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The MD Anderson Manual of Medical Oncology, 4e

Chapter 71: Value­Based Oncology

Casey J. Allen; Aileen Chen; Ryan W. Huey; Ya­Chen Tina Shih

KEY CONCEPTS

As the demand to curb costs and improve the quality of cancer care increases, cancer care delivery should align with patients' value and
preference.

Value assessment is of paramount importance to the delivery of value­based cancer care effectively and efficiently.

There are evolving value­based practices specific to the fields of medical, radiation, and surgical oncology.

To serve the need for value assessment in today's health care environment, there is ongoing development of various value frameworks.

Management science and health economics and outcomes research both contribute to value assessment frameworks.

Our ability to effectively communicate value will facilitate shared decision making among all stakeholders involved in value­based health care.

OVERVIEW OF VALUE­BASED HEALTHCARE

As projections indicate that healthcare spending will account for nearly one­fifth of the Gross Domestic Product in the United States in 2021, the rate at
which healthcare costs are growing will limit our country's growth and possibly even bankrupt the nation.1 Cancer care in particular is of great concern
because of its relatively high costs to deliver treatment. Furthermore, cancer care costs are expected to grow 40% from 2010 to a projected $175 billion
in 2020.2

The rising cost of cancer care impacts many stakeholders including patients and their families, providers, payers, and manufacturers. If the costs of
cancer care continue to rise unchecked, it will be become unaffordable for many Americans—a concern raised by an Institute of Medicine (now
National Academies of Sciences, Engineering, and Medicine) consensus study in 2013.3 Financial hardship, or financial toxicity, describes the impact of
direct and indirect healthcare costs that lead to significant financial burden for patients and their caregivers, resulting in increased psychosocial
distress, worse outcomes, and poorer quality of life (QOL).4,5 In addition, as specialized cancer care continues to become more centralized, one well­
recognized disadvantage is the limited access to high­quality care in patients with low socioeconomic status.6–8 Barriers to access treatment may
impact patient­centric outcomes.

Moreover, there is now widespread recognition that high­cost care does not necessarily translate into high­quality care or improved outcomes. The
per capita healthcare spending in the United States far exceeds that in other developed countries, yet when juxtaposed against life expectancies, it is
clear there is a great deal of wasted expense in our healthcare system.9

As the demand to curb costs and improve quality increases, there is a societal consensus that healthcare should be more greatly assessed on value.
Thus, the United States healthcare system is now in the midst of transitioning to a value­incentivized system.10 As policymakers and those covering the
costs (insurers and patients) seek ways to assure the best use of limited resources, they are turning to business leaders, physicians, and health
economists for a better understanding—and definition—of value. There is a growing understanding that true healthcare reform will require major
strategic and organizational changes in the way healthcare is actually measured, delivered, and reimbursed.11,12 Also, because the federal government
and individual states are beginning to mandate insurers and providers to improve price transparency by offering patients information about their
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Chapter 71: Value­Based Oncology, Casey J. Allen; Aileen Chen; Ryan W. Huey; Ya­Chen Tina Shih Page 1 / 19
with their value and preference.
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CONCEPTUAL FRAMEWORK OF VALUE ASSESSMENT

As the demand to curb costs and improve quality increases, there is a societal consensus that healthcare should be more greatly assessed on value.
Thus, the United States healthcare system is now in the midst of transitioning to a value­incentivized system.10ofAsSciences
Mohammed VI University and Health
policymakers ­ UM6SS
and those Library
covering the
costs (insurers and patients) seek ways to assure the best use of limited resources, Access
they are turning
Provided by: to business leaders, physicians, and health
economists for a better understanding—and definition—of value. There is a growing understanding that true healthcare reform will require major
strategic and organizational changes in the way healthcare is actually measured, delivered, and reimbursed.11,12 Also, because the federal government
and individual states are beginning to mandate insurers and providers to improve price transparency by offering patients information about their
healthcare costs,13 patients will likely want to be more actively engaged in their interactions with clinicians to ensure that the treatment choice aligns
with their value and preference.

CONCEPTUAL FRAMEWORK OF VALUE ASSESSMENT

Value Assessment from Management Science Approach

The value­based healthcare movement is based on the work of leading authorities on competitive business strategy Michael E. Porter and Elizabeth O.
Teisberg. Their landmark book, Redefining Health Care Creating Value­Based Competition on Results,14 was published after more than a decade of
research into why the healthcare industry failed to conform to the standard economic principles of competition. They described how healthcare had
fallen into dysfunction as providers competed for the wrong things. Value­based healthcare's central tenet is that value for patients must be the
overarching principle in the organization and management of healthcare delivery systems.

The Value Equation

As originally proposed by Porter and Teisberg, “value” for patients is determined by assessing the relationship between the outcomes that matter to
them and the cost incurred to deliver those outcomes across the full cycle of care.14 To capture the multiple dimensions of a patient's health, they
proposed the concept of a three­tiered outcome measures hierarchy.14,15 This hierarchy highlights the importance of survival but also accounts for
degree of recovery, time to recovery, harm caused during treatment, recurrences, and long­term consequences of care.

The Expanded Value Equation

Adhering to Porter's principles, MDACC has favored a definition that integrates the outcomes component of the value framework with traditional
quality, safety, and patient experience measures.16 Our detailed equation incorporates the dimension of time by including short­term complications
with long­term disability, and both early and late survival with functional recovery. It also expands the definition of cost to include the costs to both
payers and patients. As depicted in Equation (1), our value equation includes components specified to metrics of quality (survival, functional recovery,
experiences); harm/safety (complications, pain, disability); and/or cost (patient­borne, third­party payer, institutional).

EQ(1)

Value Assessment from Health Economics and Outcomes Research Approach

Recognizing the urgent need for better understanding and assessing value in today's healthcare environment, the International Society for
Pharmacoeconomics and Outcomes Research (ISPOR), a leading organization in health economics and outcomes research (HEOR), formed a Special
Task Force on Value Assessment in 2016.17 A series of reports from this ISPOR Special Task Force, alone with other articles covering the conceptual,
theoretical, empirical, and practical aspects of value assessment, were published in a themed issue in Value in Health in 2018.18 In this section, we
provide a broad overview of value assessment from the HEOR approach. Readers who are interested in deeper learning on this topic are encouraged to
read this themed issue.

