How could nationwide  value-based payment for cancer care become a reality in the next 5 to 10 years? Looking to today’s market for clues, our team has envisioned three scenarios of how stakeholders could make this happen.

In each scenario, we describe what the future would look like, how it would unfold, and what it would mean for major stakeholders in healthcare — and what to do if this future doesn’t look rosy for your organization.

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To help manage rising cancer costs, primary care groups under risk-based contracts would push risk toward cancer providers through sub-capitation arrangements. These groups would look for high-value cancer providers in their markets who would be willing to engage in risk-based contracting and agree to steer patients to them if they assume risk for the patients’ cancer treatment.

Managing exorbitant cancer costs has become a focus for at-risk primary care groups, particularly as they are under pressure to take on more risk with growing Medicare Advantage (MA) enrollment. Many of these provider organizations are already looking for partners that can offer lower and more predictable costs for the small proportion of their patients who are diagnosed with cancer.

This scenario takes this trend one step further by having cancer providers assume risk until patients return to primary care. The few cancer providers currently taking on risk would pave the way for other providers as they demonstrate the benefits of these partnerships.

As a result, cancer patients would be referred to a select number of progressive cancer providers, shifting volumes away from providers that still depend on fee-for-service revenue.

1. The oncology practice landscape will consolidate.
   To more effectively assume risk for cancer patients, independent cancer practices will band together to spread risk across larger practice networks. By entering risk-based contracts with primary care groups, these networks will steal market share from practices that remain independent, spurring further consolidation.
   
   
2. Medical neighborhoods will emerge as a favorable value-based care model.
   Primary care and oncology providers in risk-based partnerships will integrate into medical neighborhoods to holistically manage patient care. This care model, built on the elements of patient-centered medical homes and oncology medical homes, will emphasize care coordination, cross-specialty collaboration, and communication to effectively care for a patient population, combining traditional care elements with behavioral health, palliative care, and other support services.

With growing MA enrollment, more primary care groups are being pushed to take on risk. This has resulted in growth in the number of primary care disruptors, such as ChenMed and Oak Street, and the volume of patients they serve. While these groups are generally sophisticated at managing risk, cancer can be a large and unpredictable cost driver. Once a patient is under the care of an oncologist, at-risk primary care providers have limited ability to control those costs.

This is leading at-risk primary care groups to become more creative in their risk management strategies for cancer patients. Some are seeking out high-value cancer providers who can offer lower and more predictable cancer costs. For these groups, sub-capitation to cancer practices a logical next step. Primary care disruptors including ChenMed, Oak Street Health, Agilon Health, Optum Care, and One Medical have reportedly started sub-capitating to cancer practices on a small scale.

For cancer providers, risk-based contracting is beginning to prove a viable business model. Private equity firms like Valtruis, TPG, General Atlantic, Deerfield Management, and AEA Growth are increasingly investing in cancer practices looking to succeed in value-based care. These organizations are providing practices with the funding they need to confidently make the shift to risk-based payment.

In recent years, some cancer practices have begun to focus specifically on delivering care under risk-based contracts. One example is The Oncology Institute of Hope & Innovation, which became the first oncology provider to be publicly traded in November 2021. Another, Oncology Care Partners, launched its first three locations in January 2023. More cancer practices will be exposed to risk with the start of CMS’ Enhancing Oncology Model (EOM) in July 2023, which requires downside risk for all participants.

With at-risk primary care groups turning toward sub-capitation, growing private equity investment into value-based cancer care, and more cancer providers becoming comfortable taking on risk, the formation of risk-based partnerships between primary care groups and cancer practices is likely to accelerate.

• A primary care group’s ability to steer patients toward specific specialists depends on patients’ plan designs, so this approach wouldn’t work for all patients. In addition, payers would have to delegate network management to at-risk primary care groups, which isn’t realistic in many markets.
• The feasibility of a partnership between a cancer provider and a primary care network is market-dependent. In areas where primary care is controlled by an integrated hospital system or large payer, these partnerships would be less likely.
• Most cancer providers don’t have experience taking on risk for their patients, and many don’t have the scale to do so. Taking on risk would require significant changes in their care delivery models, and the transition would be difficult and time-consuming.

Not every stakeholder would be a winner in this future scenario. Here’s how key stakeholders would be affected and how they should respond.