Comparative Costs of Advanced Proton and Photon Radiation Therapies

Nikhil G. Thaker; Steven J. Frank; Thomas W. Feeley

Article | Journal of Comparative Effectiveness Research

Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer

by Nikhil G. Thaker, Steven J. Frank and Thomas W. Feeley

Abstract

Time-driven activity-based costing (TDABC) is an innovative costing tool in healthcare that can be used to directly compare the true cost of competing technologies over the full care cycle. Rather than only comparing therapeutic effectiveness over a limited number of outcome measures, healthcare stakeholders will need to move toward comparing the value of care delivery and therefore the cost of therapies. Measuring the value of advanced technologies like proton beam therapy versus intensity-modulated radiation therapy (IMRT) is especially crucial, given the high upfront cost of developing, building, and delivering care with these modalities. An incomplete understanding of the value of costly, yet effective, technologies could impede medical innovation and decrease the quality of cancer care through a reduction of patient access by third-party payers. With TDABC, providers may begin to uncover clinical situations in which higher-cost, advanced therapies are actually justified over the full episodic care cycle. Understanding provider costs will become even more important as healthcare reform transitions to value-based purchasing.

Keywords: head and neck cancer; IMRT; proton therapy; Time-Driven ABC; Technology; Activity Based Costing and Management; Medical Specialties;

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Thaker, Nikhil G., Steven J. Frank, and Thomas W. Feeley. "Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer." Journal of Comparative Effectiveness Research 4, no. 4 (2015): 297–301.

Since its establishment in 2005, Hamburg's Martini Klinik had single-mindedly focused on prostate cancer care with a commitment to measure long-term health outcomes for every patient. A wholly owned subsidiary of the Hamburg University Hospital, Martini was a "hospital in a hospital" in close proximity to other hospital departments and services. By 2013, Martini Klinik had become the largest prostate cancer treatment program in the world with 5,000 outpatient cases and more than 2,200 surgical cases annually, with patients coming from all over Germany and from other countries. However, German private insurers were cutting reimbursement for prostate cancer by 15 percent, and denying extra payment for some new procedures, while reimbursement by public health plans was not covering costs. Dr. Hartwig Huland, Martini's founder and Medical Director, was considering how to respond.

At one point or another in our life, we all become consumers of the health care industry. Indeed, health care affects everyone and encompasses a diverse set of services from childbirth, to illness prevention, to the management of chronic disease and end-of-life care. Health care in the United States is executed through a complex set of interrelationships between three distinct parties: payers, providers, and consumers. Each group has its own perspective accompanied by a set of unique incentives, which complicate the adoption of a value-based health care system. To transform the American health care delivery system, all participants including patients, physicians, employers, insurance companies, and the government need to recognize that value is best defined as “a given health outcome per dollar of cost expended.” In this article, we examine some of the challenges to creating and implementing a value-based health care system against the backdrop of a turbulent industry and consider the implications for the anesthesiologist.

Article | NEJM Catalyst | November 8, 2018

Transitioning Payment Models: Fee-for-Service to Value-Based Care

Thomas W. Feeley and Namita Seth Mohta

In a survey of the NEJM Catalyst Insights Council in July 2018, 42% of respondents say they think value-based reimbursement models will be the primary revenue model for U.S. health care. Indeed, this transition is already happening. Respondents report that a quarter of reimbursement at their organizations is based on value, on average. While three-quarters of their revenue remains fee-for-service, we see a remarkable change to a reimbursement system that was static for decades. In particular, survey respondents’ organizations are pursuing two value-based strategies: accountable care organizations, which often use capitated payments, and bundled payments. Nearly half (46%) of respondents say value-based contracts significantly improve the quality of care, and another 42% say value-based contracts significantly lower the cost of care. The survey identifies the leading barriers to implementing value-based reimbursement models. Infrastructure requirements, including information technology (indicated by 42% of respondents), and changing regulation/policy (34%) are the top two. There is strong consensus on the broad metrics that are most important for measuring value-based care. Outcome measures top the list, with 60% of respondents saying they are extremely important. This survey suggests that many in health care see value-based reimbursement as a real solution to the nation’s current health care crisis.

Keywords: payment methods; value-based healthcare reimbursements; Health Care and Treatment; Value; Transformation;

Citation:

Feeley, Thomas W., and Namita Seth Mohta. "Transitioning Payment Models: Fee-for-Service to Value-Based Care." NEJM Catalyst (November 8, 2018). View Details

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Comparative Costs of Advanced Proton and Photon Radiation Therapies: Lessons from Time-driven Activity-based Costing in Head and Neck Cancer

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