- Email: [email protected]
Closing comment: Economic trends
Closing Comment:
Economic
Trends
Joyce M. Yasko and Marti Verfurth
A
CCORDING TO Meditrends 1991-1992 of the American Hospital Association, “oncology will overtake cardiology as the dominant medical specialty in the United Statesand will account for 20% of health care expenditures in the 90s.” ’ Economic trends are causing changesin oncology practice. The cost of cancer care is influencing the treatmentplan selected,the site where treatment is administered, and the supportive care that is administered. Oncology nurses are central to every economic issue surrounding cancer care. They are askedto provide care at the lowest possible cost to the patient, while working to enhance the economic well-being of the health care agency by developing strategiesto enhancerevenue generation. The economics of chemotherapyadministration of past decadesprovides a foundation for understanding the economic trends of the 1990s. In the 194Os,cancer drugs were administered mostly by trial and error. The drugs that were available had limited and nonspecific efficacy. Generally, the costs associatedwith treatment were assumedby the patient and family or in the case of charitable casesby the hospital. A milestone in the progress of cancer therapy occurred when the National Cancer Institute initiated a searchfor new chemotherapeutic agents. A wider variety of anticancer products were introduced and the term “chemotherapy” was adopted to refer to antineoplastic or cancer treatment. Chemotherapy served as the catalyst for the development of oncology nursing as an area of nursing specialization. As researchprogressed,pharmaceuticalcompanies introduced new drugs and assistedin the design of new treatmentplans. Costs associatedwith From the Nursing and Patient Care Division, Pittsburgh Cancer Institute, University of Pittsburgh, PA. Joyce M. Yasko, PhD, FAAN: Professor and Associate Administrator, Pittsburgh Cancer Institute, Nursing and Patient Care Division; Marti Verfurth, BSN, MBA, RN, Consultant in Cancer Care Administration, University of Pittsburgh. Address reprint requests to Joyce M. Yasko, PhD, FAAN, University of Pittsburgh, 368 Victoria Bldg, Pittsburgh, PA 15216. Copyright 0 1992 by W.B. Saunders Company 0749-2081/92/0802-0010$5.0010
156
chemotherapy administration were covered by health insurance provided through the employer. For the majority of patients, chemotherapyadministration costs were completely reimbursed. In 1965, Medicare began to underwrite the costs of health care for people over 65 years of age. Medicaid was instituted for the financially indigent. Chemotherapytreatments, including those considered to be clinical trials, were reimbursedby commercial health insurance,Medicare, and Medicaid. Even though most insurance policies stated that they excluded patient care costs associated with investigational therapy, few requestsfor payment were questionedor denied. However, as costs began to increase, cost control measuresbeganto be introduced. The fist measureto control the cost of health care by the federal government was the regulation of the cost of new facilities and technology by requiring a certificate of need. Becauseof the political nature of this system, it did little to control costs. Continued escalation of costs occurred during the 1980s as clinical trials expanded and new modalities of treatmentwere instituted. The role of the oncology nurse expandedas well. Vascular accessdevices improved supportive care and contributed to increasedhealth care costs. Prospective reimbursement for Medicare was congressionally mandatedin 1982 and diagnosticrelated groups were selected to initiate this new systemof reimbursement.The managedcare concept of health maintenance organizations, preferred provider organizations, and managedhealth care schemeswas usedin an attemptto contain the escalating costs. Health insurance organizations instituted the concept of prior approval or preauthorization for hospital admission and for major treatmentsand therapies, including chemotherapy. Frequently, these authorizations were granted or denied by employees with little or no medical knowledge or understandingof the proposedtreatment. Cancer therapy was increasingly influenced by economic factors as hospitals received their reimbursementfrom managedhealth care systems. The decadeof the 1990sopenedwith 12% of the gross national product being spent on health care.