Elements of Value

The biggest challenge in value assessment is to define “value” because the word is inherently subjective and multifaceted. HEOR experts acknowledged
12 elements of value: (1) quality­adjusted life­years (QALYs); (2) net costs; (3) productivity; (4) adherence­improving factors; (5) reduction in
uncertainty; (6) fear of contagion; (7) insurance value; (8) severity of disease; (9) value of hope; (10) real option value; (11) equity; and (12) scientific
spillovers.19 QALY is a measure that weighs life­years (LYs) gained from interventions with health utility associated with various health states in that
duration, with weight 1.0 giving to perfect health and 0 to death. Net costs refer to the additional (or incremental) cost associated with a new
intervention compared with alternative(s)—often the current standard of care. QALYs and net costs are the two value elements most commonly found
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in value assessment in HEOR because they form the basic components of cost­effectiveness analysis (CEA). Productivity captures health­related work
Chapter 71: Value­Based Oncology, Casey J. Allen; Aileen Chen; Ryan W. Huey; Ya­Chen Tina Shih Page 2 / 19
impairment and consists of two components: absenteeism and presenteeism. The former quantifies
©2025 McGraw Hill. All Rights Reserved. Terms of Use • Privacy Policy • Notice • Accessibility time absent from work because of illness,
whereas the latter measured reduction in the quality of work performed when coming to work while sick.20 Adherence­improving factors reflect value
through improving health outcomes as a result of better adherence to treatment, which can be achieved with certain product features (eg, switch
The biggest challenge in value assessment is to define “value” because the word is inherently subjective and multifaceted. HEOR experts acknowledged
Mohammed
12 elements of value: (1) quality­adjusted life­years (QALYs); (2) net costs; (3) productivity; VI University of Sciences
(4) adherence­improving factors;and
(5) Health ­ UM6SS
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uncertainty; (6) fear of contagion; (7) insurance value; (8) severity of disease; (9) value of Provided
Access hope; (10)
by: real option value; (11) equity; and (12) scientific

spillovers.19 QALY is a measure that weighs life­years (LYs) gained from interventions with health utility associated with various health states in that
duration, with weight 1.0 giving to perfect health and 0 to death. Net costs refer to the additional (or incremental) cost associated with a new
intervention compared with alternative(s)—often the current standard of care. QALYs and net costs are the two value elements most commonly found
in value assessment in HEOR because they form the basic components of cost­effectiveness analysis (CEA). Productivity captures health­related work
impairment and consists of two components: absenteeism and presenteeism. The former quantifies time absent from work because of illness,
whereas the latter measured reduction in the quality of work performed when coming to work while sick.20 Adherence­improving factors reflect value
through improving health outcomes as a result of better adherence to treatment, which can be achieved with certain product features (eg, switch
medications from twice daily to once daily) or technologies (eg, MEMS® Cap device). In the context of oncology value assessment, all four value
elements discussed above are important to consider.

The remaining eight elements of value are relatively underexplored in the HEOR literature; several are especially relevant in the discussions of value­
based oncology. For example, the value of an intervention can be enhanced by reducing uncertainty in outcomes (element #5) with the use of tests or
algorithms to identify subgroups most likely to benefit from an intervention (eg, pharmacogenomic tests to better differentiate responders and
nonresponders of certain chemotherapy regimens or risk­stratified screening strategies). Severity of disease (element #8) debates whether the value
of an intervention differs by the severity of disease intended for the intervention, raising the question of whether higher values should be placed on
end­of­life care or treatment of late­stage cancers. Value of hope (element #9) is especially relevant when comparing values between two oncology
products: a high­risk treatment with a small chance of achieving large survival benefit versus a lower­risk treatment with moderate survival benefit.
Real option value (element #10) refers to the situation in which life extended from a treatment creates an opportunity for patients to benefit from
treatment advances in the future. With a large pipeline of oncology products, this value element is particularly meaningful. Indeed, research has found
that the inclusion of option value increases the value of treatment for chronic myeloid leukemia by 10%.21 The other elements are equally applicable to
oncology as well as other diseases. Interestingly, fear of contagion (element #6) is traditionally thought to be more relevant to infectious diseases and
less relevant to oncology. However, current experience with a highly contagious virus like Covid­19 sounded the alarm that value assessment of
oncology may need to consider the overall public health environment and how cancer care interacts with other diseases in such an environment.

Methods to Quantify Value

The ultimate goal of value assessment is to assist stakeholders in making informed decisions. The transition from “value framework” to “decision
making” requires methods that synthesize and quantify information into a metric useful to decision makers. Two commonly used approaches to
generate such metric is CEA and multicriteria decision analysis (MCDA).

Cost­Effectiveness Analysis

CEA summarizes study findings in terms of the incremental cost­effectiveness ratio (ICER).22,23 The ICER, as shown in Equation (2) below, estimates the
additional resource consumption needed to achieve an increase in an additional unit of effectiveness, often measured by LYs saved or QALYs gained.

EQ(2)

Incremental cost, the numerator of ICER, calculated the difference in the mean cost of the new treatment and that of the old (existing) treatment.
Incremental effectiveness, the denominator of ICER, is the difference in the mean effectiveness of the new treatment and that of the old treatment. The
ICER is then compared with a threshold value; an intervention is considered cost­effective if the ICER is below the threshold value. Although many
countries have explicitly specified the threshold value acceptable for the new treatment,24 there is no threshold value published by the US government.
A survey of medical oncologists in the US and Canada indicated that the majority of oncologists considered $100,000/QALY an acceptable threshold
value.25 A review of economic evaluation methods in the context of oncology can be found in an article published in CA: A Cancer Journal for Clinicians
in 2008.26 More recently, researchers have extended the conventional CEA to incorporate broader topics of interest to health policymakers, such as
equity, distributional benefits, and financial protections.27,28

