Impact an evaluation of the california’s statewide prostate cancer treatment program by UCLA Luskin School of Public Affairs

ACKNOWLEDGEMENTS We gratefully acknowledge the guidance, support and patience of our faculty advisor, Professor Mark Peterson. This report could not have been produced without his assistance. We are indebted to our peer reviewers, Joanna Farrer and Galena Kolchugina, for their many constructive comments on far less readable drafts of this report. We wish to express our appreciation to Professor Arleen Leibowitz for her advice and direction early in this process. Special thanks also to Professor Gerald Kominski for introducing us to cost-effectiveness analysis in health and medicine, and Dr. Richard Brown for providing us with a semester of background information on Medi-Cal in a single twenty minute discussion. Finally, we are especially grateful to Dr. David Ganz for his painstaking review of our Markov models, and his invaluable insight and advice on every aspect of this report.

TABLE OF CONTENTS Executive Summary...................................................................................................................... 3 Introduction................................................................................................................................... 5 Clinical Background ..................................................................................................................... 7 Who is at Risk for Prostate Cancer?..................................................................................... 7 How is Prostate Cancer Diagnosed in Low-Income, Uninsured Men?.............................. 7 What are the Guidelines for Treating Prostate Cancer? .................................................... 8 Prostate Cancer Staging ................................................................................................... 8 Prostate Cancer Grading ................................................................................................. 9 When is Expectant Management Appropriate?............................................................. 9 What Active Treatment Options are Available for Prostate Cancer?......................... 9 Are Low-Income, Uninsured Men with Prostate Cancer a High Risk Group? .............. 10 POLICY CONTEXT: Disparities in Cancer Treatment Access and Outcomes .................. 12 The Shrinking Safety Net for Uninsured Adults in California......................................... 12 Fewer Resources, but a Growing Need for Services.................................................... 12 Barriers to Specialty Care in Californiaâ&#x20AC;&#x2122;s Safety Net ................................................. 13 Low-income Men Have Poorer Health Outcomes after Treatment................................. 15 Comprehensive Cancer Control in California ................................................................... 16 IMPACT: A Closer Look at Program Design and Objectives ......................................... 16 Approach to Reducing Cancer-related Disparities...................................................... 16 Concerns about High Administrative Expense ............................................................ 18 Options for a Statewide Prostate Cancer Treatment Program .............................................. 19 Option 1: Restore Initial Funding and Staffing Levels to IMPACT................................ 19 Option 2: Modify IMPACT by Reducing Provider Reimbursement............................... 20 Option 3: Establish a Medi-Cal Prostate Cancer Treatment Program ........................... 21 The California Breast and Cervical Cancer Treatment Program (BCCTP) ............ 22 Barriers to a Prostate Cancer Program Modeled after BCCTP ................................ 22 The Delaware Cancer Treatment Program.................................................................. 25 Barriers to a Prostate Cancer Program Modeled after the DCTP: the Role of Health Advocacy Groups ............................................................................................................ 25 Option 4: No Statewide Prostate Cancer Treatment Program ........................................ 27

Methods of Analysis.................................................................................................................... 28 Estimating Costs in our Model ...................................................................................... 28 Estimating Outcomes in our Model............................................................................... 28 Reporting Cost-Effectiveness Results ........................................................................... 29 Cost-Effectiveness Analysis Using Markov Modeling Techniques .................................. 30 Choosing an Optimal Statewide Prostate Cancer Program ................................................... 31 Cost-effectiveness is Necessary, but not Sufficient....................................................... 31 The Program must be Financially Feasible .................................................................. 31 Programs should be Consistent with State Cancer Control Objectives .................... 31 A Stable Program Requires Strong Advocacy and Political Support........................ 31 Results .......................................................................................................................................... 33 Cost-Effectiveness Results Assuming the Best-Case Scenario.......................................... 34 Cost-Effectiveness Results Assuming the Worst-Case Scenario ...................................... 35 Accounting for Unequal Treatment Outcomes between Programs ................................. 37 Discussion/Conclusions............................................................................................................... 39 Recommendations....................................................................................................................... 41 Appendix...................................................................................................................................... 44

EXECUTIVE SUMMARY Prostate cancer is the most common cancer diagnosis, and second leading cause of cancer death, among men in the United States. Every year in California, an estimated 1,200 low-income, uninsured men are diagnosed with prostate cancer. On average, these men are younger than most U.S. men diagnosed with prostate cancer, present with moderate to highly aggressive tumors, and present at a later stage of disease than patients in the general population. Without treatment, these patients are at high risk of cancer progression and excess mortality from prostate cancer. Because prostate cancer treatment is highly specialized, and provided by a relatively scarce group of subspecialty physicians, low-income, uninsured men face substantial barriers accessing prostate cancer treatment in their local communities. To improve access to treatment for this patient population, the California legislature passed a law establishing a statewide prostate cancer treatment program. The contract for this program has been administered by UCLAIMPACT since April 2001. In its short 5-year history, IMPACT has experienced five budget cuts, two enrollment suspensions and, on two occasions, threats to terminate program funding altogether. Decreased funding and enrollment suspensions have led to long waitlists for patient services, undermining the ability of the program to provide low-income, uninsured Californians with access to quality prostate cancer care. Citing high administrative expense and unproven program effectiveness, the governor line-item vetoed funding for the program in the FY2005-2006 State Budget. The legislature restored program funding with the passage of SB 650, but as a requirement for continued funding have requested a full program evaluation. This report presents the results of an independent analysis of the IMPACT program, including a cost-effectiveness analysis, which is a necessary component of the full program evaluation. In our analysis of the IMPACT program, we did not find evidence of high administrative costs. In FY 2004-2005, true administrative expenses accounted for only 11% of the programâ&#x20AC;&#x2122;s budget, and clinical staff expenses accounted for 23% of the total budget. The ratio of fixed costs to patient treatment costs was also distorted by the lengthy enrollment suspension in that fiscal year. Clinical staff are essential to meeting the objectives of the IMPACT program, which include not only improving access to treatment, but also reducing disparities in treatment outcomes for low-income, uninsured Californians with prostate cancer. From a societal standpoint, IMPACT is a cost-effective strategy for providing low-income, uninsured Californianâ&#x20AC;&#x2122;s with reasonable access to prostate cancer-specific treatment. This is true whether we compare IMPACT to the county safety net, or to a hypothetical prostate cancer treatment program modeled after the state component of the Medi-Cal Breast and Cervical Cancer Treatment Program. Although in theory a Medi-Cal prostate cancer program would be cost-effective, in practice there are too few specialty providers who both treat prostate cancer and accept new Medi-Cal fee-for-service patients for such a program to be practical.

In order to decrease prostate cancer-related disparities among low-income, uninsured Californians, we recommend that the State: ♦ Establish stable and consistent funding for the IMPACT program. ♦ Allow IMPACT to use a provider reimbursement scheme that will encourage adequate provider participation in the program. ♦ Increase program funding to a level adequate to support the primary goals and objectives of the IMPACT program, which are consistent with California’s own comprehensive cancer control objectives. ♦ Require and support IMPACT’s data collection and analysis activities. The information generated by these activities is important for program quality assurance, and essential for quantifying how effectively the “value added” program services reduce cancer-related disparities among low-income, uninsured men with prostate cancer.

INTRODUCTION An estimated 232,090 men in the United States were diagnosed with prostate cancer last year, making this the most common cancer diagnosis in U.S. men, and the second leading cause of cancer death in this population. 1 Ten percent of these new prostate cancer diagnoses occur among men who live in the state of California.2 Moreover, approximately 1,200 low-income, uninsured or underinsured Californians are diagnosed with prostate cancer each year. 3 To address the health care needs of this population, the California legislature passed a law in 2000 authorizing the funding and development of a statewide prostate cancer treatment program, which led to the creation of IMPACT (Improving Access, Counseling and Treatment for Californians with Prostate Cancer). IMPACT provides access to prostate cancer-related health care for uninsured and underinsured California residents, over the age of 18, who have incomes less than or equal to 200% of the federal poverty level, and a documented diagnosis of prostate cancer.4 The UCLA Department of Urology has administered the program contract since it was first awarded in April 2001. IMPACT was originally contracted at $50 million for the period April 2001 through June 2003, but as a result of the State’s fiscal crisis, the program experienced a fifty-percent budget reduction in its first six months of operation, followed by an additional seventy-five percent budget cut in June 2003. For the two year period July 2003 through June 2005, IMPACT operated with a budget of approximately $5 million annually. Consequent to these budget cuts, the program also experienced two lengthy enrollment suspensions during this period, effectively limiting the fiscal year 2004-2005 enrollment to six and a half months. In the 2005-2006 State Budget, the Legislature appropriated $3 million to continue the program contract with IMPACT, but this funding was line-item vetoed by the Governor, who cited high administrative costs and unproven program effectiveness in his decision to terminate program funding.5 With passage of Senate Bill 650 (SB 650) in November 2005, funding for IMPACT was restored at $2.4 million for the remaining seven months of the fiscal year. Continued funding of the IMPACT program is contingent upon the results of a full program evaluation, which must be presented to the California state legislature by July 2006. The purpose of this report is to present the results of an independent evaluation of the IMPACT program, including a cost-effectiveness analysis, which is a required component of the full program evaluation.