Seminars in Oncology Nursing, Vol 8. No 2 (May),
1992:
pp 156-158
CLINICAL TRIALS
Every one involved in health care is now implementing cost reduction measures. Health professionals are working harder and longer and making less money per volume of patients cared for. Although higher salaries are being paid, nurses are being asked to assumegreater workloads. Institutional profit margins are shrinking. Patients are paying more and more for health care, directly and indirectly, and the cost to industry has reached record highs. Nevertheless, restricted access to health care is now a reality. This is compounded by a health care crisis in the beginning stagesof development as the “baby boomers” approachthe sixth decadeof life. Several health care economic changesare presently occurring as payers attempt to decreasethe cost of health care. Hospitals are placing greater emphasis on determining the actual cost of care delivered. Systemsare now being designedto calculate the actual cost of each aspectof care. Hospitals are selecting specific diseasesthat will be emphasizedin marketing programs. Becausecancer care is complex and costly, many times there is inadequate reimbursement. In February of 1991, the Gallup Organization published their results of oncologists’ attitudes and experienceswith cancer treatment.* Approximately 56% of respondentsreported reimbursementas a problem either very often or fairly often. Only 8% reported reimbursement asrarely a problem in providing the treatment of choice to their patients with cancer. In February of 1991, the SenateCommittee on Labor and Human Resources asked the General Accounting Office (GAO) to examine the issue of off-label drug use in the treatment of cancer.3Specifically, the charges were to addressto what extent approved anticancerdrugs were prescribedfor off-label uses and how this varied by patient characteristics, therapeutic intent, and type of cancer; to what extent are third party payers reimbursing physicians for off-label usage; and to what extent have physicians altered the way they treat cancer patients becauseof difficulties in obtaining reimbursement for off-label drug use. The findings were that off-label drug use among oncologists is widespread. A third of all drug administrations to cancer patients were off-label and more than half of the patients received at least one off-label drug. In general, off-label use was higher where there was no consensuson the best therapy for a specific
157
cancer. The majority of the survey respondentsreported reimbursementproblems for the use of offlabel drugs and most indicated that problems were getting worse. Approximately 75% of oncologists reported reimbursementdenials for off-label drug use. Oncologists cited Medicare claims-processing contractorsas the third-party payers who most frequently causedthem to alter their preferred treatments. The implications of thesefindings are far reaching. For example, approximately 23% of oncologists surveyed reported that reimbursement policies and the costs of certain drugs made it necessaryfor them to alter not only their preferred treatment but the setting in which care was provided. Sixty-two percent of GAOs respondentsreported admitting patients to the hospital solely to circumvent restrictions imposedby reimbursement policies. Respondentsreported altering therapies most frequently in treating colon cancer, malignant melanoma, hormone refractory prostate cancer, and metastaticbreastcancer. It is important to note that these are among the most prevalent forms of cancer and the treatment decisions made for these diseasesare likely to influence large numbers of patients. Treatments such as bone marrow transplantation, colony-stimulating factor therapy, and biological responsemodifier therapy are experimental and costly. Increasingly, they are not covered by the third-party payers and yet 62% of oncologists believe that colony-stimulating factors will have a high impact on cancer care.2 Some payers are identifying centers of excellence. Only patients treated in a center of excellence will receive reimbursement. Patients have resorted to suing health insurance companies for reimbursement for care associatedwith high technology and high cost therapy. Frequent changesin diagnostic codes have dramatically changed oncology practice patterns. A changein the 1990codesdisallowed the chargefor supervision of chemotherapy, resulting in physicians moving their patients receiving chemotherapy from the outpatient departmentsof hospitals to their private offices. Through intense lobbying by the American Medical Association, the 1990 regulation was changed in the 1991 code book to again allow a physician fee for the supervision of chemotherapyadministration. However, many in-
158
YASKO AND VERFURTH
surance companies continue to disallow this fee. Confusion and anxiety are being created for patients and their families, health professionals, and the public by the changing nature of reimbursement. Resource-BasedRelative Value Scale, the latest federal government cost containment measure, will become a reality in 1992. The anticipated reduction in health care cost, using this fixed fee schedule, is projected to be 16% over 5 years. A big concern is that physicians will request increased visits by patients to offset the decreased reimbursement. Ambulatory Visit Groups are planned as a future measurefor controlling costs. This fixed fee reimbursement system is yet another means for the Health Care Finance Administration to bring the prospective payment systemto ambulatory care. A
common thread in all reimbursementissuesis that cost comparisons are not easy to make because many factors affect both cost and reimbursement. Costsof care differ from region to region and from institution to institution. An emerging and important role of the oncology nurse is to obtain maximum reimbursement for both the patient and for the health care agency. Documentation is a key factor in achieving this goal. Communicating effectively with third-party payers is another. In the future, what nurses do will be driven by what patients and families need and demand, and who pays for these needs. The cost of care has become a vital component of oncology nursing practice. Economic factors surrounding cancer care will greatly influence how and where oncology nursing is practiced in the future.
