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Invited Commentary
Health Policy
August 3, 2021

Higher Prices for Cancer Surgery at National Cancer Institute–Designated Cancer Centers—Are Payers Achieving Value for Their Dollars?

Author Affiliations
  • 1Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts
  • 2Division of General Internal Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
JAMA Netw Open. 2021;4(8):e2119716. doi:10.1001/jamanetworkopen.2021.19716

The National Cancer Institute (NCI) Cancer Centers Program, developed as part of the National Cancer Act of 1971, recognizes 71 cancer centers across the US that meet rigorous standards for transdisciplinary and innovative research to develop new and better approaches to preventing, diagnosing, and treating cancer.1 Although this program was developed to advance cancer research, these cancer centers have an important role in translating scientific knowledge into effective treatments for patients with cancer. Moreover, these cancer centers, nearly all part of academic medical centers, attract top clinician researchers and clinician educators who seek to advance both cancer research and clinical care.

The study by Takvorian and colleagues2 used data from 3 large commercial insurers in the US to examine spending and utilization for a large population of patients with breast, colon, or lung cancer who underwent cancer-directed surgery in 2011 through 2014. Takvorian et al2 identified individuals with presumed incident cancers using claims-based algorithms and identified each patient’s index cancer surgery based on procedure codes, attributing patients to the hospital where the surgery occurred (or the affiliated hospital for patients with breast cancer who underwent outpatient procedures). The study compared spending for surgical episodes of care, defined as the surgical hospitalization and all care through 90 days after discharge (or the surgery date for outpatient procedures). They also examined hospital length of stay (LOS), emergency department (ED) use, and hospital readmissions within 90 days.

The study found that spending on cancer surgery episodes was substantially higher for patients undergoing surgery at NCI cancer centers compared with community hospitals ($18 526 [95% CI, $16 650-$20 403] vs $14 772 [95% CI, $14 339-$15 204]; difference, $3755 [95% CI, $1661-$5849]), without any differences in LOS, ED visits, or hospital readmissions.2 The spending differences were driven primarily by differences in facility payments, which accounted for nearly 90% of all spending. Although the data did not allow for direct assessments of the quality of surgical care, such as margin status, number of lymph nodes assessed, or postoperative complications, the similar LOS and rates of ED visits and readmissions suggest that quality may have been similar. Spending for surgery episodes in other academic medical centers was $1359 (95% CI, $280-$2438) more than in community hospitals, although this difference did not reach statistical significance after adjustment of P values for multiple testing. Takvorian et al2 did not assess directly if spending for surgery in NCI cancer centers differed from that of other academic medical centers; spending was lower for other academic medical centers ($16 131 [95% CI, $15 201-$17 060]) compared with NCI-designated cancer centers, but the overlapping 95% CIs suggest that differences were not likely to be statistically significant.

The higher spending for NCI-designated cancer centers compared with community hospitals, despite similar utilization, suggests that the observed differences were driven by higher prices negotiated by these cancer centers with commercial payers. A 2021 study by Wolfson et al3 found similarly higher health plan spending at NCI-designated cancer centers vs other hospitals for privately insured young adults with acute lymphoblastic leukemia. Such price differences are becoming increasingly evident as commercial insurance data become more available to researchers. Unlike Medicare prices, which are set by the Centers for Medicare & Medicaid Services, commercial prices are negotiated by hospitals and physician groups for each commercial payer and are 2- to 3-fold higher than Medicare prices.4 Higher prices likely explain why NCI-designated cancer centers5 and their affiliated oncologists6 are often excluded from federal health insurance exchange plans. Private health plans may find it more difficult to exclude these highly-respected cancer centers from their networks, since employers want to provide their employees with access to them.