Ahmedin J, et al. CA Cancer J Clin, 2005; 55:11. Accessed 12/10/05 at http://caonline.amcancersoc.org/cgi/reprint/55/1/10 (NB:These data exclude basal and squamous cell skin cancers.) 2 Ibid. 12 3 Prostate cancer incidence per 100,000 Californians provided by the California Department of Health Services (DHS), Cancer Detection Section (CDS), California Cancer Registry (11/02). Estimates of incidence of uninsured Californians with prostate cancer calculated from: E.R. Brown, Y-Y Meng, C.A. Mendez, H. Yu. “Uninsured Californians in Assembly and Senate Districts 2000,” UCLA Center for Health Policy Research, May 2001. 4 Section 104322 of California Health and Safety Code 5 Governor Arnold Schwarzenegger, 2004-2005 Governor’s Budget Summary/Veto Message Package, p 45. Accessed 2/8/06 at http://www.dof.ca.gov/html/Budget_05_06/Veto_Pkg_05/Veto_05_Pkg_w2.pdf

We first provide a brief review of the clinical information essential to a thoughtful policy discussion of prostate cancer. We then turn our attention to an evaluation of the California statewide prostate cancer treatment program. Specifically, this report: ¾ examines the need for a statewide program to provide prostate cancer care to lowincome, uninsured Californians with a diagnosis of prostate cancer ¾ presents options for alternative statewide prostate cancer treatment programs ¾ compares the cost-effectiveness, political and technical feasibility of IMPACT relative to alternative statewide prostate cancer treatment programs, and finally ¾ provides a closer look at the design of the original IMPACT program, how this design facilitates the program’s mission, and how it relates to California’s comprehensive cancer control objectives

CLINICAL BACKGROUND Prostate cancer is the most commonly diagnosed malignancy among U.S. men, and was the cause of death in over 30,000 of these men last year. 6 Nevertheless, because many men diagnosed with prostate cancer will not die of prostate cancer, significant controversy surrounds the management of this disease. In this section we provide an overview of prostate cancer epidemiology, diagnosis, staging and treatment in the general U.S. population. We then describe the clinical and demographic characteristics that distinguish IMPACT patients from the general population and discuss how these differences establish a clear need for therapeutic intervention among low-income, uninsured men with prostate cancer.

Who is at Risk for Prostate Cancer? Prostate cancer is predominantly a disease of the elderly. Nationwide, the mean age at which prostate cancer is diagnosed is 70.6 years for white Americans, and 68.7 years for black Americans. 7 Men with prostate cancer may experience very different health consequences, depending upon cancer-specific characteristics (tumor grade and cancer stage), as well as patient-specific characteristics (genetic factors, age, and overall health status at the time of diagnosis).8 A number of studies have established the role of expectant management, also called active-surveillance or “watchful waiting,”9 for patients with less than a ten-year life expectancy; low-grade, early stage cancers; and poor overall health.10 Misinterpretation of these studies, however, may lead some policy-makers and health care practitioners to conclude incorrectly that it is reasonable to delay, or avoid entirely, the treatment of any patient with prostate cancer.

How is Prostate Cancer Diagnosed in Low-Income, Uninsured Men? Prostate cancer is diagnosed definitively by biopsy of the prostate gland. Because early stage prostate cancer generally does not cause symptoms, low-income, uninsured patients come to clinical attention, and get referrals for a prostate biopsy, in a number of ways. Some men are seen in emergency departments, community clinics, or by their primary care physicians for unrelated conditions, and undergo physical exams that yield evidence of abnormalities of the prostate.11 Some patients, particularly those with a strong family history of prostate cancer, may request prostate cancer screening. In general, however, low-income, uninsured Californians have 6

Ahmedin J, et al. CA Cancer J Clin, 2005; 55:11. Accessed 12/10/05 at http://caonline.amcancersoc.org/cgi/reprint/55/1/10 National Cancer Institute, SEER Program. Prostate Cancer Incidence and Mortality. Accessed 12/12/05 at http://seer.cancer.gov/publications/prostate/inc_mort.pdf 8 Presti, J. “Neoplasms of the Prostate,” in Smith’s General Urology, 15th ed. Edited by Tanagho, E and McAninch, J. (The McGraw-Hill Companies, Inc., 2000), 406-407 9 Expectant management, or watchful waiting, refers to observation and regular monitoring without active treatment, and should not be confused with no treatment. 10 Johanson J, et al. “Natural History of Early, Localized Prostate Cancer,” JAMA, 2004; 291: 2713-2719 and Bhatnagar V, Kaplan R. “Treatment Options for Prostate Cancer: Evaluating the Evidence,” American Family Physician, 2005; 71(10): 1915-1922 and Chodak G, et al. “Results of Conservative Management of Clinically Localized Prostate Cancer,” NEJM, 1994; 330(4): 242-248 and Albertsen P, Hanley J, Fine J. “20-Year Outcomes Following Conservative Management of Clinically Localized Prostate Cancer,” JAMA, 2005, 293(17): 2095-2101. 11 Nodularity or asymmetry of the prostate gland raises concern for the presence of prostate cancer, and may prompt further diagnostic studies. 7

very low prostate cancer screening rates. Using data from the 2001 California Health Interview Survey, researchers at the UCLA Center for Health Policy Research found overall screening rates of 24.2% among men aged 50-64 who were under 200% of federal poverty, and rates of only 17.1% for 50-64 year old uninsured men.12 IMPACT enrolls only men with a biopsy-proven diagnosis of prostate cancer, and does not offer or pay for screening. In addition to a physical exam, prostate cancer screening employs a simple blood test for Prostate Specific Antigen (PSA). 13 As the name suggests, PSA is a molecule produced only by prostate cells, and found at low levels in the blood of healthy men who still have a functioning prostate gland. Elevated levels of PSA correlate with the presence of prostate cancer, but may also be detected in men with non-cancerous enlargement of the prostate gland. Although very high levels (greater than 10 ng/mL) are more likely to indicate cancer, and low levels (less than 4 ng/mL) are less likely to indicate cancer, much diagnostic uncertainty exists for patients with PSA levels between 4-10 ng/mL.14 Many men screened for prostate cancer with a PSA test will fall within this uncertain range, prompting some potentially unnecessary prostate biopsies. Positive biopsies may also lead to over-treatment, because many prostate cancers are slow growing, non-aggressive tumors, and may be clinically inconsequential to a very sick, elderly patient who is more likely to die of causes other than prostate cancer.15 PSA testing is also a tool used to monitor for recurrence of prostate cancer. After treatment for prostate cancer, PSA levels decline rapidly, and eventually fall to (essentially) zero in completely treated patients. If PSA levels do not fall to zero, or if levels do fall to zero initially, but begin to rise over subsequent years, this signals prostate cancer recurrence, which is referred to as “biochemical failure” (BCF). Patients with BCF generally begin new therapies to inhibit cancer growth and spread, and are watched more closely by their treating physician.