The value equation proposed by Porter and Teisberg14 resembles the concept of average cost­effectiveness ratio (ACER) in the HEOR literature. The
ACER quantifies the average cost per effect for an intervention, whereas ICER emphasizes the concept of incremental efficiency that captures the
additional costs consumed to gain an additional unit of effectiveness. It is generally agreed in the HEOR literature that ICER is supported by economic
theories and better reflects the nature of decision making in that decision makers often determine the value of a new treatment by comparing its
improvement in outcomes as well as the additional costs with the existing treatment. It has been documented that ACER can lead to the wrong choice in
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healthcare decision making.29
Chapter 71: Value­Based Oncology, Casey J. Allen; Aileen Chen; Ryan W. Huey; Ya­Chen Tina Shih Page 3 / 19
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Multicriteria Decision Analysis
 Mohammed
The value equation proposed by Porter and Teisberg14 resembles the concept of average VI Universityratio
cost­effectiveness of Sciences
(ACER) inand
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HEOR literature. Library
ACER quantifies the average cost per effect for an intervention, whereas ICER emphasizes the concept
Access Provided by: of incremental efficiency that captures the
additional costs consumed to gain an additional unit of effectiveness. It is generally agreed in the HEOR literature that ICER is supported by economic
theories and better reflects the nature of decision making in that decision makers often determine the value of a new treatment by comparing its
improvement in outcomes as well as the additional costs with the existing treatment. It has been documented that ACER can lead to the wrong choice in
healthcare decision making.29

Multicriteria Decision Analysis

One of the key requirements in CEA is to explicitly specify the study perspective, with societal perspective being the preferred choice.30 However, this
single­metric approach creates a challenge for decision makers to incorporate the viewpoints from multiple stakeholders simultaneously. MCDA is an
emerging approach in HEOR that offers an analytical framework to explicitly incorporate the subjective and multidimensional features of value into
decision making.31 MCDA involves four key steps to prepare the data for decision makers. First, researchers need to determine the elements of value to
be considered. For example, the value elements for oncology care may include median survival, progress­free survival, toxicity profile (eg,
nausea/vomiting, anemia, febrile neutropenia), pain, anxiety, total cost of treatment, and out­of­pocket cost for patients, among others. The next step
is to define the boundary values for each of these value elements or “attributes.” For some attributes, it is obvious that the boundary values would
have to be confined within a range that meets the statistical property of that attribute, such as probabilities are bound between [0,1] range. For other
attributes, such as costs, the boundary values are less obvious and will rely on additional research to determine these values. Next, scores need to be
assigned to each attribute based on each patient's preference through some forms of value function. The last step is to solicit weights for each
attribute. One approach is to simply ask stakeholders to rank order the attributes and convert the ranking into weights using methods such as the rank
order centroid method.31 For ease of illustration, assume that there are three treatments (X, Y, and Z), three patients (A, B, and C), and three attributes:
probability of 5­year survival, probability of severe side effects, and costs. Using the rank order centroid method and in the case of three attributes, the
weight for each attribute, ranked by the order of importance, is calculated as (1+1/2+1/3)/3 (~0.61), (1/2+1/3)/3 (~0.28), and (1/3)/3 (~0.11),
respectively.

After completing the first two steps described above, results can be summarized in the input table for MCDA (Table 71–1A), followed by soliciting
preference scores for each patients (Table 71–1B). A patient's value for each treatment can then be calculated by taking the weighted average across
attribute values (Table 71–1C). As an emerging method, many methodological details of MCDA are still under development, such as the scoring
algorithm for the attributes and the weighting methods. The most critical issue is the decision rule to determine which treatment/intervention yields
highest “value” at the population level. As shown in Table 71–1C, although the treatment choice of each patient is clear, the best choice for the society
as a whole may not be obvious. Readers who are interested in learning more about MCDA are recommended to read the task force reports by ISPOR
MCDA Emerging Good Practices Task Force.32,33

Table 71–1
Example of Multicriteria Decision Analysis

A: Inputs of MCDA

Attributes

5­year survival prob Prob. of side effect (0–1) Cost

(0–1) ($5000–$300,000)

Treatment option Treatment attribute values

X 0.8 0.7 $30,000

Y 0.6 0.4 $10,000

Z 0.2 0.1 $5,000

Patient Patient rankings (weights) of attribute

A 1 (0.61) 2 (0.28) 3 (0.11)

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Chapter 71: Value­Based Oncology, BCasey J. Allen;
2 (0.28) 3 (0.11)Tina Shih
Aileen Chen; Ryan W. Huey; Ya­Chen 1 (0.61) Page 4 / 19
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C 3 (0.11) 1 (0.61) 2 (0.28)
 Z 0.2 0.1 $5,000
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Patient Patient rankings (weights) of attribute

A 1 (0.61) 2 (0.28) 3 (0.11)

B 2 (0.28) 3 (0.11) 1 (0.61)

C 3 (0.11) 1 (0.61) 2 (0.28)

B: Preference score for Patient A–C

Attributes

Treatment Option 5­year survival prob (0–1) Prob. of side effect (0–1) Cost
($5,000–$300,000)

Patient A

X 80 20 30

Y 40 30 20

Z 20 40 10

Patient B

X 40 10 10

Y 30 20 50

Z 20 30 80

Patient C

X 60 10 30

Y 55 65 48

Z 10 70 50

C: Patient Value by Treatment Option

Treatment X Treatment Y Treatment Z

Patient A 57.7 35 24.5

Patient B 18.4 41.1 57.7

Patient C 21.1 59.14 57.8

Note: For each patient, the bold entry marks the treatment option that yields the highest value for the patient.

Value Assessment in Oncology

Cancer care is an opportune context in which to target value­based healthcare delivery. As clearly stated by the President of the American Society of
Clinical Oncology (ASCO) in 2014, Dr Clifford A. Hudis: “In oncology, we face the fascinating challenge of determining the value of today's cancer
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treatments….What is the worth
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issues with courage, compassion, and integrity.”34
 Note: For each patient, the bold entry marks the treatment option that yields the highest value for the patient.
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Access Provided by:
Value Assessment in Oncology

Cancer care is an opportune context in which to target value­based healthcare delivery. As clearly stated by the President of the American Society of
Clinical Oncology (ASCO) in 2014, Dr Clifford A. Hudis: “In oncology, we face the fascinating challenge of determining the value of today's cancer
treatments….What is the worth … of three or four more weeks of time … relative to the cost and side effects of the treatment? … The answers to these
kinds of questions may vary widely among different patients, families, health­care providers, and communities, but we must confront these difficult
issues with courage, compassion, and integrity.”34

Value assessment is of paramount importance to the delivery of value­based cancer care effectively and efficiently. Despite the desire to transition into
a value­driven system, our capability of quantifying value is in flux and there had been no objective way to quantify and communicate the many
outcomes and cost components of value to patients, stakeholders, or healthcare providers. For these reasons, frameworks have been developed to
provide a comprehensive measure of healthcare value.

