The Challenge of Addressing Drug Expenditure to Reduce Total Healthcare Costs in EOM

As the cost of cancer drugs continues to rise, influencing overall healthcare costs remains a challenge.

Within the Enhancing Oncology Model (EOM), practices are taking as many initiatives as possible to reduce drug costs, compared to the Oncology Care Model (OCM), when practices implemented a smaller number of initiatives to impact drug costs, explains Stuart Staggs, vice -president, Transformation and Shared Services, McKesson.

Under the OCM, drug costs accounted for roughly 62% of total costs, but that share has now increased to 72% in the EOM.

This transcript has been lightly edited for clarity.

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How are practices addressing drug spending to reduce the overall cost of care?

Abt Global, formerly Abt Associates, has released the final results for the Oncology Care Model for performance period 11. They said after six years of Oncology Care Model, the goal of the model is obviously not to reduce costs because costs will continue to rise, but they said over that six year period we have reduced costs per episode, but the savings in cost per episode were of course offset by (monthly payments for enhanced oncology services) and offset by performance-based payments. So it swallowed up all the benefits, so they came out negative for the OCM.

It was also very interesting, because in that model they mapped out the costs over time, how much the total costs for oncology care increased over six years. Total health care costs increased 25% in six years, and then 20 percentage points of that 25%, you know, 80% of it, was drug related. It is something where drug costs are prominent. I think we saw at the OCM that 62% of the total costs were medicines. In the Enhancing Oncology Model we see that the seven diagnoses alone – of course the expensive diagnoses are very acute and very complex – (the drug costs are) approximately 72% of the total costs.

The things that we’re doing with the drug initiatives to really reduce the overall cost of care are traditional things that we’ve always done with dose finding and dose rounding. We’re looking at the use of therapeutic exchange and then the reduction of pegfilgrastim in the metastatic setting, and also looking at bone health. These kinds of general things that were done in the OCM, and what we’re doing now additionally is – because it’s a very fluid environment with medicine – we have a pharmacy solutions team that’s always looking at evidence-based care, best clinical outcomes, the least amount of side effects, and which are also the best alternatives to medicines from a cost perspective. And they work with practices to properly implement exchanges for patients coming into the program and beyond.

We are always looking at the next opportunities in the drug space. There’s nothing we’re seeing right now. If you look at 2020 and the OCM, biosimilars had a big impact there, but we don’t see anything special yet within the EOM just because of the timing. But it’s something that we always look at and what is the cumulative number of initiatives that we can put in place to kind of reduce the cost of medicines because again, it’s going to be more improvement through many initiatives within EOM versus a handful as if it were an OCM for the drug cost part of the equation.