What are the Guidelines for Treating Prostate Cancer? Prostate Cancer Staging Cancer stage is a measure of cancer severity and spread throughout the body. Staging of prostate cancer in the U.S. conforms to a system described by the American Joint Committee on Cancer (AJCC).16 Briefly, stages I-II prostate cancers, called localized prostate cancers, are completely contained within the prostate gland. Stage III tumors, referred to as local-regional cancers, have pierced through the prostate “capsule,” but have not invaded surrounding structures. Finally, stage IV prostate cancers are metastatic, and have spread to lymph nodes, surrounding structures, and/or parts of the body distant from the prostate (e.g. bone metastasis).17 Prognosis for survival decreases significantly with progression beyond stage II prostate cancer. 12

Ponce, N., et al. “Cancer Screening in California: Findings from the 2001 California Health Interview Survey,” UCLA Center for Health Policy Research, December 2003: 48-51 13 Presti, J. “Neoplasms of the Prostate,” in Smith’s General Urology, 15th ed. Edited by Tanagho, E and McAninch, J. (The McGraw-Hill Companies, Inc., 2000), 409 14 Kreder, K and Williams, R. “Urologic Laboratory Examination,” in Smith’s General Urology, Ed. Tanagho, E and McAninch, J. (The McGraw-Hill Companies, Inc., 2000), 50-64 15 Presti, J. “Neoplasms of the Prostate,” in Smith’s General Urology, 15th ed. Edited by Tanagho, E and McAninch, J. (The McGraw-Hill Companies, Inc., 2000), 406 16 “Prostate,” in American Joint Committee on Cancer: AJCC Staging Manual. 6th ed. (New York, Springer, 2002), 309-316 17 “Prostate,” in American Joint Committee on Cancer: AJCC Staging Manual. 6th ed. (New York, Springer, 2002), 309-316.

Prostate Cancer Grading Prostate cancer grade helps clinicians predict whether the cancer is likely to be slow growing, or aggressive and prone to spread outside of the prostate. Grade is based on the microscopic appearance of the tumor. In the U.S, most clinicians use the Gleason grading system. Grades range from 1 (indolent) to 5 (aggressive), and in-between grades reflect the intermediate behavior of the tumor between these two extremes. Two grades are assigned to each tumor. The first grade is that of the most commonly observed microscopic pattern, and the second is that of the next most observed pattern. Because the Gleason score is the sum of these two numbers, prostate cancer specimens are assigned a Gleason score between 2 and 10. All prostate cancers have some probability of progression, but tumors with a Gleason score of 7 are considered moderately aggressive, and tumors with Gleason scores greater than or equal to 8 are highly aggressive.18

When is Expectant Management Appropriate? The ideal candidate for expectant management of prostate cancer is an elderly patient with coexistent medical conditions (e.g. severe heart disease), a life expectancy less than ten years, who has localized and low-grade prostate cancer.19 In the U.S. today, this strategy is common in such patients. Expectant management is also an acceptable strategy for some healthy elderly patients with localized, low-grade prostate cancer.20 However, the risk of complications or death from prostate cancer is higher in patients with a longer life expectancy because the tumor has a longer period of time in which to grow and spread. Patients who choose expectant management must be monitored regularly by a physician for indications of cancer progression. Patients with local-regional cancers are generally not candidates for expectant management unless they are in extremely poor health, with a very short life expectancy.

What Active Treatment Options are Available for Prostate Cancer? Treatment options for patients with localized prostate cancer who do not choose expectant management include: surgical removal of the prostate gland (most often by a procedure called a radical retropubic prostatectomy or RRP); radiation therapy, either externally applied (XRT) or from small radioactive pellets placed within the prostate (brachytherapy); hormonal therapy to suppress male hormone production, or surgical removal of the testes (orchiectomy). Of these treatments, only prostatectomy and radiation therapy are considered potentially curative. Both RRP and XRT may result in long-term complications of urinary incontinence and sexual dysfunction. For this reason, treatment decisions must be made by a patient who is well-informed regarding his diagnosis, risk of cancer progression, and the risks and benefits of treatment.21 Patients with local-regional disease are generally treated with XRT, hormone therapy, or a

Presti, J. “Neoplasms of the Prostate,” in Smith’s General Urology, 15th ed. Edited by Tanagho, E and McAninch, J. (The McGraw-Hill Companies, Inc., 2000), 406-408 19 Johanson J, et al. “Natural History of Early, Localized Prostate Cancer,” JAMA, 2004; 291: 2713-2719 and Bhatnagar V, Kaplan R. “Treatment Options for Prostate Cancer: Evaluating the Evidence,” American Family Physician, 2005; 71(10): 1915-1922 and Chodak G, et al. “Results of Conservative Management of Clinically Localized Prostate Cancer,” NEJM, 1994; 330(4): 242-248 and Albertsen P, Hanley J, Fine J. “20-Year Outcomes Following Conservative Management of Clinically Localized Prostate Cancer,” JAMA, 2005, 293(17): 2095-2101 20 Adolfsson, G and Hedlund, P. “Deferred Treatment of Clinically Localized Low-Grade Prostate Cancer: Actual 10-Year and Projected 15-Year Follow-up of the Karolinska Series,” Urology, 1997; 50 (5): 722-726 21 Bhatnagar V, Kaplan R. “Treatment Options for Prostate Cancer: Evaluating the Evidence,” American Family Physician, 2005; 71(10): 19151922

combination of XRT and hormone therapy. Metastatic prostate cancer is treated with hormone therapy, palliative radiation therapy and chemotherapy.

Are Low-Income, Uninsured Men with Prostate Cancer a High Risk Group? As discussed previously, prostate cancer is most often a disease of the elderly. In the U.S., the average age at which prostate cancer is diagnosed is 70 years. About 75% of U.S. men newly diagnosed with prostate cancer are over the age of 65,22 making most of these men eligible for Medicare. The men who qualify for enrollment in IMPACT are not eligible for Medicare, and present a stark demographic contrast to the average American man with a new diagnosis of prostate cancer. Table 1 shows demographic and clinical characteristics of patients enrolled in the IMPACT program between June 2001 and June 2005. Many of these characteristics correlate with a higher risk of death from untreated Table 1: Characteristics of IMPACT prostate cancer. Patients from 2001-2005 With a mean age of 60 at the time of diagnosis, these patients are significantly younger than the national mean (one-sample t-test, p < 0.001). Whereas 75% of men nationwide are diagnosed with prostate cancer after age 65, more than 80% of the men eligible for IMPACT were younger than 65, and 50% were younger than 60 years of age, at the time of their diagnosis. With the exception of prostate cancer, the average IMPACT enrollee is also healthy. Ninety percent of these men have a Charlson Co-Morbidity Score (CCS) of â&#x2030;¤ 1, which suggests that they have no other major medical problems. Because most men eligible for enrollment in IMPACT are relatively young and healthy, with longer life expectancies than the average U.S. man diagnosed with prostate cancer, IMPACT patients are at much greater risk of disease progression and death from untreated prostate cancer. IMPACT enrollees also differ from the national mean with respect to cancer stage at the time of diagnosis. Only 5% of all U.S.

Demographic Characteristics Mean age at diagnosis Median age at diagnosis (range) Age distribution (%) 38-50 51-60 61-70 >70 Race/Ethnicity (%) Hispanic Black White Asian Other Clinical Characteristics Gleason Score (%) 2-4 5-6 7 8-10 AJCC Stage at diagnosis (%) Stage I-III Stage IV *Charlson Co-morbidity Score (%) 0 1 2+ *N=354 patients

N=669 60 yr 60 yr (38-88 yr) 8.5 48.4 33.0 10.1 341 (51) 120 (18) 134 (20) 40 (6) 34 (5) N=598 3 43 30 24 87 13 245 (69) 77 (22) 32 (9)

22 National Cancer Institute, SEER Program. Prostate Cancer: Incidence and Mortality. Accessed 12/12/05 at http://seer.cancer.gov/publications/prostate/inc_mort.pdf

men diagnosed with prostate cancer present with stage IV disease, compared with 13% of IMPACT patients (one-sample t-test, p < 0.001). 23 In addition, 30% of the men enrolled in IMPACT have moderately aggressive Gleason 7 tumors, and approximately 25% have the most aggressive type of tumor, with Gleason scores of 8 to 10. The unique demographic and clinical characteristics of IMPACT enrollees have been stable throughout the programâ&#x20AC;&#x2122;s 5-year existence. Among the spectrum of men diagnosed with prostate cancer in the U.S., this group of patients lies at the extremes of risk for the development of complications, and death, from their cancer. With few exceptions, these men are exceedingly poor candidates for delayed treatment.