Value frameworks have gained broader use in the field of oncology. The benefits of new and promising therapies might not necessarily be uniformly
distributed. When considering a cancer treatment—especially one that could financially imperil a patient—a value framework has become critically
important. This environment of increasing costs of drugs and healthcare services (and increased patient cost sharing) versus inconsistent benefits
propelled the development of various cancer­focused value frameworks. Herein we detail some existing value frameworks in oncology, and propose
the advantages of new, theoretical models.

The American Society of Clinical Oncology Value Framework

ASCO has proposed assigning a numeric score, Net Health Benefit (NHB), to cancer treatments based on an assessment of their clinical benefit, side
effects, associated symptoms, effect on QOL, and costs.35 The framework determination, on the basis of consensus among framework developers, is
weighted most heavily by clinical benefit, with overall survival being the most important, progression­free survival less important, and response rate
the least important. The framework also includes bonus points for extended survival to reflect “tail of the curve” survival for those therapies that
benefit only a meaningful minority, but that help those few patients tremendously. Toxicity is included as a liability and detracts from the clinical
benefit. Finally, the patient's out­of­pocket costs (a major source of financial toxicity) are also included in the value framework.

The National Comprehensive Cancer Network Evidence Blocks

The National Comprehensive Cancer Network Evidence Blocks (NEB) proposed by the National Comprehensive Cancer Network (NCCN) presents
assessments of treatments as a visual matrix.36 Guided by staff from the NCCN, in consultation with the group's members, their approach uses a
standardized scale to provide consensus­based scoring of efficacy, safety, quality of evidence, and costs of a particular treatment. Each of the five
measures in the NCCN's approach is displayed as a solid block using a scale from 1 to 5, where 1 is considered least favorable and 5 is most favorable.
An example of the NEB is depicted in Fig. 71–1. Here we provide a theoretical comparison of “Drug A” versus “Drug B.” “Drug A” scores better on
efficacy and quality of evidence; however, “Drug B” scores better on safety and affordability. The total “score” for “Drug A” is 15 and the total “score”
for “Drug B” is 16, thus inferring “Drug B” is the superior choice. However, if a patient or provider seeks the more efficacious drug (over safety and
affordability), “Drug A” may be the preferred treatment. Therefore, although the NEB creates a robust comparison, the preference of the stakeholder is
not incorporated into the comparative capabilities of the framework.

FIGURE 71–1

Example of NCCN Evidence Blocks (NEB), comparison of “Drug A” versus “Drug B".

Here we reference other existing value frameworks in oncology including Memorial Sloan Kettering Cancer Center's DrugAbacus tool,37 the Institute for
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Clinical
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Novel Framework with Use of Radar Charts

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Here we reference other existing value frameworks in oncology including Memorial Sloan Kettering Cancer Center's DrugAbacus tool,37 the Institute for
Clinical and Economic Review's Value Assessment Framework,38 and the European Society for Medical Oncology (ESMO)'s Magnitude of Clinical Benefit
Scale.39

Novel Framework with Use of Radar Charts

To address limitations of existing value frameworks, and to promote adoption through a more robust tool, a group of investigators at MDACC have
developed a novel, alternative framework to visualize and communicate value. With so many individual components in the value equation, we found
that data visualization is absolutely crucial to all stakeholders. A radar chart is a graphic method of displaying data in which quantitative variables are
represented on multiple axes. The simple radar chart is a practical tool with which to improve shared decision making between stakeholders because it
provides clinicians, patients, administrators, and policymakers with a readily understandable snapshot that can facilitate value assessment. At MDACC,
we have embraced the utility of radar charts as a novel framework to effectively measure and communicate value,40 most recently reporting how the
implementation of clinical care pathways for patients undergoing pancreatectomy provides an overall value advantage by improving several metrics
(Fig. 71–2).41

FIGURE 71–2

Radar chart comparing value before and after implementation of risk­stratified clinical care pathways for patients undergoing pancreatectomy for
pancreatic adenocarcinoma. Post­implementation metrics are displayed using relative change from an index value. Blue depicts quality metrics, green
depicts cost metrics, and orange depicts harm/safety metrics. (Reproduced with permission from Allen CJ, Thaker NG, Prakash L, et al: Communicating
Value: Use of a Novel Framework in the Assessment of an Enhanced Recovery Initiative, Ann Surg 2021 Jan 1;273(1):e7­e9.)

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Although each
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for real­world evidence, the relation of cost to affordability, ability to accurately estimate costs, transparency regarding the quantification process, and
the framework's applicability to individual decision making.
Radar chart comparing value before and after implementation of risk­stratified clinical care pathways for patients undergoing pancreatectomy for
Mohammed VI University of Sciences and Health ­ UM6SS Library
pancreatic adenocarcinoma. Post­implementation metrics are displayed using relative change from an index value. Blue depicts quality metrics, green
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depicts cost metrics, and orange depicts harm/safety metrics. (Reproduced with permission from Allen CJ, Thaker NG, Prakash L, et al: Communicating
Value: Use of a Novel Framework in the Assessment of an Enhanced Recovery Initiative, Ann Surg 2021 Jan 1;273(1):e7­e9.)

Although each of the value frameworks discussed above has targeted patients, physicians, and/or payers using a unique interpretation of value, the
relevance of each of the frameworks to stakeholders will depend on their adoption. Factors that may drive framework adoption include appreciation
for real­world evidence, the relation of cost to affordability, ability to accurately estimate costs, transparency regarding the quantification process, and
the framework's applicability to individual decision making.

