Effects Of Rising Drug Costs On Efforts To Control Overall Cost At A Large Academic Cancer Center.

2 Background: Value-based payment programs like the Oncology Care Model (OCM) have focused efforts to reduce costly acute care use through improvements in access and coordination rather than targeting the exponential rise in pharmaceutical pricing. We assessed how participation in OCM affected total cost of cancer care at a large academic cancer center. Methods: Using Medicare claims for Yale-Smilow Cancer Hospital, an NCI-designated cancer center with an academic hub and 10 community practices, we identified episodes for chemotherapy initiated during a historical period (pre-OCM, 2012-2015) and performance period (post-OCM, 2016-2017) following OCM criteria to identify total cost of care. We reported frequency of utilization categories, the mean cost per episode, the proportion of total cost attributed to each utilization category and compared pre- and post-participation periods. Results: There were 8,843 episodes during the historical period and 6,679 episodes during the performance period. The mean total cost per episode increased from $28,645 to $32,666, but this was less than the Medicare-defined expected increase (target price). Between the two periods, the percentage of total episodes decreased for emergency department (ED) use from 36% to 33%, inpatient care from 33% to 29%, and post-acute care from 28% to 25% (p < 0.01). Mean costs of drugs per episode increased by 27% between periods, and from 52% to 58% of total cost of care (p < 0.01). While mean cost per episode for ED, inpatient, and post-acute care remained stable, the mean cost per episode for antineoplastics increased 39% from $10,676 to $14,843. Conclusions: After implementing OCM, we beat the Medicare target largely by decreasing acute care use and stabilizing the cost of hospitalizations and ED; however, actual cost increased largely due to pharmaceutical spending. Because drug costs were the largest proportion of overall cost of care, future value-based models must address the rising cost of pharmaceuticals. [Table: see text]