By Kate Norlander ’07 M.B.C. from the Spring 2012 edition of B. Magazine.
It’s no secret that medical costs are soaring, and the costs related to treating cancer are particularly high. While costs and treatment decisions are serious issues facing patients, employers, oncologists, pharmacists, insurance companies and politicians, oncology today can be not only scary but also exciting.
“It’s so much better than 20 to 30 years ago,” said Tom Flynn ’71, M.D., president of Minnesota Oncology and a practicing physician in oncology and hematology. “Cancer patients today can get well and enjoy life. This trend will continue as we have better, more effective, less toxic treatments.”
Minnesota Oncology is a physician-owned practice with 58 physicians and nine clinic sites. Flynn is responsible for governance, physician policy development, strategic planning and relationships with outside entities such as hospitals and insurance companies. He is the face of the organization to the outside world and, as a physician leader, he works closely with the executive director of the practice. An alumnus of the University of St. Thomas with a major in chemistry, Flynn shared his views on trends in oncology of particular interest to non-physicians and businesspeople.
Costs and Reimbursements
You can’t talk about trends in oncology without discussing costs. Cancer care is getting more expensive, and the costs of cancer care are escalating at a faster rate than overall health care costs. Many new drugs have been introduced, but these new drugs tend to be very expensive as the pharmaceutical industry works to recoup research and development costs. As Flynn notes, these cost increases are unsustainable and must be addressed by stakeholders.
While costs rise, there is continued downward pressure on reimbursement to medical service providers. Third-party payers want to be responsive to their clients, which are typically employers. So to keep insurance costs down, they try to keep the cost of care down. As the Affordable Care Act is implemented, the health care landscape will change, but not all of the ramifications of the act are known. Flynn said, “Patients have easier access to care, but it is unclear how oncology fits in the picture.” He observes that methods of reimbursement affect care delivery.
Currently, the most popular form of reimbursement is “fee for service.” This form of reimbursement can encourage providers to provide more treatments than are necessary. An alternative, a lump-sum payment, can encourage providers to make choices for the patient based on controlling costs, rather than on the best course of action.
Flynn notes that we need to develop ways to base reimbursement on episodes of care or groups of services. His practice embraces “clinical pathways,” a way of standardizing a patient’s care based on best practices.
“We want patients to receive the best possible care at the most reasonable cost. There are ways to do this. Clinical pathways are evidence-based and have been developed to provide high-quality care. Research has shown that using clinical pathways versus using other methods to treat cancer has led to substantial cost reduction and equivalent survival rates.”