Ahmedin J, et al. CA Cancer J Clin, 2005; 55: 27. Accessed 12/10/05 at http://caonline.amcancersoc.org/cgi/reprint/55/1/10

POLICY CONTEXT: Disparities in Cancer Treatment Access and Outcomes In the absence of a statewide prostate cancer program, low-income, uninsured men with prostate cancer must seek treatment from an increasingly strained county health system, which has limited ability to provide the specialty care needed to treat prostate cancer. To improve treatment access for this population, the California Legislature passed Health and Safety Code §104322 in 2000, directing the Department of Health Services to create a statewide prostate cancer treatment program.24 The program contract was awarded to the UCLA Department of Urology, and the UCLA-IMPACT program established in April 2001. Though IMPACT was the first program of its kind in the U.S., there are now several statelegislated, disease-specific cancer programs across the country. These programs emerge from a broader framework of statewide Comprehensive Cancer Control (CCC) plans, which prioritize efforts to reduce cancer-related disparities among low-income, minority, and uninsured individuals. Cancer-related disparities, however, refer not only to unequal cancer burden and lack of access to quality treatment, but also to unequal treatment outcomes experienced by these population groups. In this section, we describe access barriers faced by low-income, uninsured men with prostate cancer, as well as factors associated with persistent cancer-related disparities even after treatment is realized. We then examine how the original design of IMPACT relates to California’s own comprehensive cancer control plan, and the goal of decreasing cancer-related disparities. Finally, we show how this goal determines program staffing and budget requirements for the IMPACT program.

The Shrinking Safety Net for Uninsured Adults in California The ultimate responsibility for providing health care to the State’s uninsured adults rests with the 58 individual counties.25 County programs and services are often referred to as the health care “safety net” for medically indigent adults. Welfare and Institutions Code §17000, enacted by the California legislature in 1933, establishes the county health system as the “provider of last resort,” but allows for considerable discretion, with respect to services provided and eligibility requirements, among California’s 58 county programs. These differences yield significant variability in access to medical care for California’s uninsured, depending on their county of residence.26

Fewer Resources, but a Growing Need for Services Counties rely on several unpredictable and tenuous sources for public hospital and health system financing.27 Diminished funding for indigent care and growing numbers of uninsured adults in 24 California Health and Safety Code §104322, (a), (2), directs the Department of Health Services to “develop, expand, and ensure quality prostate cancer treatment for low-income and uninsured men” through a program contract awarded to one or more private or public non-profit organizations. 25 Kelch, D. “Caring for Medically Indigent Adults in California: A History,” California HealthCare Foundation, June 2005: 8-10 Accessed 1/16/06 at www.chcf.org/documents/policy/CaringForMedicallyIndigentAdults.pdf 26 Kelch, D. “The Crucial Role of Counties in the Health of Californians: An Overview,” California HealthCare Foundation, June 2004: 6-11 Accessed 1/16/06 at www.chcf.org/documents/policy/RoleCountiesInHealthOfCalifornians.pdf 27 County health systems receive funding through six major funding streams: Medi-Cal reimbursement, Medi-Cal DSH payments, Tobacco Tax revenues (Prop 99), Medicare GME payments, “realignment funds,” and county general funds. In 1989-1990, the large counties (and two rural

California have placed tremendous strain on the county safety net.28 County hospitals constitute only 6% of all California hospitals, but provide over 50% of care to uninsured patients.29 Many counties no longer operate a public hospital. In 1964, 50 counties operated 66 public hospitals. By 2004, 15 counties operated a total of only 22 county-owned facilities, and four counties contracted with University of California medical centers to serve as public providers. Based on projections made by the California Association of Public Hospitals, the budget shortfall for California’s public hospitals and health systems will be at least $3 billion by the year 2007.30 Counties that continue to operate public facilities have been forced by budget constraints to cut staff, decrease services, and charge co-payments for services provided to medically indigent adults. 31 Such cost-sharing requirements have a significant adverse effect on access to care among low-income, uninsured persons. Using data from the California Health Interview Survey, researchers at the UCLA Center for Health Policy Research found that 72% of uninsured respondents (and approximately 60% of underinsured respondents) delayed medical care because of cost or lack of insurance.32 California’s 34 smaller counties provide basic health care services to the medically indigent population through a joint county/state program called the County Medical Services Program (CMSP). Only U.S. citizens and California residents with legal immigration status are eligible (undocumented workers are only eligible for emergency services), and program enrollees must be treated by CMSP providers (i.e. Medi-Cal providers).33

Barriers to Specialty Care in California’s Safety Net If access to health care is “the timely use of affordable personal health services to achieve the best possible health outcomes,” then access to specialty care is particularly difficult for uninsured adults in California.34 In a California HealthCare Foundation survey of all 101 federally qualified health center (FQHC) medical directors in California, 85% of respondents reported that their uninsured patients “often” or “almost always” experienced problems gaining access to specialists.35 Only 5% reported that their uninsured patients “never” or “rarely” had difficulty counties) that receive Prop 99 Tobacco funds received approximately $336 million. In 2001-2002, this amount decreased to $66 million. Realignment funds are derived from a percentage of state sales tax revenues and vehicle license fees. Source: “On the Brink: How the Crisis in California’s Public Hospitals Threatens Access to Care for Millions,” California Association of Public Hospitals and Health Systems, 2003. Accessed 3/3/06 at www.caph.org/publications/WhitePaperFINAL.pdf 28 Baldassare, M. and Newman, M. “The State Budget and Local Health Services in California: Surveys of Local Health Officials,” Public Policy Institute of California, September 2005: 7-9. Accessed 5/4/06 at www.calendow.org/references/publications/pdf/npolicy/OP_MPOB.pdf 29 Kelch, D. “The Crucial Role of Counties in the Health of Californians: An Overview,” California HealthCare Foundation, June 2004: 6 Accessed 1/16/06 at www.chcf.org/documents/policy/RoleCountiesInHealthOfCalifornians.pdf 30 “On the Brink: How the Crisis in California’s Public Hospitals Threatens Access to Care for Millions,” California Association of Public Hospitals and Health Systems, 2003. Accessed 3/3/06 at www.caph.org/publications/WhitePaperFINAL.pdf 31 Kelch, D. “The Crucial Role of Counties in the Health of Californians: An Overview,” California HealthCare Foundation, June 2004: 7-8. Accessed 1/16/06 at www.chcf.org/documents/policy/RoleCountiesInHealthOfCalifornians.pdf See also, Gusmano, K., Fairbrother, G. and Park, H. “Exploring the Limits of the Safety Net: Community Health Centers and Care for the Uninsured,” Health Affairs, Nov/Dec 2002, 21 (6): pp 188-194; and Baldassare, M. and Newman, M. “The State Budget and Local Health Services in California: Surveys of Local Health Officials,” Public Policy Institute of California, September 2005: 7-9. Accessed 5/4/06 at www.calendow.org/references/publications/pdf/npolicy/OP_MPOB.pdf 32 Brown, R., et al. “County Residency and Access to Care for Low- and Moderate-Income Californians,” UCLA Center for Health Policy Research, March 2004. 33 Kelch, D. “Caring for Medically Indigent Adults in California: A History,” California HealthCare Foundation, June 2005: 10 and County Medical Services Program (CMSP) Summary, accessed 3/1/06 at www.healthconsumer.org 34 Millman, M. Access to Health Care in America. Washington D.C.: National Academy Press, 1993. Quoted in Mandelblatt, J., Yarbroff, K. and Kerner, J. “Equitable Access to Cancer Services: A Review of Barriers to Quality Care,” Cancer, 1999; 86 (11): 2378; and Felt-Lisk S, McHugh M, Thomas M. “Examining Access to Specialty Care for California’s Uninsured: Full Report.” California HealthCare Foundation, June 2004. Accessed 11/23/05 at www.chcf.org/documents/insurance/AccessToSpecialtyCareForCalifUninsuredReport.pdf 35 An FQHC provides primary health care to a medically underserved population, and meets specific eligibility criteria for federal grants. For a list of specific criteria, see U.S. Code Title 42, Chapter 6A, Sub-chapter II, Part D, Sub-part I, §254b.

obtaining specialty care.36 When asked specifically about access to urologists, the specialists who treat prostate cancer, 63% of the responding medical directors stated that their uninsured adult patients “often” or “almost always” had difficulty. 37 Respondents most commonly identified three major barriers to specialty care access for uninsured adults: unwillingness of specialty providers to accept uninsured patients, a shortage of specialists, and excessively long wait times for appointments.38 In settings where urology appointments were very difficult to schedule, wait times for an outpatient urology appointment ranged from 25 to 128 days, with an average wait time of 79 days.39 Long waits delay needed treatment, increase the psychological stress associated with a new diagnosis of cancer, and frustrate some patients into abandoning the search for treatment until they experience symptoms and are no longer curable. Access difficulties persist even after these patients are seen and examined by specialty providers, as “it is very difficult, if not impossible, to secure specialty procedures at a hospital if the patient is not in an emergent state.”40

