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Health Plans Use New Strategies to Control the Soaring Costs of Oncology

The same medical advances that are transforming cancer from a life-threatening acute condition to a chronic issue are challenging health insurers and other payers struggling to pay for the soaring costs of treatment. In response, insurers are focusing on both the condition and the cure, rolling out intensive disease management (DM) programs to improve care for oncology patients while also tackling the soaring cost of cancer medications. Cancer trails only heart disease as the leading cause of death in America, and is diagnosed in more than 1 million people each year, according to the Centers for Disease Control and Prevention. Health insurers bear high treatment costs for the condition. Aetna, Inc. with 14.8 million medical members as of Dec. 31, 2005, spent $978 million on 2005 oncology treatments. Physician costs accounted for the largest share, 58%, followed by hospital spending at 25%, skilled nursing and other facility care at 7% and specialty pharmacy costs, also at 7%. In response, Aetna built its own specialty pharmacy to better manage oncology and other specialty drugs. Meanwhile, HIP Health Plan of New York launched a preferencing program with an independent specialty pharmacy; CIGNA HealthCare on March 31 introduced a comprehensive oncology condition management program that includes prevention, diagnosis, treatment and recovery modules; and Great-West partnered with a vendor that handles both DM and pharmacy management for oncology patients.
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