REFERENCES 1. Meditrends in Cancer Care 1991-1992. Chicago, IL, American Hospital Association, 1991 2. A Gallup Survey of Oncologists’ Attitudes and Experiences with Cancer Treatment. Princeton, NJ, The Gallup Organization, Inc., 1991
3. United States General Accounting Office: Off-Label Drugs: Initial Results of a National Survey. Washington, DC, United States General Accounting Office, GAO/PEMD-9112BR, 1991
Economic
Trends
Joyce M. Yasko and Marti Verfurth
A
CCORDING TO Meditrends 1991-1992 of the American Hospital Association, “oncology will overtake cardiology as the dominant medical specialty in the United Statesand will account for 20% of health care expenditures in the 90s.” ’ Economic trends are causing changesin oncology practice. The cost of cancer care is influencing the treatmentplan selected,the site where treatment is administered, and the supportive care that is administered. Oncology nurses are central to every economic issue surrounding cancer care. They are askedto provide care at the lowest possible cost to the patient, while working to enhance the economic well-being of the health care agency by developing strategiesto enhancerevenue generation. The economics of chemotherapyadministration of past decadesprovides a foundation for understanding the economic trends of the 1990s. In the 194Os,cancer drugs were administered mostly by trial and error. The drugs that were available had limited and nonspecific efficacy. Generally, the costs associatedwith treatment were assumedby the patient and family or in the case of charitable casesby the hospital. A milestone in the progress of cancer therapy occurred when the National Cancer Institute initiated a searchfor new chemotherapeutic agents. A wider variety of anticancer products were introduced and the term “chemotherapy” was adopted to refer to antineoplastic or cancer treatment. Chemotherapy served as the catalyst for the development of oncology nursing as an area of nursing specialization. As researchprogressed,pharmaceuticalcompanies introduced new drugs and assistedin the design of new treatmentplans. Costs associatedwith From the Nursing and Patient Care Division, Pittsburgh Cancer Institute, University of Pittsburgh, PA. Joyce M. Yasko, PhD, FAAN: Professor and Associate Administrator, Pittsburgh Cancer Institute, Nursing and Patient Care Division; Marti Verfurth, BSN, MBA, RN, Consultant in Cancer Care Administration, University of Pittsburgh. Address reprint requests to Joyce M. Yasko, PhD, FAAN, University of Pittsburgh, 368 Victoria Bldg, Pittsburgh, PA 15216. Copyright 0 1992 by W.B. Saunders Company 0749-2081/92/0802-0010$5.0010
156
chemotherapy administration were covered by health insurance provided through the employer. For the majority of patients, chemotherapyadministration costs were completely reimbursed. In 1965, Medicare began to underwrite the costs of health care for people over 65 years of age. Medicaid was instituted for the financially indigent. Chemotherapytreatments, including those considered to be clinical trials, were reimbursedby commercial health insurance,Medicare, and Medicaid. Even though most insurance policies stated that they excluded patient care costs associated with investigational therapy, few requestsfor payment were questionedor denied. However, as costs began to increase, cost control measuresbeganto be introduced. The fist measureto control the cost of health care by the federal government was the regulation of the cost of new facilities and technology by requiring a certificate of need. Becauseof the political nature of this system, it did little to control costs. Continued escalation of costs occurred during the 1980s as clinical trials expanded and new modalities of treatmentwere instituted. The role of the oncology nurse expandedas well. Vascular accessdevices improved supportive care and contributed to increasedhealth care costs. Prospective reimbursement for Medicare was congressionally mandatedin 1982 and diagnosticrelated groups were selected to initiate this new systemof reimbursement.The managedcare concept of health maintenance organizations, preferred provider organizations, and managedhealth care schemeswas usedin an attemptto contain the escalating costs. Health insurance organizations instituted the concept of prior approval or preauthorization for hospital admission and for major treatmentsand therapies, including chemotherapy. Frequently, these authorizations were granted or denied by employees with little or no medical knowledge or understandingof the proposedtreatment. Cancer therapy was increasingly influenced by economic factors as hospitals received their reimbursementfrom managedhealth care systems. The decadeof the 1990sopenedwith 12% of the gross national product being spent on health care.