Limitations of How We Currently Assess Value

Despite the major advancement in value assessment, there remain multiple limitations to how we effectively assess total value. The ASCO NHB score is
useful, but the extent to which value can be summarized by a single number using data generated across multiple dimensions is unclear. Furthermore,
there is currently no reason to believe that total value would be accurately represented by the linear sum of such metrics. The NEB from the NCCN
attempts to address these limitations by quantifying consensus­based scores of various value elements, but it does not provide a final summation
directly from data that reflect stakeholders' differential preferences across value elements. Neither the NCCN's nor the ASCO's framework is optimized
to allow visualization of value from the perspective of different stakeholders. The radar chart may be different in that it facilitates intuitive
understanding of value differences through robust graphic depiction of actual data across multiple metrics and can compare alternate processes
within a single figure. Still, future research is needed to guide not only the selection of metrics used by different stakeholders, but also how
stakeholders' preferences may be reflected into more aggregate indexes of value.

There are also important limitations to our current abilities to quantify many domains considered in value assessment, although several domains can
be measured using data readily available in electronic health records, registries, hospital billing records, and/or insurance claims. However, other
metrics—especially patient­reported outcomes (PROs) such as pain measures, functional outcomes, QOL, and measures of financial toxicity—are not
routinely available. Also challenging is the ability to accurately estimate out­of­pocket expenses given the sophistication of insurance benefit designs
and the complexity of cancer care.42
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Chapter 71: Value­Based
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often
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the beginning of treatment. For many cancers, it can take many years to observe outcomes such as survival and long­term treatment­related toxicities,
and by that time treatment has been administered and paid by payers and patients. This suggests the need to incorporate long­term outcomes data as
 Mohammed
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although ­ UM6SS
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metrics—especially patient­reported outcomes (PROs) such as pain measures, functional outcomes, QOL, and measures of financial toxicity—are not
routinely available. Also challenging is the ability to accurately estimate out­of­pocket expenses given the sophistication of insurance benefit designs
and the complexity of cancer care.42

For practical reasons, many value assessments are assessing process measures, and the assessment often takes place at a snapshot in time, often at
the beginning of treatment. For many cancers, it can take many years to observe outcomes such as survival and long­term treatment­related toxicities,
and by that time treatment has been administered and paid by payers and patients. This suggests the need to incorporate long­term outcomes data as
one of the metrics in value assessment. Finally, many factors beyond the control of providers can contribute to outcomes such as survival and financial
toxicity; these factors introduce uncertainties in value assessment. How to address uncertainties is an underexplored area in value assessment and
value communication.

Opportunities and Challenges of Using Administrative Claims Data to Aid Value Assessment

With the rising importance of data­driven decision making, administrative claims data are emerging as valuable tools in assessing value in hopes of
improving healthcare delivery. These data sets provide the information from which companies including US News & World Report43 and The Leapfrog
Group44 rank and compare hospitals across the country. In addition to private groups, the Center for Medicare and Medicaid Services (CMS) is working
in collaboration with consumers, hospitals, doctors, employers, accrediting organizations, and other federal agencies to develop Hospital Compare, a
publicly available data source informing the quality of care of more than 4000 Medicare­certified hospitals across the country.45 Multiple stakeholders
can utilize Hospital Compare to identify and compare the value of their own care delivery.

These administrative data sets are available from a myriad of sources including hospitals, payers, data organizations, departments of health, and
federal agencies, and can act as tools to identify areas in which to improve healthcare delivery. Many quality measures are created using hospital
administrative discharge data. Administrative claims data make it possible to identify individuals or cohorts who meet specific inclusion/exclusion
criteria, define episodes of care, estimate costs, measure outcomes,46 and present advantages over other data sources (eg, single­institution data,
trials or surveys) because of its larger sample size, completeness, and availability. For inpatient care, these data provide patient demographics,
diagnoses, procedures, discharge status, length of hospital stay, as well as estimated hospital costs, charges, and patient out­of­pocket payments; and
they have been shown to be more accurate than data collected through qualitative means.47 This can help providers access complete, accurate, and
longitudinal clinical data along the care continuum. Quality experts regard claims data as a reliable and usable source for the purpose of assessing
hospital quality.37 For cancer care overall, the linked Surveillance, Epidemiology, and End Results Program (SEER)­Medicare data offer unique
opportunities to examine treatment patterns, costs, and outcomes for Medicare beneficiaries diagnosed with cancer.48

Despite the reliability and widespread uses of claims data, they also have important limitations. Administrative data are primarily used to support the
billing process and often do not contain detailed clinical information, thus lacking important value measures. Long­term survival is not available in
some administrative claims data, especially those from private insurance companies. PROs including pain measures, functional outcomes, and QOL
are not available, regardless of the source of claims. There is also no formal system to accurately report costs of care to all stakeholders. Although we
have a partial surrogate for payer and patient costs through variables of charges and/or payments, the majority of the financial burden (financial
toxicity) of treatment is not currently measured. Some major organizations are already making these realizations. For example, the Oncology Care First
Model, as recently proposed by CMS, mandates hospitals to collect PROs along with all other outcome and cost metrics.40

As we continue to use administrative claims data in our assessment of value­based healthcare, we need to emphasize the importance of collecting and
reporting more long­term and patient­centric outcomes.

Future Endeavors

The ultimate goal of these efforts is to engage patients, caregivers and providers with data to make informed decisions regarding their care. Cancer
treatment can often be physically taxing, emotionally draining, and financially toxic to patients. Bringing the patient into the conversation about their
care allows treatment to be reframed from the patient's perspective based on their value, preference, and priorities in life. To the extent that patients
are increasingly engaged in their healthcare,41 it is critical that the patient perspective is accurately reflected by any value measurement. By also
communicating value in a manner that is accessible to all stakeholders, better decision making will aid in the continual effort to deliver better value to
patients.

Thus, in order to enhance the value of care, interventions should aim at improving end points that matter to patients. Gathering reliable and valid QOL
data, designing patient preference studies that use reliable and generalizable methods, and using the results to develop decision aids for shared
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decision­making strategiesOncology,
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Casey J. going
Allen; forward.
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Until we have access to multiple disparate outcomes, each measured routinely and reliably, it will be difficult to assess the total value of any care
process. As we develop better data, our ability to effectively communicate value will facilitate shared decision making among all stakeholders involved
are increasingly engaged in their healthcare,41 it is critical that the patient perspective is accurately reflected by any value measurement. By also
Mohammed VI University of Sciences and Health ­ UM6SS Library
communicating value in a manner that is accessible to all stakeholders, better decision making will aid in the continual effort to deliver better value to
Access Provided by:
patients.