Felt-Lisk S, McHugh M, Thomas M. “Examining Access to Specialty Care for California’s Uninsured: Full Report.” California HealthCare Foundation, June 2004: 12-13. Accessed 11/23/05 at www.chcf.org/documents/insurance/AccessToSpecialtyCareForCalifUninsuredReport.pdf [NB: Seventy-seven medical directors returned the surveys, for a response rate of 76%.] 37 Ibid. 14 38 Ibid. 14-15 39 Ibid. 20 40 Ibid. 20

Low-income Men Have Poorer Health Outcomes after Treatment Many factors beyond lack of insurance create health care access barriers for poor men with prostate cancer. Low-income men with prostate cancer have consistently poorer outcomes than higher income men, even after receiving similar medical treatment.41 Controlling for racial and ethnic differences, low-income remains a significant, independent predictor of poorer health outcomes.42 Researchers at the University of Table 2: Factors correlating with poor outcomes Texas MD Anderson Cancer Center N=669 IMPACT Patient Characteristics conducted a population-based study of Minority Status and Cultural Barriers 61,228 insured U.S. men with prostate Race/Ethnicity (%) cancer, and found that low-income men Hispanic 341 (51) experienced 22-40% greater prostate-cancer Black 120 (18) specific mortality than patients in the highest White 134 (20) income bracket (defined as median Asian 40 (6) household income greater than $43,875 Other 34 (5) Low Income annually).43 Factors correlated with poor outcomes after prostate cancer treatment include minority status, undocumented worker status, language barriers, cultural beliefs, distrust of the health care system, and low levels of education and health literacy.44 Low-income, uninsured men with advanced, metastatic prostate cancer also receive poorer palliative care and pain control than higher-income patients.45 As Table 2 illustrates, many of the characteristics that correlate with poor treatment outcomes are present in patients who qualify for the IMPACT program.

Mean monthly household income ($) 661.40 Education and Health Literacy Education Level (%) N=448 Not stated 54 (12) Grade school or less 116 (26) Some high school or tech school 56 (13) High school or tech school graduate 83 (18) Some college 87 (19) College graduate 52 (12) Language Barriers: Patients requiring translators (%) *158 (45) Undocumented Worker Status and Distrust of the HealthCare System **Patients who did not provide SSN (%) *80 (22) *N=355 **Used to estimate percentage undocumented.

In summary, the health care safety net appears barely adequate to meet the primary care needs of medically indigent adults, and demonstrably inadequate for the provision of the specialty care required by prostate cancer patients.46 Moreover, patients fortunate enough to obtain care within this system often do not achieve the best health outcomes possible for the treatment received.

Mandelblatt, J., Yarbroff, K. and Kerner, J. “Equitable Access to Cancer Services: A Review of Barriers to Quality Care,” Cancer, 1999; 86 (11): 2378-2381 42 Du, X., et al. “Racial Disparity and Socioeconomic Status in Association with Survival in Older Men with Local/Regional Stage Prostate Carcinoma,” Cancer, 2006, 106 (6): 1276-1285 43 Ibid. 1278-1281 44 Mandelblatt, J., Yarbroff, K. and Kerner, J. “Equitable Access to Cancer Services: A Review of Barriers to Quality Care,” Cancer, 1999; 86 (11): 2381 45 Ibid. 2381 46 Hoffman, C. and Sered, S. “Threadbare: Holes in America’s Health Care Safety Net,” The Kaiser Commission on Medicaid and the Uninsured, November 2005. Accessed 2/22/06 at www.kff.org/uninsured/upload/Threadbare-Hole-in-America-s-Health-Care-Safety-Net-report.pdf

Comprehensive Cancer Control in California Every state in the U.S. has adopted, or is in the process of adopting, a cancer control plan. Plan developers seek to reduce the burden of cancer using a comprehensive cancer control approach, which includes the funding and development of programs for basic science research, detection, treatment, and prevention of cancer. Cancer control plans place particular emphasis on strategies for reducing cancer-related disparities.47 On May 20, 2004, the California Dialogue on Cancer (CDOC), a coalition of California’s cancer control leadership, released to the public its Comprehensive Cancer Control Plan for California.48 CDOC has set a goal for ensuring “access to quality cancer care…with no disparity in outcomes [emphasis added] for all Californians.”49 For prostate cancer specifically, CDOC set the following goals and objectives:50 • • •

By 2010, reduce the prostate cancer mortality rate of California men, including men in high-risk groups, by 23%, from a baseline of 27.6 deaths per 100,000 men. By 2010, improve the quality of life of men with prostate cancer and their families while creating measures to monitor and evaluate quality of life improvements. By 2010, provide all California men diagnosed with prostate cancer timely access to treatment programs and information that will help them make an informed choice among treatment options, including the risks, benefits, and the impact on their quality of life.51

Strategies to achieve these goals and objectives included the following: •

By January 1, 2006, ensure consistent funding of existing prostate cancer mandates and programs for the low income, uninsured, and underinsured, and ensure that programs are culturally and linguistically appropriate for ethnic communities.52

IMPACT: A Closer Look at Program Design and Objectives Approach to Reducing Cancer-related Disparities In keeping with the consensus of cancer control leadership throughout the state of California, IMPACT was designed not only to remove health system access barriers faced by uninsured men with prostate cancer, but also to diminish health outcome barriers associated with minority status, low socioeconomic status, low levels of education and health literacy, language, and cultural differences. Some components of this original design included the following: 47 Hayes, N., et al. “Cancer-related disparities: weathering the perfect storm through comprehensive cancer control approaches,” Cancer Causes and Control, 2005; 16 (Suppl.1): 41-50. 48 Comprehensive Cancer Control in California, 2004. Oakland, CA: California Dialogue on Cancer, April 2004. Accessed 2/22/06 at www.cadoc.org/CDOC_2004_CCCP_Sum.pdf [CDOC membership includes a coalition of state and local officials; non-profit groups; members of the health, medical, research and business communities; cancer survivors, caregivers and other citizen advocates.] 49 Ibid. See also, Hayes, N., et al. “Cancer-related Disparities: Weathering the Perfect Storm through Comprehensive Cancer Control Approaches,” Cancer Causes and Control, 2005; 16 (Suppl. 1): 41-50. 50 Prostate Cancer. Comprehensive Cancer Control in California, 2004. Oakland, CA: California Dialogue on Cancer, 42-46. Accessed 2/22/06 at www.cadoc.org/CDOC_PLAN_pt2.pdf 51 Ibid. 42-46 52 Ibid. 45

•

An extensive provider network. IMPACT established contracts with over 700 providers throughout the State of California, decreasing travel burden and increasing the likelihood that poor, uninsured men with prostate cancer would be able to receive prostate cancer care in their local communities. Figure 1 shows the relative distribution of IMPACT patients and providers.

•

Culturally and linguistically appropriate patient educational material. IMPACT staff designed, tested and distributed to IMPACT patients culturally sensitive prostate cancer educational material, both in print (9 languages) and audio form (English and Spanish).

•

Figure 1: IMPACT Providers and Patients Extensive Social Service Resources. Outreach Coordinators collected data on community social services, cancer societies and advocacy groups, charitable organizations, local shelters, and organizations that prepare and distribute food to low-income persons.

•

Full-time clinical staff. IMPACT Clinical staff includes the Program Medical Director and Southern California Medical Director, Nurse Case Managers and Clinical Coordinators. The two Medical Directors communicate directly with treating physicians, review and approve all exceptions to treatment plans, and monitor each patient’s clinical course throughout enrollment in the program. ♦ Nurse Case Managers serve as a clinical resource to patients and their families provide case management, nursing assessments and interventions provide symptom management work with physicians, patients and patients’ family members to ensure that all concerns and treatment questions have been communicated and answered effectively before treatment decisions are made ♦ Clinical Coordinators assist Nurse Case Managers in the above function, and provide the following: social services assessments and referrals assistance obtaining necessary services and supplies, including support groups, shelters, food banks, transportation services, durable medical equipment, and access to clinical trials

coordinate patient clinical and laboratory appointments, ensuring appropriate follow-up care after treatment translation services (all Clinical Coordinators are bilingual)

