Importance: As the US accelerates adoption of alternative payment through global payment models such as Accountable Care Organizations (ACOs) or Medicare Advantage (MA), high spending for cancer care is a potential target for savings.
Objective: To quantify the extent to which ACOs and other risk-bearing organizations operating in a specific geographic area (hospital referral region [HRR]) could achieve savings by steering patients to efficient medical oncology practices.
Design, setting, and participants: This observational study included serial cross-sections of Medicare beneficiaries with cancer from 2010 to 2018. Data were analyzed from August 2021 to March 2023.
Main outcomes and measures: Total spending and spending by category in the 1-year period following an index visit for a patient with newly diagnosed (incident) or poor-prognosis cancer.
Results: The incident cohort included 1 309 825 patients with a mean age of 74.0 years; the most common cancer types were breast (21.4%), lung (16.7%), and colorectal cancer (10.0%). The poor prognosis cohort included 1 429 973 (mean age, 72.7 years); the most common cancer types were lung (26.6%), lymphoma (11.7%), and leukemia (7.3%). Options for steering varied across markets; the top quartile market had 10 or more oncology practices, but the bottom quartile had 3 or fewer oncology practices. Total spending (including Medicare Part D) in the incident cohort increased from a mean of $57 314 in 2009 to 2010 to $66 028 in 2016 to 2017. Within markets, total spending for practices in the highest spending quartile was 19% higher than in the lowest quartile. Hospital spending was the single largest component of spending in both time periods ($20 390 and $19 718, respectively) followed by Part B (infused) chemotherapy ($8022 and $11 699). Correlations in practice-level spending between the first-year (2009) and second-year (2010) spending were high (>0.90 in all categories with most >0.98), but these attenuated over time.
Conclusions and relevance: These results suggest there may be opportunities for ACOs and other risk-bearing organizations to select or drive referrals to lower-spending oncology practices in many local markets.