Specialty Pharmacy

Featured Health Business Daily Story February 11, 2008

New Single-Specialty Company Targets Efficiencies Through Integrated Approach to Oncology Management

Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers manage costs more aggressively and deliver biotechs and injectables more effectively.

As costs for oncology care continue to rise while the industry remains somewhat fragmented, one company hopes to bridge the gap among the various segments in order to bring efficiency to oncology management.

One-year-old New Century Infusion Solutions (NCIS) bills itself as the only integrated single-specialty provider (ISSP) in the oncology market. Joseph Perez, CEO and founder of NCIS, tells SPN that this ISSP model exists in other areas of health care such as cardiology, but that NCIS is the first such company in oncology.

“Oncology is a very sensitive area and is very highly fragmented,” maintains Perez. This fragmentation, he says, leads to misaligned incentives among payers, medical oncologists and radiation therapists, and pharmacies. NCIS — which is owned by Perez and a few other investors, none of which are pharmaceutical companies or health plans, he says — offers comprehensive oncology management of all of these stakeholders.

According to Chris Nee, Pharm.D., chief operating officer of NCIS, the silo management that typifies the oncology industry puts insurers at risk of not knowing their member costs when it comes to specialty pharmaceuticals. As reported in the third annual edition of the EMD Serono Injectables Digest, published in April 2007, 22% of survey respondents did not know their per-member per-month cost for specialty pharmaceuticals covered under the pharmacy benefit, 39% did not know PMPM costs for those specialty drugs that fall under the medical benefit, and 33% did not know PMPM costs for specialty drugs under both benefits. Considering the costs of oncology drugs, which is one of payers’ highest- cost categories of drugs, insurers are under tremendous financial risk in the current environment.

Decrease in Time From Diagnosis to Therapy

According to Perez, NCIS’s approach reaps both short-and long-term dividends. He points to the “bureaucracy involved when someone is diagnosed with cancer,” where a patient navigates a maze of referrals and physicians. It might be 10 to 18 days from the initial diagnosis to the time a patient first receives treatment under this system, says Perez. But this “complicated nature, these details are what an ISSP is designed to address,” he says. Through NCIS, a patient will receive initial treatment in fewer than seven days from the diagnosis, says Perez.

“The earlier cancer is detected, the better the chances are of being treated correctly,” says Perez. “Some of the newer oncology agents prolong life by two or three months” and come at a tremendous financial cost, adds Nee. “If you catch the cancer earlier, there is more time to decide” the best treatment approach.

Many health plans’ medical directors are generalists, says Nee. They must “manage diseases from A to Z, and a lot [of the directors] are not up to date on the latest developments for treatments,” he says.

NCIS, though, employs hematologists, oncologists and radiation therapists as medical directors. Their knowledge and experience allows them to immediately review and approve referrals and therapy regimens, while simultaneously notifying the primary care provider and the specialist, says Nee.

As soon as the medical director approves the therapy, the order is processed in the NCIS pharmacy department. The company contracts with a handful of vendors to deliver the medication.

NCIS says it also pays claims in a timely manner. “Typically providers are paid within 30 days at best,” says Perez, and often the process is only getting started within that time. According to Perez, however, NCIS will pay the claims within 14 days.

NCIS brings the concepts of continuous quality improvement and evidence-based medicine to its management process, says Nee. “Our goal is to focus on getting patients treated in the most appropriate, clinical-based way,” he explains. This also involves identifying instances in which off-label use is clinically efficacious.

To give patients the most appropriate treatments, the company uses the following:

• Clinically accepted guidelines: The NCIS clinical team uses guidelines from associations such as the American Society of Clinical Oncology, the National Comprehensive Cancer Network and the American Society of Hematology to “look for the most efficient, effective way to provide care,” says Nee.
  
  
• Peer-to-peer review: A network of oncologists not directly employed by NCIS offers second-and third-level peer review should disagreements on therapy arise during the clinical team’s initial review. Patients’ care will continue throughout the process, says Nee, rather than stopping until the disagreements are resolved.
  
  
• Clinical trials: If patients don’t fit into any of the published protocols, says Nee, NCIS will get these patients into clinical trials so they can be treated this way.

Company Capitates Services

NCIS has a fully capitated arrangement with its clients, under which the cost is fixed for 12 months, says Perez. All of the oncology services fall under this agreement, and NCIS “guarantee[s] savings to our clients,” he says.

“Capitating oncology actually makes sense,” contends William Sullivan, principal consultant with Specialty Pharmacy Solutions LLC. “This has been tried in other specialties, and the proof of concept is already established.”

He adds that “capitating oncology pharmacy alone is a real crap shoot. Patient tumor type and severity are significant variables that impact drug choices and are therefore tough to predict. If you can’t predict accurately, your capitated rate probably won’t cover costs, and the model falls apart — not a good thing. You really need to take a comprehensive approach, such as proposed, to have a chance for success.”

NCIS launched in November 2006 with one client. While Perez says he cannot disclose the client’s identity, he does say that it is a south Florida subsidiary of a national HMO that has operations in three counties in that area. Perez says that the client is “looking to expand to the other two counties” in south Florida in which it has subsidiaries.

On Oct. 8, the company signed a contract with another national payer (which NCIS also would not identify) with three subsidiaries in the same area as the first client.

According to Sullivan, in capitating oncology, “one obstacle, and it’s a big one, is marketplace acceptance. Where the market seems to have no issue with capitating primary care services, it seems to be unable to embrace doing the same for specialists. In oncology, there is even greater resistance to change. However, change in oncology is inevitable, and breakthrough approaches are needed to create ‘win-win’ solutions for health plans and oncologists alike.”

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