Skip to main content


New Century Health Pathways Help Community Practice Reduce Drug Spending Within OCM

April 29, 2020

HertlerIn March 2020, Andrew Hertler, MD, FACP, chief medical officer, New Century Health (Brea, CA), and colleagues published an article in JCO Oncology Practice (online March 20, 2020; doi:10.1200/JOP.19.00753) that showed that use of New Century Health’s evidence-based clinical pathways could help a community-based practice reduce drug spending within the Oncology Care Model (OCM).

Journal of Clinical Pathways spoke further with Dr Hertler on the details of the study and whether the results may be reproducible in other similar practices hoping to lower their drug spending within the OCM.

Curbing drug costs has been the “white whale” for many practices looking to receive performance-based payments in OCM. What are some of the strategies that you are aware of that practices have tested to mitigate drug costs, and are the strategies different for community vs academic practices?

Dr Hertler: There is a good deal of variation in terms of strategies being used to mitigate drug costs. Some physicians in oncology care do not believe that we can control drug costs. While they cannot set unit costs, they do not believe that controlling utilization is a viable option either.

Therefore, participant efforts in the OCM model have largely been targeting a reduction in preventable hospitalizations, more availability of outpatient care, keeping people out of the ER (and subsequent decreased hospitalizations), and using palliative care at the end of life.

While I agree that controlling drug unit costs is not a realistic goal on the part of the providers, I believe that they have the ability to impact utilization. All one has to do is look in the NCCN guidelines for almost any clinical situation. There, you will often see multiple chemotherapy regimens to choose from. These regimens are not all equivalent, which is where clinical pathways can be useful; they can help determine the highest value regimen by first considering efficacy and toxicity, then factoring in cost.

In this vein, adopting clinical pathways as a way to mitigate high-cost drug utilization is a viable option for practices participating in OCM.

Some hospitals and academic centers are trying to control drug cost at the formulary level. By making certain drugs available and others not available, a practice could theoretically optimize their formulary to achieve success in a value-based model such as the OCM.

How has New Century Health embraced value-based pathways either in conjunction with or in lieu of prior authorization for practices’ oncology treatment decisions?

Dr Hertler: Since New Century Health was founded in 2002, we have been taking on risk in outpatient oncology – including the cost of cancer therapeutics. That is our business model – to be the holder of full risk for outpatient oncology care.

We believe that clinical pathways can be utilized to create value. Through utilization of our own pathways, we have consistently achieved savings up to 10% or 15% in terms of decreasing the cost of oncology pharmaceuticals.

New Century Health has typically paired pathways with a prior authorization process. Our pathways are all integrated in an online platform. As a user, if you utilize our pathways, you receive instant prior authorization. If you stray from our pathways, you will receive some questioning from us and encouragement to adhere to the pathways.

However, there are no prior authorizations required in the OCM. This is a fee for service Medicare model. As a result, we are forced to approach off-pathway use a bit differently.

What we did, as described in the paper, was virtually attend the group’s practice meeting every 2 weeks and go over instances in which physicians chose not to follow a pathway. We discussed these cases and went over the clinical evidence supporting the pathway. This was a completely voluntary effort designed to familiarize the physicians with the pathways and build their trust in them. Yet, it achieved results very similar to what we have achieved with a more formal prior authorization process, which was one of the most intriguing findings of all.

We found that an engaged practice that is adhering to the pathways is likely to achieve results that are very similar to what would have been achieved through a more obligatory prior authorization process.

Why was Cancer Care Specialists of Illinois (CCSI) chosen as the community oncology practice for the study?

Dr Hertler: Approximately 3 or 4 years ago, I spoke with James Wade, MD, of CCSI at the ASCO Annual Meeting. He told me that CCSI was participating  in the OCM. He knew that for New Century Health, taking on risk for oncology drugs was really nothing new; we had been doing it for a prolonged period of time.

New Century Health is hired by payers to put our pathways in place for practices. The payers capitate us for the risk. The intriguing question Dr Wade asked was whether New Century Health had the capability to develop a model that could be used by a practice participating in the OCM.

Thus, Dr Wade and I came to the agreement that CCSI would serve as our pilot. New Century Health would try to adapt its tools in a way that could be utilized in the OCM.

That is why the model was initially built with Dr Wade's practice. Currently, we have three practices that we are working with in the OCM.

This single-institution study demonstrated the potential for evidence-based clinical pathways to reduce oncology drug spending within a value-based care model. Were there any noteworthy limitations in the design or methods of the study that could have confounded the results?

Dr Hertler: The first and obvious limitation is exactly that – it was a single-institution study. It is now up to us to see if we can generalize the results to a broader number of practices. We are in the process of determining this now.

It is also worth noting that this was a very engaged practice with an engaged leader. This level of engagement is absolutely essential in terms of getting the physicians within the practice to use the pathways. You can roll out the greatest pathways in the world, but if physicians are not seeing them, then they are not going to use them to make their decisions. This was a voluntary model, and having an engaged leader was incredibly important. It was a prerequisite for any chance of success for them.

A third potential limitation of this study would be that CCSI’s baseline costs were relatively high compared with other OCM participants. We essentially brought them down to the median cost threshold. Therefore, it is imperative to consider what would happen if we started with a practice that was at or closer to the baseline. Could the practice still obtain improvement to the extent of CCSI?

The final limitation is that this was a real-life model with a lot of variables. Certainly, pathways were one element. But as we talked to CCSI about our pathways every couple of weeks, we would see them making broad decisions that were tangential from the pathways. An example was their use of zoledronic acid rather than denosumab for the treatment of bone metastases. The true drugs have almost identical efficacy, though zoledronic acid has considerably greater value. CCSI made the decision to have zoledronic acid be their formulary choice, except for patients with renal insufficiency.

A huge part of working with physicians within any kind of value-based arrangement is facilitating a behavior change in how they approach patients. Is that an indirect outcome of pathways? I am inclined to think so.

Back to Top