I read that you are board certified in internal medicine and oncology. What drew you to oncology?
Funny story. I went to medical school at Washington University in St. Louis, which is one of the biggest cardiology places in the universe. It was really exciting, but I didn’t want to do cardiology for the rest of my life. I tried everything else. Internal medicine, pulmonary medicine, endocrinology. But when I was a resident at Penn, I had Sandy Shattil as an attending physician, and he’s a hematologist. He sort of had a reputation of being a tough guy, but he and I just absolutely hit it off. At the end of the rotation he said, “You may not recognize this, but you have knack for this, and this is what you should do for the rest of your life.” And that was very, very impactful.
Michael Kolodziej, MD
So, I got attracted to it initially because of the intellectual challenges. And then, I fell in love with it because I like taking care of the patients. I like getting to know the families. I like the interpersonal aspect of care. And I felt like I could do a pretty good job of it.
Not only did you have a knack for the intellectual side, but you had a good bedside manner.
I’m told that I did. I’m not in a position to make that judgment, but I’m told that I did, yes.
You started to work for Aetna in 2013. You switched from the provider side to the payer side. Have you changed your mind about anything as a result of switching sides?
You know, I don’t think so. I wasn’t the average provider. In addition to my practice — and I had a very busy private practice — I did a lot of administrative work as the medical director at U.S. Oncology around evidence-based treatment, trying to extract value from our electronic medical record and working on this care-delivery model, which these days we’re calling the oncology medical home. So, I had that sort of focus, and I’ve carried that sort of focus around evidence-based treatment, using data to inform optimal care delivery, and then executing care-delivery reform.
I mean, I understand very well the challenges that practices have around, for example, implementing advanced care planning programs in an office practice, what the challenges are to doing that. But I feel extraordinarily passionate about optimizing end-of-life care.
Is it a staffing problem for the average oncologist?
It’s a lot of things. I think a big part of it is that we have not gotten comfortable with the value of standardizing the approach. People hear about standardizing processes of care and they think, “Oh, my gosh, it’s just cookie-cutter medicine,” and all that stuff. That’s silly.
Why is it silly?
Because I’m a strong believer that variation almost never yields a superior result. Variation is different from personalization. Variation has no basis in fact, or reality, or evidence. There are many areas of life where optimized processes can yield a superior result. And variability for the sake of variability is not a benefit.
Where does that variability come from?
I think it may come partially from a belief that the doctor is always right. I think we train doctors to be individualistic. Being willing to embrace the idea that you really ought to look at how you’re doing things and think about ways to make them better — that’s not a place where many doctors feel comfortable.
Let’s talk about what you’re doing at Aetna. There was a piece that I ran across in which you wrote about oncology practices getting enhanced reimbursement for prescribing generics and shared savings if quality metrics are met.
Those are both components of our oncology medical home program. The goal of the oncology medical home program is to use the lessons that we’ve learned from the primary care medical home program about team-based care, evidence-based care, enhanced access, and shared decision making, and to operationalize them in the cancer space. And what you’ve described are the ways that we have used it in the short term to reward providers who execute this enhanced care delivery model.
The logic goes something like this: If you follow evidence-based care and make value-based clinical decisions, it’s just going to turn out that you actually wind up using generic drugs more. It’s just the way it is. And if you do, you’ll get rewarded for it. And if the practice delivers and has a good clinical care model, and it keeps people out of the ER and the hospital, it saves money. So, I can give the practice some of that back.
I also can give you a little extra money for doing high-value clinical services. Like, let’s sit down with the patient and discuss a treatment plan, an end-of-treatment summary, advanced care planning. I can give you money for those enhanced clinical services — let’s call it a care management fee.
I want to get a clear handle on how the money flows. The oncologists bill for these sit-downs? Or is the concept here more like a capitated or bundled payment situation, where I have a budget for a certain patient, and if I beat that budget by X amount, there’s a shared savings between me and Aetna.
The money flows like this: Enhanced fee schedule goes in effect Day 1. That way, I get the practice money right away. You bill me for the enhanced clinical services and then we reconcile at the end of year when we compare your performance with the market competition. We don’t compare your performance on how you did last year. Because if you’re already doing really well, it’s hard to improve much more.
I think what’s going to happen — and this is my hope and my projection — that by having enough of these relationships, we’re going to be able to get an idea of how much better these practices are and then we should be able to determine a management fee. And ultimately, the information that we’re going to get from this will allow us to figure out what an episode should look like and cost because we will have clinical details. This program will help us figure out the components that go in and stay out of an episode. That is my vision of where this goes.
How many practices do you have participating in this program?