Concerns about High Administrative Expense This original program design has been compromised by multiple budget cuts, leading to lengthy enrollment suspensions, staffing cuts, and decreased services to IMPACT enrollees. In part, funding instability resulted from the generally tighter State budget over the past five years. The Governor, however, specifically cited high administrative expense and unproven program effectiveness as justification for eliminating program funding entirely from the fiscal 2005-2006 budget. The legislature reacted to this concern over disproportionately high administrative costs by placing strict limitations on the proportion of program funds that could be allocated to administrative expenses. Specifically, SB 650 allows IMPACT to allocate a maximum of 30% of budgeted funds to fixed program costs, and mandates that only 13% of program funds be allocated to purely administrative functions. IMPACT’s True Administrative Costs in FY 2004-2005 The estimation of administrative expenses in any health care program is complicated, but a closer look at the IMPACT budget for fiscal 2004-2005 revealed several incorrect assumptions that resulted in inflated estimates of non-patient care program costs. Administrative costs vary across different types of health plans, but generally include those costs associated with transaction-related activities (application and claims processing) and benefit management (plan design, data collection and analysis, and information systems management). 53 Administrative costs do not include expenses for clinical staff, social services or health educators. Removing nurse case managers, clinical coordinators, health educators and other clinical personnel from the calculation of administrative expenses, IMPACT allocated approximately 11% of total expenditures to true administrative functions in fiscal year 2004-2005.54 The Effect of Enrollment Suspensions on Fixed Costs Administrative costs, like all fixed costs, are subject to economies of scale.55 The enrollment suspension that resulted in active enrollment for only six and a half months of fiscal year 20042005 had no effect on IMPACT’s fixed administrative costs, but substantially reduced the program’s only variable cost, that of provider reimbursements for patient treatment. Hence, the calculation of administrative costs as a percentage of total expenditures was inflated by the imposed enrollment suspension.

Thorpe, K. “Inside the Black Box of Administrative Costs,” Health Affairs, 1992 Summer; 11(2): 43-45 See Appendix A for a description of IMPACT fixed costs in FY04/05. 55 Thorpe, K. “Inside the Black Box of Administrative Costs,” Health Affairs, 1992 Summer; 11(2): 43 54

Options for a Statewide Prostate Cancer Treatment Program The IMPACT program has been subjected to five budget cuts in five years of operation, and twice has been threatened with program termination. Funding instability and enrollment suspensions impede program effectiveness by preventing patient enrollment and eliminating program services. Budget cuts and periodic threats of funding elimination shake provider faith in program stability, weakening program relationships with contracting providers and community referral organizations. Above all, an unstable program cannot serve California’s poor, uninsured men with prostate cancer, and long wait-lists for services place tremendous stress on patients, and their families, who are already struggling to cope with the burden of cancer. Whether by IMPACT or an alternative program, low-income, uninsured Californians with prostate cancer will be better served if California’s statewide prostate cancer treatment program is reliable and adequately funded. This program must also demonstrate cost-effectiveness in order to remain funded each year. In this section, we introduce several policy alternatives for a statewide prostate cancer treatment program, followed by the results of a cost-effectiveness analysis for each option.

Option 1: Restore Initial Funding and Staffing Levels to IMPACT As discussed in the previous section, IMPACT was designed not only to provide low-income, uninsured men with access to prostate cancer treatment, but also to improve their treatment outcomes to levels experienced by higher income patients. To meet this objective, IMPACT must employ non-administrative staff to provide additional clinical and social services to IMPACT enrollees. When IMPACT was established in April 2001, the program was contracted for $10 million for the remainder of fiscal 2000-2001, and $20 million for each of the next two fiscal years. However, because IMPACT experienced several large budget cuts almost from the beginning of program operations, it has never operated as originally contracted. Lengthy enrollment suspensions have also artificially depressed the number of program enrollees, and the ratio of the program’s fixed costs to patient treatment costs. Large budget cuts and enrollment suspensions significantly decrease the cost-effectiveness of the program. Program staffing cuts also compromise the ability of the program to function as more than a health care payer for lowincome, uninsured men with prostate cancer. Restoring IMPACT to its first year funding level of $10 million would allow IMPACT to remain fully staffed and continue providing IMPACT enrollees with the services intended in the program’s original design. At this level of funding, the program could enroll an estimated 350 new patients each year, and allocate approximately 25% of budgeted funds to total fixed costs (7% to true administrative functions, 18% to clinical staff functions).56 56

See Appendix A

Option 2: Modify IMPACT by Reducing Provider Reimbursement Prior to passage of SB 650, IMPACT used different reimbursement schemes for private and public providers. Private providers were reimbursed according to Region 18 Medicare rates.57 Physicians received payment of 100% of allowable fee-for-service (FFS) Medicare charges, based upon the Medicare Resource-based Relative Value Scale (RBRVS). 58 Private hospitals were reimbursed according to Medicare Diagnosis Related Group, or DRG, rates. 59 County physicians and hospitals were paid a case rate that was identical for all county providers throughout the state. 60 SB 650 requires IMPACT to change both public and private reimbursement to Medi-Cal fee-for-service rates. Medi-Cal uses a conversion factor that is conceptually analogous to the Medicare RBRVS to determine reimbursement for Medi-Cal FFS outpatient services. Because the Medi-Cal conversion factor is lower, it yields provider payment rates that are, on average, 59% of Medicare FFS reimbursement rates.61 Medi-Cal FFS hospital reimbursements, however, are not analogous to Medicare DRG payments. Approximately 85% of Medi-Cal hospital reimbursements are made to facilities participating in the Selective Provider Contracting Program (SPCP).62 The California Medical Assistance Commission (CMAC) negotiates payment rates confidentially with each participating hospital, and by California law these individual rates cannot be revealed publicly for a period of four years.63 This oversight in the language of SB 650 led to a potentially confusing, and costly, situation in which IMPACT would be billed full hospital charges, but would not know the actual reimbursement rate for each hospital. 64 For this reason, the California Department of Health Services (DHS) has allowed IMPACT to continue reimbursing private hospitals according to Medicare DRGs, and county hospitals at the original case rate, for the remainder of fiscal 20052006. IMPACT is still required to reimburse for private outpatient procedures according to the lower Medi-Cal payment rates. 57 This is the Medicare Fee Schedule for Los Angeles County. See 2005 Medicare Fee Schedule Fact Sheet, accessed 3/20/06 at www.medicarenhic.com/providers/fees/factsheetinfo_2005.htm 58 The Medicare RBRVS physician reimbursement schedule was authorized by Congress and implemented by HCFA (now CMS, the Center for Medicare & Medicaid Services) in 1992 as a way to adjust payment rates to reflect more accurately the actual resources associated with physician services. The three major factors considered in the calculation of the RBRVS, for different regions of the U.S., are actual physician work (time, skill, etc.), practice expense, and liability costs associated with each service provided. C.f. Marmor, T. The Politics of Medicare. 2nd ed. (New York: Aldine De Gruyter, 2000), 108-116, and Hsiao, W., et al. “An Overview of the Development and Refinement of the Resource-Based Relative Value Scale. The Foundation for Reform of U.S. Physician Payment,” Medical Care, 1992; 30 (11 Suppl): NS1-12. 59 The Medicare Prospective Payment System (PPS) was introduced in 1983 as a means to encourage “cost-efficient” management of inpatient medical care by paying hospitals a pre-set fee for treating particular conditions. Each patient is classified into a Diagnosis Related Group, or DRG, based on the reason the patient was admitted to the hospital, any surgical procedures completed during the hospitalization, pre-existing comorbidities and complications of treatment, age, gender, and discharge disposition. Patients assigned to a particular DRG are assumed to be clinically similar and to require similar resources for treatment. Each DRG has an assigned relative weight used to calculate the hospital reimbursement for patients within that DRG designation. As with RBRVS payments, regional differences in resource costs are taken into consideration in the calculation of final reimbursement rates. C.f. Chulis, G. “Assessing Medicare’s Prospective Payment System for Hospitals,” Medical Care Review, Summer 1991; 48 (2): 167-206. 60 The case rate system resembles a capitation system of payment. The county is paid a set amount each year for each patient it enrolls, regardless of the type of treatment the patient chooses (this covers all outpatient visits, labs, two imaging studies, etc for the entire year). The county also bills only once for each therapy the patient receives (e.g. $10,000 for a prostatectomy) regardless of associated complications or the number of follow up visits associated with the procedure. 61 “Medi-Cal Budget and Cost Drivers,” California HealthCare Foundation, January 2006:17 Accessed 1/26/06 at www.chcf.org/documents/policy/MediCalBudgetAndCostDrivers2006.pdf 62 Non-contracting hospitals are reimbursed on a cost-basis at the end of each fiscal year. Source: California Medical Assistance Commission: Annual Report to the Legislature 2005. Accessed 1/30/06 at www.cmac.ca.gov/files/annualreport2k5.pdf 63 Mervin Tamai, Research Director, California Medical Assistance Commission. Phone interview conducted 1/30/06. 64 Hospital charges are much higher than actual hospital costs for services provided. Large payers like Medicare, Medi-Cal and most private health insurance plans set (or negotiate) contracted payment rates that are significantly lower than hospital charges, and much closer to actual costs. For a further discussion of why the ratio of actual costs to charges is so distorted, please see Tompkins, C., Altman, S. and Eilat, E. “The Precarious Pricing System for Hospital Services,” Health Affairs, 2006; 25 (1): 45-56.