Seminars in Oncology Nursing, Vol 8. No 2 (May),
1992:
pp 156-158
CLINICAL TRIALS
Every one involved in health care is now implementing cost reduction measures. Health professionals are working harder and longer and making less money per volume of patients cared for. Although higher salaries are being paid, nurses are being asked to assumegreater workloads. Institutional profit margins are shrinking. Patients are paying more and more for health care, directly and indirectly, and the cost to industry has reached record highs. Nevertheless, restricted access to health care is now a reality. This is compounded by a health care crisis in the beginning stagesof development as the “baby boomers” approachthe sixth decadeof life. Several health care economic changesare presently occurring as payers attempt to decreasethe cost of health care. Hospitals are placing greater emphasis on determining the actual cost of care delivered. Systemsare now being designedto calculate the actual cost of each aspectof care. Hospitals are selecting specific diseasesthat will be emphasizedin marketing programs. Becausecancer care is complex and costly, many times there is inadequate reimbursement. In February of 1991, the Gallup Organization published their results of oncologists’ attitudes and experienceswith cancer treatment.* Approximately 56% of respondentsreported reimbursementas a problem either very often or fairly often. Only 8% reported reimbursement asrarely a problem in providing the treatment of choice to their patients with cancer. In February of 1991, the SenateCommittee on Labor and Human Resources asked the General Accounting Office (GAO) to examine the issue of off-label drug use in the treatment of cancer.3Specifically, the charges were to addressto what extent approved anticancerdrugs were prescribedfor off-label uses and how this varied by patient characteristics, therapeutic intent, and type of cancer; to what extent are third party payers reimbursing physicians for off-label usage; and to what extent have physicians altered the way they treat cancer patients becauseof difficulties in obtaining reimbursement for off-label drug use. The findings were that off-label drug use among oncologists is widespread. A third of all drug administrations to cancer patients were off-label and more than half of the patients received at least one off-label drug. In general, off-label use was higher where there was no consensuson the best therapy for a specific
157
cancer. The majority of the survey respondentsreported reimbursementproblems for the use of offlabel drugs and most indicated that problems were getting worse. Approximately 75% of oncologists reported reimbursementdenials for off-label drug use. Oncologists cited Medicare claims-processing contractorsas the third-party payers who most frequently causedthem to alter their preferred treatments. The implications of thesefindings are far reaching. For example, approximately 23% of oncologists surveyed reported that reimbursement policies and the costs of certain drugs made it necessaryfor them to alter not only their preferred treatment but the setting in which care was provided. Sixty-two percent of GAOs respondentsreported admitting patients to the hospital solely to circumvent restrictions imposedby reimbursement policies. Respondentsreported altering therapies most frequently in treating colon cancer, malignant melanoma, hormone refractory prostate cancer, and metastaticbreastcancer. It is important to note that these are among the most prevalent forms of cancer and the treatment decisions made for these diseasesare likely to influence large numbers of patients. Treatments such as bone marrow transplantation, colony-stimulating factor therapy, and biological responsemodifier therapy are experimental and costly. Increasingly, they are not covered by the third-party payers and yet 62% of oncologists believe that colony-stimulating factors will have a high impact on cancer care.2 Some payers are identifying centers of excellence. Only patients treated in a center of excellence will receive reimbursement. Patients have resorted to suing health insurance companies for reimbursement for care associatedwith high technology and high cost therapy. Frequent changesin diagnostic codes have dramatically changed oncology practice patterns. A changein the 1990codesdisallowed the chargefor supervision of chemotherapy, resulting in physicians moving their patients receiving chemotherapy from the outpatient departmentsof hospitals to their private offices. Through intense lobbying by the American Medical Association, the 1990 regulation was changed in the 1991 code book to again allow a physician fee for the supervision of chemotherapyadministration. However, many in-
158
YASKO AND VERFURTH
surance companies continue to disallow this fee. Confusion and anxiety are being created for patients and their families, health professionals, and the public by the changing nature of reimbursement. Resource-BasedRelative Value Scale, the latest federal government cost containment measure, will become a reality in 1992. The anticipated reduction in health care cost, using this fixed fee schedule, is projected to be 16% over 5 years. A big concern is that physicians will request increased visits by patients to offset the decreased reimbursement. Ambulatory Visit Groups are planned as a future measurefor controlling costs. This fixed fee reimbursement system is yet another means for the Health Care Finance Administration to bring the prospective payment systemto ambulatory care. A
common thread in all reimbursementissuesis that cost comparisons are not easy to make because many factors affect both cost and reimbursement. Costsof care differ from region to region and from institution to institution. An emerging and important role of the oncology nurse is to obtain maximum reimbursement for both the patient and for the health care agency. Documentation is a key factor in achieving this goal. Communicating effectively with third-party payers is another. In the future, what nurses do will be driven by what patients and families need and demand, and who pays for these needs. The cost of care has become a vital component of oncology nursing practice. Economic factors surrounding cancer care will greatly influence how and where oncology nursing is practiced in the future.
REFERENCES 1. Meditrends in Cancer Care 1991-1992. Chicago, IL, American Hospital Association, 1991 2. A Gallup Survey of Oncologists’ Attitudes and Experiences with Cancer Treatment. Princeton, NJ, The Gallup Organization, Inc., 1991
3. United States General Accounting Office: Off-Label Drugs: Initial Results of a National Survey. Washington, DC, United States General Accounting Office, GAO/PEMD-9112BR, 1991