First-Year Savings of an Oncology Accountable Care Organization

The first oncology-specific accountable care organization (ACO) reported more than a 2% savings in its first year of existence. Results were presented by Leonard A. Kalman, MD, Chairman, Advanced Medical Specialties during the 2013 Cancer Center Business Summit Transforming Oncology Through Innovation meeting held this past October in Chicago, IL. The goals of the ACO were to improve patient experience and population health, and reduce the per capita cost of cancer care.

In its first year of operation, the oncology-specific ACO—an agreement between Baptist Health South Florida, Florida Blue, Advanced Medical Specialties—achieved a $250,000 savings, reported Dr. Kalman. While the ACO operates under a fee-for-service payment model, any savings of 2% or more are shared between the partners as long as specific quality metrics, such as the Quality Oncology Practice Initiative (QOPI) certification, are met. QOPI is an oncologist-led, practice-based quality assessment and improvement program initiated by the American Society of Clinical Oncology (ASCO).

The ACO initially enrolled 226 patients with the most common cancers (breast, digestive system, leukemia and lymphoma, female reproductive, male reproductive, and respiratory).

Total cost of care in its baseline year was $23 million, or about $102,300 per member. To reduce costs, the ACO focused its efforts on improving patient education, achieving adherence to pathways for chemotherapy and supportive care drugs, decreasing emergency department visits, and improving end-of-life planning.

At 27% of the total, the biggest spend for the ACO were injectable drugs, making strict adherence to pathways highly important. The pathways for chemotherapy and supportive care drugs required a well-defined, tightly managed approval process to prevent leakage to higher cost hospital settings. The ACO also began work on palliative care efforts that resulted in fewer lines of treatment. In addition, the ACO hired an advanced practice provider to manage all chemotherapy education and transitions between inpatient and outpatient settings.

Dr. Kalman provided takeaway lessons at the close:

• Pick partners who are committed with similar goals and level of commitment
• Once the contract is signed, keep the momentum going to ensure accountability among all partners
• Identify a “go-to” person from each partner
• Streamline term use to facilitate ease of data exchange
• Identify and reach out to high-cost patients on a regular basis

When looking at the spend breakdown from the baseline and first year, Dr. Kalman admitted that they weren't exactly sure where the savings came from. However, they did identify radiation therapy and high-end imaging as their next areas of focus.