Thus, in order to enhance the value of care, interventions should aim at improving end points that matter to patients. Gathering reliable and valid QOL
data, designing patient preference studies that use reliable and generalizable methods, and using the results to develop decision aids for shared
decision­making strategies are recommended going forward.

Until we have access to multiple disparate outcomes, each measured routinely and reliably, it will be difficult to assess the total value of any care
process. As we develop better data, our ability to effectively communicate value will facilitate shared decision making among all stakeholders involved
in value­based healthcare.

VALUE­BASED ONCOLOGY IN PRACTICE

Value­Based Practice in Medical Oncology

As the cost of oncology drugs continues to increase, the notion of value­based care has become increasingly important. Historically, data on survival
and QOL have been the most important factors in the choice of systemic therapies. However, financial toxicity has been increasingly recognized as an
important factor for patients.49

Efforts to promote value­based care in medical oncology have centered on physician­patient conversations about cost, drug pricing and
reimbursement models, standardization of practice patterns, and the elimination of low­value care.

Price Transparency/Conversations About Cost

Attitudes surrounding discussing the cost of cancer care differ among patients and oncologists. The majority of patients are interested in discussing
costs of cancer care, but oncologists are less comfortable with these conversations.50 Although cost communication is recognized by the ASCO Cost of
Cancer Care Guidance Statement51 and the Institute of Medicine Committee on Improving the Quality of Cancer Care3 as an essential component for
high­quality cancer care, a recent review article showed low prevalence of cost communication reported by patients and physicians (27% and 47%,
respectively).52 In addition, some oncologists consider the value of a treatment only if it poses a significant financial burden to the patient.53 However,
these conversations remain important, because financial toxicity has important implications not only for a patient's QOL, but data suggest some
patients skip doses of oral chemotherapy to reduce the burden of prescription refills or copayments, which could ultimately compromise the efficacy
of a treatment.54 Furthermore, the lack of price transparency both to patients and providers remains a substantial barrier, because this information is
crucial for informing patient­provider discussions.42,55 Recent public policy has focused on making the prices of cancer treatment services available to
patients, but a lack of standardization has made it difficult to interpret such data, and more work is needed to provide value to patients.56

Drug Pricing

Although one may expect the introduction of competitor drugs or generic drugs to result in lower prices, in oncology this is not necessarily the case,
and the opposite is often true.57 In fact, studies exploring the drug prices of targeted oral anticancer medications have reported a trend toward not
only higher prices at launch over time but also a sustained increase in prices post­launch.58–60 Health policy plays a role in drug pricing, because
Medicare is required to cover drugs approved by the Food and Drug Administration but is not allowed to negotiate drug prices. Reimbursement
structures are also important for drug pricing, and the notion of value­based drug pricing has gained momentum in recent years. Value­based drug
pricing is a concept that centers around tying the price of a drug to its efficacy or outcomes for a specific indication.61 For instance, some have
suggested that if a drug has multiple indications for use (eg, in multiple cancers), then its price should be tied to the clinical benefit it provides to a
specific set of patients. Another proposed payment model is outcomes­based, in which a pharmaceutical company only receives reimbursement for a
drug if the patient has a favorable outcome. CMS explored using outcomes­based pricing for the chimeric antigen receptor T­cell therapy Kymriah, but
ultimately suspended the payment deal before launch.62 Future efforts by policymakers and payers will continue to focus on innovative payment and
drug reimbursement models.

Value Pathways and Drug Formularies

Standardization of physician practice patterns has emerged as an important method to improve quality and reduce cost. In oncology, providers and
payers are increasingly using clinical pathways.63 These clinical pathways use a variety of tools to promote guideline­concordant, evidenced­based
care. One component typically involves a committee of experts in a field who review clinical benefit, toxicities, and cost of drugs to develop
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providers in making clinical decisions, providing education and recommendations at the point of care. Clinical pathways have been demonstrated to
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reduce costs while maintaining or improving outcomes.64,65
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Access Provided by:

Standardization of physician practice patterns has emerged as an important method to improve quality and reduce cost. In oncology, providers and
payers are increasingly using clinical pathways.63 These clinical pathways use a variety of tools to promote guideline­concordant, evidenced­based
care. One component typically involves a committee of experts in a field who review clinical benefit, toxicities, and cost of drugs to develop
recommendations and/or algorithms. A common second component is a decision­support tool with electronic health record integration that assists
providers in making clinical decisions, providing education and recommendations at the point of care. Clinical pathways have been demonstrated to
reduce costs while maintaining or improving outcomes.64,65

Drug formularies can also play an important role in the utilization of drugs and in some instances can affect pricing as well. A notable example was
highlighted in an op­ed in The New York Times by a group of physicians at Memorial Sloan Kettering Cancer Center who detailed a new cancer drug
that had similar efficacy and mechanism of action to other drugs but was more than twice the cost.66 This gained significant attention and criticism
directed at the pharmaceutical company, which subsequently announced a price reduction for the drug.67 Drug formularies are important for helping
to determine the utilization of a drug, but price reductions based on well­publicized articles in the media are the exception rather than the norm.

Choosing Wisely

In 2012, the Choosing Wisely initiative was launched by the American Board of Internal Medicine Foundation in partnership with several specialty
societies, with the goal of helping reduce waste in the US healthcare system.68 ASCO was one of the specialty societies to join this initiative, and over
the next 2 years created a Top 10 List of “Things Physicians and Patients Should Question,” identifying and discouraging the use of low­value tests and
interventions for patients with cancer.69,70 Of these 10 items, four relate to the use of imaging, three address indications for chemotherapy, two focus
on supportive care medicines such as antinausea drugs or hematopoietic growth factors, and one discusses cancer screening. The goal of the
Choosing Wisely initiative is not to restrict necessary and appropriate care, but rather to highlight evidence and educate physicians and patients
regarding the use of low­utility tests and interventions.

