Insurer-driven price negotiation makes dent in cancer care cost growth

Though the global market for cancer treatments rose to $107 billion in 2015, health insurers' efforts to curtail rising costs are having an effect, according to a new report from IMS Health.

For patients in commercial insurance plans with a cancer diagnosis who are receiving active treatment, the average total treatment costs reached $58,000 in 2014, up 19 percent from 2013.

In the oncology drug market, global growth is expected to be 7.5 to 10.5 percent through 2020, spurred in part by the wider use of new products such as immunotherapies, the report says. However, that growth is offset in part by the reduced use of some treatments with inferior clinical outcomes. 

The concept of paying for value in the cancer care space has gained steam of late with health insurers, as major companies including Anthem, UnitedHealth, Aetna and Highmark have all debuted value-based oncology payment models aimed at reducing costs and improving quality. And when it comes to paying for all types of drugs, insurers are increasingly pushing manufacturers toward outcomes-based pricing deals.

In fact, health insurers' ability to negotiate lower prices has been the key driver of lower net prices and lower net price growth for cancer products, the IMS report says.  

Yet insurers are often less able to negotiate lower rates on specific cancer medicines that are infused because of the way medical claims are reimbursed for the service including the drug rather than the drug alone, the report adds.

Changes in where and how cancer care is delivered are likely to affect payers, as well. For example, more than 83 percent of oncologists are now part of an integrated delivery network or a system with a corporate parent, which makes them more likely to follow pathways for cancer treatments rather than independent standards of care, according to the report.

Some doctors have taken issue with the idea of payers creating clinical pathways for cancer care, though, arguing that oncologists instead should be in charge of determining how care should be administered.

To learn more:
- read the report (registration required)

Related Articles:
Cancer care a prime target for value-based payment models
Aetna's oncology medical home will 'define the value of care'
Highmark unveils bundled-payment model for cancer care
Anthem, UnitedHealth experiment with value-based oncology payment models
Docs say oncologists--not payers--should determine cancer care pathways

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