We have 17 or 18 right now. We did submit an application to the CMS Oncology Care Model program [see CMS Takes the Lead In Oncology Payment Reform]. We named about 10 new practices on that application. The OCM is going to name their practices sometime later this fall. I’m pretty confident that the practices that we named are all going to get the award. In fact, I’d be willing to take a bet on it. We will go instantaneously then to somewhere between 25 and 30 practices. And then, I’ll take a very close look at the other practices that got the OCM award, and the joke is that I’m going to go shopping.
So, I think we could actually grow very, very rapidly. And I have to thank CMMI [CMS’s Center for Medicare and Medicaid Innovation] because the kind of things they’re asking practices to do in a lot of ways are the same things I’m asking them to do.
It’s interesting how CMS and CMMI have become kind of a disruptive force.
Listen, I’m telling you, they are the greatest catalyst right now for change in oncology. It’s really amazing.
How much of an impediment is buy and bill to the adoption of the value-based payment schemes that we’ve been talking about?
What buy and bill did was make it possible for oncology practices to develop a really efficient chemotherapy delivery model. And it gave them revenue, to some extent, to enhance clinical services. So, there has been a great benefit from buy and bill. And it’s a system that, at the present moment, is vital to continuing to deliver cancer care in a way that we’ve become accustomed.
Now, that said, it’s always had the problem of apparent conflict of interest. It’s always had the problem that some people have used it solely to their financial benefit. And I think we’re just at a point now where we need to accept the fact that it may be an impediment to meaningful oncology reform.
There needs to be a transition here. I think if you look at what Lee Newcomer did with UnitedHealthcare, it shows that oncologists could accept the management fee in lieu of buy and bill. And practices could get comfortable with that. And I think that’s ultimately going to prove to be the case.
Let’s talk about the high price of some of these new oncology drugs. Do you think these prices are justified?
I think there certainly is a cost of innovation, and unfortunately, we’ve gotten accustomed to paying a premium for fairly modest innovation. We have become enamored with the idea that incremental improvement is ultimately going to get us to the promised land, and that we should pay a premium for that incremental improvement. We are living now in a time of what is almost transformational improvement. And we don’t know how to value that. We don’t know how to reward that.
So, I think that we’re probably going to need to change the way that we award innovation; find ways to reward innovation that gives us really good results.
So price would be tied to some sort of value equation. Is that what you mean?
Yeah, that’s one possible way of looking at it. There are a couple ways to look at it. I’m a big fan of using biomarkers to identify people who are going to respond to a drug, and the reverse — identifying people who aren’t. If we do that, we will extract more value because we’ll improve the outcome for the given cost.
Another way might be, for example, using real market forces to promote competition on price for a class of agents. That’s what the Express Scripts guy has been talking about.
We may come to a time where treatment is administered, but only paid for if it works. And we can have a long debate about what constitutes “it works.”
Steve Miller, the chief medical officer?
Yeah. And I think that is what we may see with the PD1 inhibitors. My prediction is they’re all going to have the same labeled indication. We’re going to have a class of drugs. So we’ll see whether we will have some competition around price.
And then, I think the ultimate expression of this may wind up being — and this is way out there — paying for response. We may come to a time where treatment is administered, but only paid for if it works. And we can have a long debate about what constitutes “it works.” That’s a whole topic for another hour. I have talked to people in pharma and they’re starting to think about whether they can survive in that kind of universe.
Some people have a less scientific or technical approach, which is, “Let’s have CMS negotiate price.” Do you think it’s time for CMS — and I realize it would require a change in law — to start negotiating price?
My opinion is yes, they should. That’s my opinion, not Aetna’s. I think it’s an easy first step. It will be an incomplete solution.
When you Google “Aetna” and “cancer” do you know what one of the top hits is?
Stories about Arijit Guha, the student who had stage 4 colon cancer who hit the lifetime limit on his health policy. He got into a Twitter conversation with Mark Bertolini, the head of Aetna, and eventually got coverage. But I guess lifetime limits are now forbidden by the ACA.
Those limits don’t exist. They’re gone.
Do you think the ACA has done a good thing — eliminating the lifetime limit?
Yeah, I think if you look at the ACA, there are a number of things that it has done that are good, and that’s one of them. It got rid of pre-existing conditions. Cancer screening is paid for. It’s done a lot of good things.
You wrote a piece in 2013 that kind of captures some things I have been thinking about. You talked about oncology has never been more exciting because of treatment advances. But it’s sort of A Tale of Two Cities because of the high cost of cancer treatment. Are you concerned that we’ll have all these scientific advances, but the treatments are going to be so expensive that they won’t reach the people who need them?
I’m probably more bullish than I was when I wrote that article. I think we really are at a time when oncologists, cancer care providers, and payers are starting to pull the oars in the same direction. I think the dialogue about cost and value is a healthy one. I grew up in a lower-middle class family, and we thought about a budget. It’s the responsible thing to do.