Value­Based Practice in Radiation Oncology

Radiation oncology represents approximately 4% of overall cancer spending and, similar to overall cancer spending, increased by 62% from 2004 to
2014.71 The primary drivers of radiation cost from the payer's perspective include: (1) costs associated with radiation technologies used, and (2)
number of radiation treatments delivered. Furthermore, there can be downstream costs associated with radiation, including management of toxicities
from treatment. In addition to direct costs of care, patients may also incur substantial costs from daily radiation treatments, such as travel costs and
time lost from work for patients and their family or friends who accompany patients to their radiation treatment. The most commonly measured
treatment outcomes, as with other treatment modalities, include cancer­specific outcomes, such as overall survival, as well as treatment toxicity and
QOL. Though there have been efforts to define standard sets of cancer outcomes for the purpose of measuring value, these have not yet been widely
adopted.72

Radiation Technologies

Although value­based practice in radiation oncology shares many features with both medical and surgical oncology, the adoption of high­cost
technologies is of particular importance. The delivery of radiation therapy is a multistep process involving simulation, treatment planning, and
radiation delivery, each with a variety of technological options associated with different costs. Unlike for most chemotherapy and drugs, the
introduction of many new technologies in radiation oncology have not been subject to the same rigorous approval process. In the past, Medicare has
covered new technologies, such as intensity­modulated radiation therapy (IMRT), based on promising dosimetric and clinical studies, but before large,
randomized studies comparing its effectiveness with that of conventional radiation therapy.73

In many cases, comparative effectiveness studies may not be feasible without incurring high upfront fixed costs, often largely borne by providers. An
example of this was the adoption of proton therapy, which required the construction of proton therapy centers, with costs that exceeded $100 million.
However, it was not until a critical mass of proton therapy centers were built that large­scale multi­institutional trials could be performed, leading to a
conflict between the need for evidence before coverage versus the need for coverage to support evidence development.74

The multistep process of radiation therapy can also make clean comparisons of new technologies challenging, and technologies may become
outdated by the time randomized studies are completed. For example, a randomized study comparing proton therapy with photon therapy for lung
cancers failed to show a difference in toxicity or local failure,75 which was a surprise to many proponents of proton therapy. However, on closer
examination, the trial was not a straightforward comparison of protons versus photons, because at the time, more advanced treatment planning and
imaging technologies
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Oncology, Casey J. Allen; Aileen Chen; Ryan W. Huey; Ya­Chen Tina Shih Page 11 / 19
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Number of Radiation Treatments
 Mohammed
The multistep process of radiation therapy can also make clean comparisons of new VIchallenging,
technologies University ofand
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may become
outdated by the time randomized studies are completed. For example, a randomized study
Access comparing
Provided by: proton therapy with photon therapy for lung
cancers failed to show a difference in toxicity or local failure,75 which was a surprise to many proponents of proton therapy. However, on closer
examination, the trial was not a straightforward comparison of protons versus photons, because at the time, more advanced treatment planning and
imaging technologies were available to patients undergoing photon IMRT versus patients receiving proton IMRT. Additional trials are now underway
evaluating more modern proton techniques.

Number of Radiation Treatments

Though most curative intent radiation regimens have a fairly standard number of treatments, there has been recent interest in decreasing the number
of treatments delivered, or hypofractionation, in a number of cancer types, with most studies supporting the efficacy and safety of this approach.76–78
This has the potential benefit of reducing costs to both payers and patients. For palliative intent treatments, there is considerable provider discretion
in the number of treatments delivered. Reducing the use of extended fractionation for the treatment of bone metastases has long been a target of
value­based efforts in radiation oncology, with multiple guidelines, including a National Quality Foundation (NQF 1822) measure, all supporting
shorter regimens than what is commonly being done.79–82 The NQF measure has been adopted by the CMS programs that provide financial incentives
for reporting data on care quality.

Value­Based Payments Models in Radiation Oncology

The traditional fee­for­service payment model incentivizes both the use of high­cost technologies and a greater number of radiation treatments. Value­
based payment models seek to increase physician accountability and risk for cancer spending. Though there have been a variety of models proposed
in radiation oncology, the most common are described below:

Guidelines, Clinical Pathways, and Quality Measures

The primary goal of most guidelines, clinical pathways, and quality measures is to improve physician accountability and reduce variation in care.
Examples of such efforts in radiation oncology include clinical guidelines issued by NCCN, the Choosing Wisely initiative, and the American Society for
Radiation Oncology (ASTRO). Increasingly, payers are using these guidelines and pathways to determine coverage of care and to provide financial
incentives to providers.83,84 However, a frequent challenge is that use of pathways and guidelines may result in burdensome reporting requirements
and lag new developments in clinical practice.

Episode­Based Payment Models

Episode­based payment models in radiation oncology aim to increase the proportion of financial risk providers bear for costs of care and to incentivize
lower­cost care while maintaining quality standards.

Radiation oncology has been incorporated both into broader condition­based models, as well as radiation modality–specific models. One example of a
cancer condition–based model is the United Healthcare and MDACC bundled payment pilot in patients with head and neck cancer, which included
multidisciplinary oncology care over a one­year period.85 Another example is the Oncology Care Model, a voluntary episode­based payment program
sponsored by the CMS, which is centered on 6­month chemotherapy episodes and incorporates total costs of care during the episode, including
radiation therapy.86 One challenge of this model is that benchmarks are based on total costs of care, which oncologists may not be able to fully control.
Furthermore, the model could potentially introduce disincentive to care that is not well­captured by quality measures, such as palliative radiation.
More recently, the Oncology Care First Model has been proposed as a successor to the Oncology Care Model, with a target start date in 2021.84

Radiation modality–specific episode­based models have previously been developed between individual payers and radiation therapy practices.87
Nationally, a Radiation Oncology Model has been announced by the CMS to test a prospective episode­based payment model, with a target start date in
2022. Participation in the model would be mandatory for radiation oncology providers in selected Core­Based Statistical Areas for 17 different cancer
types. Provider payments would be based on 90­day episodes of care and linked to reporting and performance on quality measures. The goal would be
to test whether episode­based payments lead to shorter courses of treatment and higher­value care delivery in radiation oncology, while allowing
providers flexibility for individual patients.88

Value­Based Practice in Surgical Oncology

Because cancer surgery may frequently be associated with large physical, emotional, and financial demands, with often only a marginal survival
benefit, the determination of value is prominent in this setting. Within the field, most recent efforts to improve perioperative outcomes and cost are
through the development
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Prehabilitation

Enhanced Recovery After Surgery (ERAS) is an evidence­based, multimodal, multidisciplinary approach to the care of the surgical patient. In short, the
providers flexibility for individual patients.88
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Value­Based Practice in Surgical Oncology

Because cancer surgery may frequently be associated with large physical, emotional, and financial demands, with often only a marginal survival
benefit, the determination of value is prominent in this setting. Within the field, most recent efforts to improve perioperative outcomes and cost are
through the development of enhanced recovery protocols and through preoperative optimization with prehabilitation programs.