For practical reasons, the California legislature and DHS must address the need for a transparent in-patient reimbursement scheme. However, the cost inputs used in a cost-effectiveness analysis of the IMPACT program would not vary with different provider payment plans. As we will explain in the methods section of this report, cost-effectiveness analyses in health and medicine (as with most social programs) assume a societal perspective, and consider estimates of true resource costs rather than payment rates. 65 Fortunately, Medicare DRG rates and allowable Medicare FFS charges for outpatient care are good estimators of true resource costs for the treatment of prostate cancer.66 Although true resource costs would not be reduced by lower provider reimbursements, program effectiveness would be reduced for at least two reasons. First, because Medicare reimbursements for prostate cancer care are close to the actual resource cost of treatment, and Medi-Cal FFS reimbursements are, on average, only 59% of Medicare FFS rates, providers would not be compensated adequately to cover the cost of providing care under this system. Many providers would likely withdraw from the program, decreasing patient access to treatment. 67 IMPACT conducted an informal survey of contracting providers, and anticipates that 20-30% of these providers will eventually withdraw under the new outpatient reimbursement rates. A second reason for provider loss stems from the effect of eliminating the county case rate. The issue here is not the amount of reimbursement, but the associated disruption of the county hospital’s usual billing system.68 At least one large county hospital in Los Angeles has threatened to withdraw if the case rate system is not re-established. Provider loss and decreased access to care must be factored into our analysis of a modified IMPACT program that reimburses providers according to Medi-Cal FFS rates.

Option 3: Establish a Medi-Cal Prostate Cancer Treatment Program Regardless of how administrative costs are calculated, Medicare and Medicaid, with enormous economies of scale, boast the lowest percentage of administrative costs for any U.S. health plan, at about 2.1% and 5.1%, respectively. 69 Moving IMPACT-eligible patients into the federal Medicare system is not feasible, but the existence of at least two disease-targeted state programs – the California Breast and Cervical Cancer Treatment Program (BCCTP) and the Delaware Cancer Treatment Program – suggest that it may be possible to capitalize on the state Medicaid infrastructure to reduce administrative expenses associated with a statewide prostate cancer treatment program.

Weinstein, M. et al. “Recommendations of the Panel on Cost-Effectiveness in Health and Medicine,” JAMA, 1996; 276 (15): 1253-1258. Lave, J., et al. “Costing Medical Care: Using Medicare Administrative Data,” Medical Care, 1994; 32 (7): JS77-JS89, Supplement. 67 Although many factors contribute to low provider participation in state Medicaid programs, studies show that states with low Medicaid reimbursement rates have significantly fewer participating providers. C.f. Zuckerman, S., et al. “Changes in Medicaid Physician Fees, 1998-2003: Implications for Physician Participation,” Health Affairs, (web exclusive), June 2004: 374-384. Accessed 2/22/06 at www.healthaffairs.org In addition, physicians often cite low reimbursement as a major reason for lack of participation in Medicaid programs. C.f. Wang, E. et al. “Inequality of Access to Surgical Specialty Health Care: Why children with government-funded insurance have less access than those with private health insurance in Southern California,” Pediatrics, 2004; 114: 584-590 and Tucker, J. “Factors Influencing Physician Participation in Medicaid in the U.S.A.,” Intl J Social Economics, 2002; 29 (9): 753-762. 68 Information provided by IMPACT Program Administrator Laura Baybridge. 69 Thorpe, K. “Inside the Black Box of Administrative Costs,” Health Affairs, 1992 Summer; 11(2): 47 66

The California Breast and Cervical Cancer Treatment Program (BCCTP) In 2000, Congress authorized a Medicaid expansion and granted generous matching funds to states that opted to provide cancer screening and treatment to low-income, uninsured women diagnosed with breast or cervical cancer.70 The California BCCTP was implemented on January 1, 2002. This program grants full-scope Medi-Cal to BCCTP eligible patients, from the doctor’s office, on the same day that they receive a diagnosis of breast or cervical cancer.71 To meet federal eligibility criteria for full-scope Medi-Cal services, the applicant must be an uninsured California resident under age 65 (and therefore ineligible for Medicare), with income < 200% of FPL, and a U.S. citizen or resident alien with satisfactory immigration status.72 The California BCCTP is unique among states participating in the federal program, however, as it also includes a component funded solely by the state (with no federal matching funds) that provides limited Medi-Cal coverage for Californians who do not meet federal eligibility criteria. This state-funded program provides cancer-specific treatment only, not full-scope Medi-Cal coverage, for 18 months for women with breast cancer, and 24 months for women diagnosed with cervical cancer. Of particular note, patients covered under the state-only component of California’s BCCTP include individuals without satisfactory immigration status.73

Barriers to a Prostate Cancer Program Modeled after BCCTP The Deficit Reduction Act of 2005 On February 8, 2006, President Bush signed the Deficit Reduction Act of 2005, which includes provisions for reducing federal Medicaid expenditures by $4.8 billion over the five-year period 2006-2010 ($26.1 billion over the ten-year period 2006-2015).74 In light of this latest measure to reduce federal spending on the Medicaid program, a federal Medicaid expansion for men with prostate cancer seems unlikely. However, a statewide prostate cancer treatment program modeled solely on the state component of BCCTP may be feasible because it would require approval at the state level only. Provider Participation in a Medi-Cal Prostate Cancer Program A formidable obstacle to the success of a prostate cancer treatment program modeled after the California BCCTP is the potential scarcity of specialty providers—urologists, radiation and medical oncologists—who accept new Medi-Cal patients. Physicians participating in the California BCCTP must be Medi-Cal providers, and are reimbursed according to the current Medi-Cal fee schedule. Primary care providers and women’s health advocates working closely 70

Breast Cancer Prevention and Treatment Act of 2000 (42 USC 1305). Accessed 2/9/06 at http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=106_cong_public_laws&docid=f:publ354.106.pdf 71 California Cancer Detection Section, California Breast and Cervical Cancer Treatment Program (BCCTP). Accessed 2/2/06 at www.dhs.ca.gov/mcs/WomensHealth/BCCTP%20DHS%20web7_files/frame.htm 72 Specifically, the patient must be uninsured, screened in a federally approved program and found to be in need of treatment for breast and/or cervical cancer, follow-up care for cancer, or pre-cancerous cervical lesions and/or conditions; a California resident under age 65 (and therefore not eligible for Medicare); a U.S. citizen or resident alien with satisfactory immigrations status; and have monthly gross family income less than 200% of the federal poverty level. California Cancer Detection Section, California Breast and Cervical Cancer Treatment Program (BCCTP). Accessed 2/2/06 at www.dhs.ca.gov/mcs/WomensHealth/BCCTP%20DHS%20web7_files/frame.htm 73 California Cancer Detection Section, California Breast and Cervical Cancer Treatment Program (BCCTP). Accessed 2/2/06 at www.dhs.ca.gov/mcs/WomensHealth/BCCTP%20DHS%20web7_files/frame.htm 74 “Deficit Reduction Act of 2005: Implications for Medicaid,” Kaiser Commission on Medicaid and the Uninsured, February 2006, accessed 3/15/06 at www.kff.org/medicaid/upload/7465.pdf

with BCCTP patients report increasing numbers of providers withdrawing from the program due to administrative hassle and low reimbursement. This has led to difficulty locating providers in some parts of the state, and delays in both the diagnosis (biopsy procedure) and treatment of some BCCTP patients.75 Researchers at the UCLA School of Medicine are currently engaged in a longitudinal study to examine both access to care and quality of care in the BCCTP. Although treatment data are not yet available, data for the pre-treatment period, obtained from surveys and focus groups, reveal significant delays in the diagnostic process.76 According to a study by the Medi-Cal Policy Institute, only 48% of urban (37% of rural) medical specialists were accepting new Medi-Cal patients in 2001; and about 42% of urban (76% of rural) surgical specialists were accepting new Medi-Cal patients that year. 77 Notably, the estimates for surgical specialists included general surgeons, but sub-specialty providers, such as urologists, represent a much lower percentage of the total number of practicing surgeons. Unfortunately, this study did not distinguish between surgical specialists. 78 A 2003 survey published by the American Urological Association (AUA), found that approximately 55% of responding urologists in the Western region of the U.S. were accepting new Medicaid patients, but results specific to the state of California were not published in the report.79 To obtain better estimates of the percentage of California urologists who are currently accepting new FFS Medi-Cal patients, we obtained from the AUA Membership Directory phone numbers for 598 general urologists and urological oncologists practicing in California, and conducted our own informal telephone survey of these practices.80 We accepted responses from practitioners, office managers, and billing office personnel. Because patients with Medicare coverage are not eligible for IMPACT, we listed providers who accepted only joint Medicare/Medi-Cal patients as “not accepting,” and found that only 24% of the surveyed urologists were currently accepting new FFS Medi-Cal patients.81 Figure 2 shows the distribution of these providers relative to the IMPACT patient population.82