Some evidence suggests that care at NCI-designated cancer center hospitals is associated with better outcomes than care in community hospitals.7 Improved outcomes at NCI-designated cancer centers may be particularly evident for patients undergoing cancer-related surgical procedures,8 for which higher patient volumes may also have benefits. It is likely that some patients benefit from the highly specialized care available at NCI-designated cancer centers, particularly patients with rarer or complex clinical conditions, patients requiring complex procedures, or those for whom clinical trials may offer promising treatment options. But it is also likely that many other patients will do equally well regardless of where they receive their care.

More research is needed to better understand prices and to reliably measure the quality of care delivered to patients with cancer across hospitals and practices.9 Such information is critical to assess the extent to which payers and patients achieve value for health care dollars spent at NCI-designated cancer centers and to identify subgroups of patients for whom highly specialized care is particularly necessary to achieve better outcomes. Such data could also be used by payers considering tiered networks and by physician organizations participating in risk contracts for decisions about where to refer patients with cancer for treatment. In the search for high-value, patient-centered, and equitable care, it is critical to identify strategies to better allocate health care dollars in ways that achieve the best possible outcomes across populations of patients.

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Article Information

Published: August 3, 2021. doi:10.1001/jamanetworkopen.2021.19716

Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Keating NL. JAMA Network Open.

Corresponding Author: Nancy L. Keating, MD, MPH, Department of Health Care Policy, Harvard Medical School, 180 Longwood Ave, Boston, MA 02115 (keating@hcp.med.harvard.edu).

Conflict of Interest Disclosures: None reported.

National Cancer Institute. NCI-designated cancer centers. Accessed on May 28, 2021. https://www.cancer.gov/research/infrastructure/cancer-centers
Takvorian  SU, Yasaitis  L, Liu  M, Lee  DJ, Werner  RM, Bekelman  JE.  Differences in cancer care expenditures and utilization for surgery by hospital type among patients with private insurance.   JAMA Netw Open. 2021;4(8):e2119764. doi:10.1001/jamanetworkopen.2021.19764Google Scholar
Wolfson  JA, Bhatia  S, Ginsberg  J,  et al.  Expenditures among young adults with acute lymphoblastic leukemia by site of care.   Cancer. 2021;127(11):1901-1911. doi:10.1002/cncr.33413PubMedGoogle ScholarCrossref
Lopez  E, Neuman  T, Jacobson  G, Levitt  L. How much more than Medicare do private insurers pay: a review of the literature. Kaiser Family Foundation. April 15, 2020. Accessed on May 26, 2021. https://www.kff.org/medicare/issue-brief/how-much-more-than-medicare-do-private-insurers-pay-a-review-of-the-literature/
Kehl  KL, Liao  K-P, Krause  TM, Giordano  SH.  Access to accredited cancer hospitals within federal exchange plans under the Affordable Care Act.   J Clin Oncol. 2017;35(6):645-651. doi:10.1200/JCO.2016.69.9835PubMedGoogle ScholarCrossref
Yasaitis  L, Bekelman  JE, Polsky  D.  Relation between narrow networks and providers of cancer care.   J Clin Oncol. 2017;35(27):3131-3135. doi:10.1200/JCO.2017.73.2040PubMedGoogle ScholarCrossref
Pfister  DG, Rubin  DM, Elkin  EB,  et al.  Risk adjusting survival outcomes in hospitals that treat patients with cancer without information on cancer stage.   JAMA Oncol. 2015;1(9):1303-1310. doi:10.1001/jamaoncol.2015.3151PubMedGoogle ScholarCrossref
Shulman  LN, Palis  BE, McCabe  R,  et al.  Survival as a quality metric of cancer care: use of the National Cancer Data Base to assess hospital performance.   J Oncol Pract. 2018;14(1):e59-e72. doi:10.1200/JOP.2016.020446PubMedGoogle ScholarCrossref
Keating  NL, Cleveland  JLF, Wright  AA,  et al.  Evaluation of reliability and correlations of quality measures in cancer care.   JAMA Netw Open. 2021;4(3):e212474. doi:10.1001/jamanetworkopen.2021.2474PubMedGoogle Scholar
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