At the 2025 Patient-Centered Oncology Care Conference hosted by The American Journal of Managed Care, oncology leaders discussed the evolution of value-based care initiatives, from government-driven models to partnerships with commercial payers and the transition from the Oncology Care Model to the Enhancing Oncology Model. The panel, moderated by Lalan Wilfong, MD, senior vice president for value-based care at Thyme Care, examined the growing complexity of balancing quality, cost, patient access and outcomes.
Panelists said value-based programs must be nimble to remain viable as clinical practice and payment landscapes change. “I think with any kind of value-based care model in this arena, it has to be very nimble and has to keep up; otherwise it’s not going to last,” said Stuart Staggs, MSIE, vice president of transformation and shared services at McKesson. He added that commercial payers often start and stop initiatives, complicating efforts to identify sustainable approaches that keep patients first.
Early efforts focused on adopting technology and tracking quality metrics. As the field matured, scalability and standardization became greater challenges because of the lack of national consensus and growing administrative burdens in documentation and reporting. Advanced therapies and innovations have further complicated payment model design, reducing opportunities for cost savings and increasing the need for models that can quickly adapt to changes in clinical practice and costs.
“There’s a limited number of contract terms and mechanics that we can use to create a value-based contract, but ultimately what we’re trying to do is get paid for something that did not happen that was undesirable. How do we measure the counterfactual of what didn’t happen? That’s the inherent challenge in value-based payment models in general,” said David Johnson, MD, MPH, chief physician executive at Atlas Oncology Partners.
The panel favored population-level, longitudinal payment models over episodic or narrowly defined approaches, arguing these offer greater sustainability and better outcomes. Such models require new methods for risk adjustment, case mix accounting and rapid incorporation of medical advances, and they must evolve continuously to align financial incentives with desired clinical outcomes.
Panelists highlighted drug market realities as a major pressure point. Innovations in advanced and personalized therapies have driven expenses higher for health systems and payers. While biosimilars initially produced savings, many cost-reduction opportunities have been exhausted. Episodic and bundled payment models face difficulty when therapies carry very high, subtype-specific costs that make standardization and payment benchmarking unpredictable. The panel emphasized the need for models that can quickly adjust benchmarks and risk and that may include manufacturer accountability for therapy outcomes, especially for high-cost cell and gene therapies.
“The math just doesn’t work when we see the rates at which we’re getting meaningfully innovative new therapies that carry substantially higher costs,” said Aaron Lyss, MBA, senior director of payment and policy innovation at OneOncology. “That is going to outpace Medicare’s ability to fund access to those therapies, and it’s going to outpace the private sector’s ability to fund access to those therapies without employers and consumers taking on much higher premium costs. The only way to get there is to pay substantially less for therapies that are less clinically meaningful and less valuable.”
Patient heterogeneity poses another challenge. Oncology populations vary widely by disease severity, subtype, comorbidity and socioeconomic factors, requiring models to account for mixed cohorts and fair benchmarking. Participants said models must include dynamic case-mix adjustment as therapies evolve, and meaningful segmentation is necessary to prevent outliers from skewing costs and outcomes. Stratifying results by ethnicity or area deprivation index has exposed persistent outcome gaps tied to social determinants of health, underscoring the need to include these factors in performance assessment.
Health equity must be central to value-based care, panelists said. “In my view, this is something we need to always consider,” said Sophia Humphreys, PharmD, MHA, BCBBS, former executive director of pharmacy at Providence. “When we consider value-based care, when we consider offering a population health contract…in my mind, the population includes everyone.” Adjusting payment benchmarks and risk arrangements to reflect higher severity or disparities in certain groups can prevent providers from being penalized for caring for higher-risk populations. Using real-world data and clinical trial evidence to identify disparities and designing incentives that reward equity improvements were presented as practical steps.
Panelists concluded that adapting payment models to rapidly changing therapies, incorporating robust risk adjustment and explicitly addressing health equity are essential to sustaining value-based oncology care and improving outcomes for disadvantaged populations.
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