Enhanced Recovery and Prehabilitation

Enhanced Recovery After Surgery (ERAS) is an evidence­based, multimodal, multidisciplinary approach to the care of the surgical patient. In short, the
goal of any ERAS process is to achieve early recovery for patients undergoing major surgery. ERAS process implementation involves a team consisting
of surgeons, anesthesiologists, nurses, and staff from units that care for the surgical patient. It has been shown that, regardless of the surgical site,
ERAS programs result in major improvements in clinical outcomes and cost,88 making ERAS an important example of value­based care applied to
surgery.

Although cancer surgery may be curative, the efficacy of surgery depends heavily on whether patients' performance status and functional fitness will
allow for successful postoperative recovery. Frailty is seen in patients with gastrointestinal malignancy and is a predictor of poor survival, including
patients treated with curative intent.89 Because ERAS focuses on in­hospital care in the immediate perioperative period, prehabilitation is a growing
approach that is based on the principle that structured and sustained exercise over a period of weeks before surgery will optimize a patient's
cardiovascular, respiratory, and muscular condition. Because several recent preoperative fitness programs involving patients with cancer show how
prehabilitation may improve patient outcomes and reduce direct and indirect healthcare costs,90 this approach is an important factor that influences
not only the treatment and survival of patients undergoing major operations for malignancy, but also has important implications regarding the
healthcare economy.

The American College of Surgeons (ACS) is the leading organizational body for improving overall surgical care in the nation. With regarding to
oncology, the organization has created the ACS Cancer Programs, aimed at developing resources that enable providers to deliver comprehensive,
high­quality, multidisciplinary, evidence­based, patient­centered care to patients with cancer. The various programs include the Commission on
Cancer, the American College of Surgeons Clinical Research Program (ACS­CRP), the National Accreditation Program for Breast Centers, the National
Accreditation Program for Rectal Cancer, the National Cancer Database, and the American Joint Committee on Cancer. Among other functions, these
programs provide education and training opportunities, establish and promote evidence­based systems for the classification and management of
cancer, and emphasize program structure, patient care processes, performance improvement, and performance measures across the country.

American College of Surgeons Clinical Research Program

Through a relationship between the Alliance for Clinical Trials in Oncology and the ACS Cancer Programs, the ACS­CRP was created to improve cancer
care outcomes by disseminating validated management strategies. The program has several committees that work together to reach the program's
overall goals. Within these, the Cancer Care Delivery Research Committee is currently developing the Value of Care Workgroup. Their specific mission is
to improve care delivery processes by improving the infrastructure in defining value, measuring costs, developing multisite datasets, building value­
based care models, and networking the various member sites—ultimately integrating value assessment into cancer care delivery research.91

Transforming Healthcare Resources to Increase Value and Efficiency

In 2019, the Harvard Business School's Institute for Strategy and Competitiveness partnered with the ACS and announced Transforming Health­care
Resources to Increase Value and Efficiency. The program's mission is to assist providers in delivering value­based surgical care by improving patient
outcomes while lowering costs. Focused on measuring the full cycle of care, the program is currently piloting their value measurement process for
three surgical conditions at select institutions throughout the country: colon cancer, breast cancer, and morbid obesity/bariatric surgery. Their goal is
to use the results from the initiative to create a robust approach to measure and improve value at hospitals around the county.

Within the field of surgical oncology, although there has been growing recognition and emphasis to improve value of care delivery, the concept of
complete value­cased care in the field remains in its infancy.

MD ANDERSON PRACTICE TIPS

To enhance the value of care, interventions should aim at improving end points that matter to patients, providers, and society as a whole.

Gathering reliable and valid PRO data, designing patient preference studies that use valid instruments and apply reliable and generalizable
Downloaded 2025­5­16 7:17 A Your IP is 102.101.200.35
methods,
Chapter and using Oncology,
71: Value­Based the results Casey
to develop decision
J. Allen; aids
Aileen for shared
Chen; decision­making
Ryan W. Huey; Ya­Chen strategies
Tina Shihare recommended going forward. Page 13 / 19
©2025 McGraw Hill. All Rights Reserved. Terms of Use • Privacy Policy • Notice • Accessibility
Efforts to promote value­based care in medical oncology should center on cost, drug pricing and reimbursement models, standardization of
practice patterns, and the elimination of low­value care.
three surgical conditions at select institutions throughout the country: colon cancer, breast cancer, and morbid obesity/bariatric surgery. Their goal is
to use the results from the initiative to create a robust approach to measure and improve value at
Mohammed VIhospitals around
University the county.
of Sciences and Health ­ UM6SS Library
Access Provided by:
Within the field of surgical oncology, although there has been growing recognition and emphasis to improve value of care delivery, the concept of
complete value­cased care in the field remains in its infancy.

MD ANDERSON PRACTICE TIPS

To enhance the value of care, interventions should aim at improving end points that matter to patients, providers, and society as a whole.

Gathering reliable and valid PRO data, designing patient preference studies that use valid instruments and apply reliable and generalizable
methods, and using the results to develop decision aids for shared decision­making strategies are recommended going forward.

Efforts to promote value­based care in medical oncology should center on cost, drug pricing and reimbursement models, standardization of
practice patterns, and the elimination of low­value care.

Because cancer surgery may frequently be associated with large physical, emotional, and financial demands, efforts to improve outcomes and
cost by developing enhanced recovery protocols and prehabilitation programs is recommended.

When designing value­based models of care, it is important to consider how changing the incentives of providers, patients, and payers might
impact the quality of care.

Engagement in value workgroups through organizational bodies including the ASCO, the ASTRO, and the American College of Surgeons (ACS)
will further enhance value­based care transformation nationwide.

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