Hospitals increasingly are purchasing physician practices and employing individual physicians as part of their strategy to evolve into fully integrated health systems. This consolidation offers the potential for improvements in care coordination and efficiency, but also the risk of increased pricing power and organizational complexity. This study uses 2013-14 claims data from Anthem Blue Cross of California, covering all commercially insured enrollees in the firm’s PPO products, to examine the cost of care incurred by patients treated by hospital-affiliated physicians in comparison to costs incurred by patients treated by physicians not employed by hospital-owned medical groups and practices. The total cost of care per patient is measured using claims for ambulatory, hospital, pharmaceutical, and ancillary clinical services. This study also examines selected measures of clinical quality, which vary by specialty. Data were obtained from Anthem. This study is funded by the California Public Employee Retirement System (CalPERS).
Many insurance policies, both public and private, impose onerous cost sharing requirements on patients needing high-cost specialty pharmaceuticals for cancer, Hepatitis C, auto-immune diseases, and other complex conditions. The California health insurance exchange (Covered California) has re-designed its coverage criteria to limit the financial risk and barriers to access for these drugs and the patients who use them. This project analyzed the Covered California coverage re-design as part of the BCHT interest in promoting fair and effective incentives for consumers to select high-value health care.
Traditional methods for paying oncologists, which rely on fee-for-service for patient office visits and cost-plus reimbursement (‘buy and bill’) for office-infused chemotherapies, encourage over-prescription of expensive drugs and under-provision of supportive services such as patient education, monitoring, and end-of-life care. Two principal alternatives are being pioneered in the market, one emphasizing reforms that can be implemented by almost all oncology practices and the other emphasizing improvements that can be implemented by exceptionally large (and ideally most efficient) practices. This study uses case study methods to examine the two leading examples of each strategy. The Anthem oncology pathways payment program supplements traditional fee-for-service and drug reimbursement with a $350 per-patient-per-month payment to oncology practices that adopt and adhere to evidence-based cancer drug ‘pathways’. The CMS “oncology care management” program supplements traditional payments with a $160 per-patient-per-month fee plus the potential for meaningful shared savings if actual expenditures fall below expenditure targets for Medicare beneficiaries affiliated with participating practices. The Anthem program has rolled out successfully across the entire nation, while the CMS program launched in early 2016 for approximately 100 large practices (oncology medical homes).