Editor’s note: Dr. Hudis hosts the ASCO in Action Podcast, which focuses on policy and practice issues affecting providers and patients. An excerpt of a recent episode is shared below; it has been edited for length and clarity. Listen to the full podcast online or through iTunes or Google Play.

CH: I'm delighted to have as a returning guest Dr. Jeffery Ward, past chair of ASCO's Government Relations Committee. He's here today to talk with us about ASCO's updated Patient-Centered Oncology Payment model, or PCOP. This is an alternative payment model which he had a major role in authoring and developing. Dr. Ward is going to tell us more about the significant updates in this model, its goals, and how it could work to improve care for patients with cancer.

We recently put out the update of the ASCO PCOP model, so, at a very high level, can you tell us, what does this updated PCOP do? What makes it unique as an alternative payment model?

JW: I think at a high level, it makes the oncologist responsible for being a good steward of our cancer care delivery system, without making us responsible at the same time for what the market will bear—drug prices that are both ridiculous and entirely out of our control. It aligns what we aspire to and how we get aid into one cohesive model.

CH: What are the specific approaches that our PCOP uses to make sure that patients have access to high-quality care, and practices have the resources they need to provide that care?

 JW: PCOP has two reimbursement models. The first is a starter track, which will be familiar to followers of Medicare's Oncology Care Model (OCM) demo. The starter track takes a performance-based reimbursement system and puts it on the backbone of traditional fee-for-service, but there's one big difference: it doesn't hold practices responsible for drug list prices.

Then there's an advanced track that's closer to the original payment model we first published in 2014. It transitions fee-for-service oncology to monthly bundled payments and replaces the margin on drugs with a suitable pharmaceutical management fee.

CH: So, what triggers you to start adopting PCOP? Why don't you just put your head down and keep doing things the way you always have?

JW: One reason is that we have a system that isn't going to be able to continue the way it is. There's no doubt that prices are accelerating and if we don't find a way to bend the cost curve, we're not going to be able to fulfill our mission to take care of patients.

The second reason is that this pathway is going to improve the way we give care. The struggle we have with fee-for-service medicine is that it rewards the provider for doing more. This effect is amplified dramatically when you apply it to the cost of drugs. On the other hand, value-based pathways—which look at efficacy first, toxicity second, and cost as a tiebreaker—can reward a provider for using the right drug for the right patient at the right time. A well-constructed pathway will avoid both over- and under-utilization of therapies, and that helps make PCOP uniquely different from payer-mandated pathways because it's a prospective pathway agreed upon by the providers and the payers in a transparent and collaborative way. So, there's several things, I think, that we've done to try and combine both reimbursement and care into one cohesive model, instead of two separate tracks that incentivize different things.

A major element of the PCOP design is its emphasis on implementation in communities that include multidisciplinary providers and practices. It also includes multiple kinds of payers—federal and state on the one hand, and then private on the other, the latter including employers. And finally, it can include patients with some mobility and span regional health networks.

CH: What is the benefit of this broader approach to the PCOP model?

JW: I think one thing that's really unique in the update in the model—it's certainly not something that we had envisioned initially, and why the evolution of the model is important—is the recognition that quality improvement happens slowly if you're in a silo. PCOP is really designed to bring together geographic communities of providers, payers, and policymakers, and then it yokes them together for the patient's benefit. It allows for efficient sharing of best practices. One of the things I’ve learned from being involved in both the Washington State Medical Oncology Society (where I’m located) and ASCO at the same time is that being collaborative helps our patients a whole lot more than being competitors.

CH: Thinking about networks and collaboration, how do you implement PCOP? How does a practice go from, it's Tuesday morning and we're running along the way we have since 2003, and now it's Wednesday and I'm in PCOP?

JW: I do think that there is a bit of a hurdle there, but there are also some natural places that this could get a foothold. Once people see how this model works and how effective it is, it will certainly gain in popularity. I think Medicare Advantage plans, Medicaid HMOs, and some accountable care organizations have, in particular, struggled with managing oncology. One way to do it is to partner with the providers and be able to manage together, and PCOP would be a godsend for some of those payers.

CH: We know that most practices are dealing with a variety of meaningful, serious pain points. Our most recent ASCO Practice Census found that almost 60% of practices cited payer pressures as their top concern. How would the PCOP reduce that pain for those practices?

JW: I really think the biggest reason for the enmity between the providers and payers is that we're playing with two different sets of rules, and PCOP allows for setting the rules for both of us.

CH: If you talk to policymakers and you listen to candidates on the campaign trail, health care costs (drug prices, specifically) are clearly at the top of the agenda. So, if PCOP were to be implemented, how do you see it changing the cost of care? Where would the cost savings come from?

JW: ASCO has estimated that PCOP could bend the total cost curve for cancer care by 8%. That's huge. It doesn't try to measure the impact that widespread use of value-based pathways may have on drug prices. In my opinion, if everybody was on a value-based pathway, the only way to move up on the pathway if you're a drug company may be to lower your price, and we may see competition on list prices. That's something that has never happened in brand-name drugs today. I think that there's an opportunity, if this caught on and large numbers of practices were doing this, to bend the cost curve on drugs beyond just the 8% that ASCO has estimated so far.

CH: We've covered a lot, and yet we've just begun to scratch the surface. So, if a practice, a payer, or any other stakeholder has their interest piqued by our discussion and wants to implement PCOP, or just wants to learn more, what should they do? Who should they contact?

JW: They can learn more on ASCO Practice Central, or they can also reach out to the ASCO Clinical Affairs Department.

Learn more about ASCO’s Patient-Centered Oncology Payment model, and the latest news on ASCO’s health policy and advocacy efforts at ASCO in Action.

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