Evolent (NYSE: EVH) is a company built to help payers manage high-cost specialty care, focusing on areas such as oncology, cardiology, and musculoskeletal medicine. In the Journal of Clinical Pathways, Evolent oncology experts recently reported on their efforts to identify "low-value regimens" in oncology and then decrease their use by more than 20%, following a provider education and engagement campaign with a national payer partner.
Healthcare Innovation recently spoke with Andrew Hertler, M.D., chief medical officer emeritus at Evolent, about how the company goes about engaging with clinicians to reduce low-value care.
Healthcare Innovation: Before we talk about the results of this study, can you tell us a bit about Evolent’s business model?
Hertler: Our primary customer at this point in time is payers, and they contract with us to manage conditions, and for a portion of that we actually own the entire cost of care, so we are capitated for that business. To a certain extent, that makes us think like a payer for these subgroups of patients. What we're interested in and why I was attracted to the company over a decade ago is there's a true ongoing belief that if you provide higher quality care, savings are going to flow out of that naturally. If you get the right care to the patient at the right time, they're going to have fewer complications. They're going to be less likely to be admitted to the hospital, and hopefully we will eliminate waste at the same time.
We work heavily with physicians and provider groups. Much of what we do is involves convincing physicians that the care pathways we have outlined will provide that higher quality care to patients. We spend a vast amount of time combing through medical literature and clinical trials, trying to identify best practices and then get them out to physicians. We can't make them make these changes. We have to convince them of that. One of my roles is to set that clinical agenda, that clinical pathway, and then to basically convince physicians that this is the best way to proceed. We have to use multiple tools to try to change behavior.
HCI: Those oncologists probably already have a clinical pathway that they've created within their organization, right?
Hertler: They may or may not. I will say that creating clinical pathways is a very full-time job. I have a whole team that does it. I have a team of four oncology pharmacists. I have over 20 oncologists, and we update our clinical pathways every three months.
HCI: It is amazing how fast all of this is changing.
Hertler: It's a very exciting time in the world of oncology because of the pace of innovation. We literally update our pathways and then start a new cycle. There's a lot of health economics involved trying to determine cost of care. Obviously you can look at drug costs, but it's more complicated than that. Are there downstream costs? Are there going to be more hospitalizations? I practiced for 29 years, so I've sat on both sides of the fence, so to speak, and I can say that no practicing oncologist has the time or the resources to develop pathways.
Now, when I was in practice, we contracted with a pathway group, but when we looked at a bunch of options and they looked very equivalent, we would look at what was the margin — what could we buy the drugs for, and what were we going to be paid for them?
HCI: Well, do the oncology groups have misaligned incentives that might encourage ordering more expensive drugs?
Hertler: I will give you an example of a second line therapy for small cell lung cancer, with two predominant options available. One is a much newer drug than the other. When we look at what we call progression-free survival, they're almost identical. When we look at the cost difference between the two options, it's a 70-fold difference. One option for three months of therapy is just over $42,000 and the other is $600 and yet they look very, very similar in terms of what the outcome is going to be.
When you're in practice, everyone likes the new shiny drug. We all like innovation. In Medicare, you get paid back for the drugs with a 6% margin — the average sales price plus 6%, and 6% of $42,000 is a whole lot more than 6% of $600. in my present role, I don't begrudge the practice the 6% of $42,000. We try to find ways to pay them for the care and make up that difference with management fees, etc. We’re interested in the other $40,000, which, in our mind, is not bringing the additional value and improving how long the patient lives, or you're not decreasing their side effects so they have a better quality of life. We don't see much value in it, and that is actually the definition of waste when you don't provide additional value, but you do cost a lot more money.
HCI: Have there been some previous approaches to low-value care recommendations that have not been as successful?
Hertler: There has not been much in the way of looking at drugs specifically, but there has been a campaign called Choosing Wisely and that was really an attempt to de-implement low-value care, to not do things that don't add value. Sadly, there have been a number of studies looking at how often people follow the Choosing Wisely recommendations, and I don't remember the exact number, except it was disappointing.
HCI: Could you talk about some of the components of the program that Evolent put in place with a payer partner that's described in the paper? I saw that there was a pay-for-performance component…
Hertler: The question is, how do you drive change with over 10,000 oncologists across the country? People ask me, How do you it? What's the trick? There is no one trick. It takes time, and it takes multiple ways of communicating, and it takes multiple different levers. So yes, pay for performance was one. Every time you follow one of our preferred pathways, we throw some dollars into a bonus pool. Also, every time you use one of these low-value regimens, we're going to subtract from your bonus pool. We also said every time you've proposed using one of these low-value regimens, we’ve reached out to you for a phone call. If you pick up the phone and just talk to us, we throw some money into your bonus pool — not as much as based upon your decision, but we realize that just engaging is worth something. We actually tied that payment to what they would have spent for 10 minutes seeing a patient.
The oncologists want to provide good care to their patients. When you show them evidence and data, that will often drive as much change as any financial payment will.
HCI: Are there some lessons learned in terms of the success you’ve had in making change?
Hertler: If you had asked me three months into the launch, I was not optimistic. We weren't seeing change. So the first thing we learned was that it took time. It really started picking up over the second six months, That was the first lesson we had — don’t give up when you don't see instantaneous results. The second was that we were able to drive change. We drove a 20% decrease in the use of low-value regimens, and it's been sustained.
The other lesson is that when we launched, I thought I would get a lot of pushback. I’m not saying there was none, but in general, when I would sit down with a practice, walk through what we were declaring low value and what the evidence was, in general, they would usually agree.
HCI: Could this approach you are using in oncology also apply in fields like cardiology, imaging or musculoskeletal care?
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