

Clinical Quality

High-Performing Oncology Networks

Evidence-

Based Medici

ne

Patient-

Centered

Care

Aligned Financi

al Incenti

ves

Monitor

Measure

Repeat Improve

Kelly’s Top 10 Oncology KPIs

Compliance with Evidence-

based Guidelines

Screening and Imaging

Utilization

ER/IP AdmissionsReadmissionsAdvance DirectivesPatient Satisfaction

EOL Acuity

Pathways ComplianceGeneric Prescribing Rate

Total Cost of Care

Value-based Cancer Care

“Price is what you pay. Value is what you get.” – Warren Buffett

QUESTIONS?