Alice Schnaidt, MA. Patient liaison at Health Education Council, telephone interview 3/22/06 Allison Diamant, M.D., Ph.D. UCLA Department of Internal Medicine, telephone interview 3/21/06. 77 Bindman, A., Yoon, J., Grumbach, K. and Streett, L. “Physician Participation in Medi-Cal, 2001,”Medi-Cal Policy Institute, May 2003: 29-30 Accessed 2/24/06 at www.chcf.org/documents/policy/MediCalPhysParticipation2001.pdf 78 Ibid. 32 79 AUA 10th Gallup Survey of Practicing Urologists, 2003, accessed 3/15/06 at www.auanet.org/practice/trends.cfm#characteristics 80 AUA Membership Directory, accessed 2/8/06 at http://www.urologyhealth.org/find_urologist/index.cfm?find=urologist [We obtained responses for 518 urologists, a response rate of 86.7%.] 81 This survey was neither random nor comprehensive, as not all practicing urologists in the state of California are members of the AUA. According to the 2002 American Medical Association (AMA) Physician Masterfile, which contains a comprehensive list of practicing U.S. physicians (including non-AMA members), approximately 935 urologists were practicing in the state of California in 2002. These 935 urologists included residents and fellows, as well as urological sub-specialist, such as pediatric urologists, endo-urologists, uro-gynecologists, and impotence and infertility specialists, who do not treat prostate cancer. Hence, we feel confident that our survey captured a significant majority of board certified urologists in California who provide definitive prostate cancer treatment. 2002 AMA Physician Masterfile data obtained from “California Physician Workforce: Supply and Demand through 2015,” Center for Health Workforce Studies. University at Albany, State University of New York, December 2004. Accessed at www.ucop.edu/healthaffairs/reports/Final%20Report%20-%20California%20Physician%20Workforce_12_20042.pdf 82 See Appendix B for maps of provider distribution in Los Angeles and San Francisco counties. 76

Figure 2: Distribution of California Urologists Accepting New FFS Medi-Cal Patients in 2006

While 70% of patients enrolled in the IMPACT program resided within a 10-mile radius of one of these providers (and 45% resided within a 5-mile radius), a distance of 10 miles still constitutes significant travel burden for many low-income patients. Furthermore, as noted in Option 2 above, these providers are not reimbursed adequately to cover the full cost of providing prostate cancer treatment. Caring for Medi-Cal patients is essentially a type of charity care from the perspective of these practitioners, which decreases the likelihood that this relatively small fraction of California urologists would be willing, or able, to absorb 70% of the low-income, uninsured patients seeking care from a Medi-Cal prostate cancer treatment program.

The Delaware Cancer Treatment Program The Delaware Cancer Treatment Program (DCTP), implemented in 2004, provides twelve months of cancer-related treatment, regardless of the type of cancer diagnosis, to qualified uninsured Delaware residents. 83 Although the program leverages the state Medicaid infrastructure, funds are paid directly to participating providers, who are reimbursed for services based on Medicare, not Medicaid, rates. 84 Similarly, a statewide prostate cancer program modeled after the DCTP would benefit from Medi-Cal’s lower administrative costs without producing significant provider attrition. Unfortunately, despite technical advantages over the BCCTP, a prostate cancer program modeled after the Delaware Cancer Treatment Program would face significant political challenges.

Barriers to a Prostate Cancer Program Modeled after the DCTP: the Role of Health Advocacy Groups Health advocacy groups play a critical role defining the cancer control agenda and implementing cancer control policy in the U.S.85 Among all such groups, the women’s health movement is particularly influential. Through well-funded, nationally-recognized organizations like the Susan G. Komen Breast Cancer Foundation, the women’s health movement has been highly successful at increasing public awareness and support for breast cancer research, diagnosis and treatment.86 The political and social influence of this movement is sufficient to impact even clinical practice patterns. For example, in January 1997, a National Institutes of Health (NIH) consensus panel, assembled at the request of the National Cancer Institute (NCI), concluded that routine screening mammograms for women 40-49 years of age was not beneficial. Women’s groups reacted vociferously, accusing the panel of “condemning women to death.” The NCI quickly reversed the panel’s decision, and in March 1997 formally recommended that screening mammography should be offered beginning at age 40.87 The strength of the women’s health movement stems, in part, from the movement’s roots and continued association with earlier struggles for women’s rights in the 19th and early 20th centuries, as well as the civil rights and women’s liberation movements of the 1960s and 70s.88 Yet, even with support from one of the strongest health advocacy movements in the U.S., and growing concern over provider attrition, the California BCCTP does not reimburse providers based on Medicare rates.

83 Delaware Cancer Treatment Program, Delaware Health and Social Services, Division of Public Health. Accessed 8/31/05 at www.dhss.delaware.gov/dhss/dph/dpc/catreatment.html [Specifically, to be eligible for program services, the applicant must be: a Delaware resident; have been diagnosed with cancer on or after July 1, 2004; have no comprehensive health insurance, and have household income < 650% of FPL.] 84 Kathleen Russell, Delaware Division of Public Health, telephone interview 1/20/06. See also “Turning Commitment into Action: Year Two Accomplishments,” Delaware Cancer Consortium, 2006. Accessed 5/2/06 at www.dhss.delaware.gov/dhss/dph/dpc/files/dcc_year2_rpt.pdf 85 Selig, W. “Examining Advocacy and Comprehensive Cancer Control,” Cancer Causes and Control, 2005; 16 (Suppl. 1): 61-68 86 Weisman, Carol. Women’s Health Care: Activist Traditions and Institutional Change. “The Women’s Health Megamovement,” in Women’s Health Care: Activist Traditions and Institutional Change. (Baltimore: Johns Hopkins University Press, 1998), 87-88, and Komen Milestones. Susan G. Komen Breast Cancer Foundation Accessed 3/3/06 at www.komen.org/intradoccgi/idc_cgi_isapi.dll?IdcService=SS_GET_PAGE&ssDocName=KomenMilestones 87 Schwartz, L. and Woloshin, S. “News Media Coverage of Screening Mammography for Women in their 40s and Tamoxifen for Primary Prevention of Breast Cancer,” JAMA, 2002; 287(23): 3136-3137, and Fletcher, S. “Whither Scientific Deliberation in Health Policy Recommendations? – Alice in the Wonderland of Breast-Cancer Screening,” NEJM, 1997; 1180-1183. 88 Weisman, Carol. Women’s Health Care: Activist Traditions and Institutional Change. “The Women’s Health Megamovement,” in Women’s Health Care: Activist Traditions and Institutional Change. (Baltimore: Johns Hopkins University Press, 1998), 46-73

Men do not have a long-standing history of discrimination or civil rights deprivation that can be used to inspire sympathy and strong collective action on behalf of men’s health issues.89 The social and political momentum that led to the rapid adoption of BCCTP by all 50 states, and the extension of at least partial benefits to undocumented women in California, is not present in the men’s health movement. The development of a statewide prostate cancer program that leverages Medi-Cal’s administrative infrastructure, but reimburses according to the Medicare fee schedule, would require an even greater policy shift. The loosely organized, poorly-funded and less wellknown advocacy groups for men’s health, (and particularly advocates for low-income, minority men, many of whom are undocumented workers), lack the political, social and financial capital needed to effectively advocate for such a policy change.90 California’s cancer control agenda prioritizes a reduction in cancer-related disparities, and will undoubtedly lead to the development of additional statewide cancer-specific programs.91 As the number of programs increase, so does competition for shrinking programmatic resources. Anticipating pressure from many competing cancer advocacy groups, state policy-makers would be very reluctant to enact a Medi-Cal expansion with Medicare reimbursement for any single cancer treatment program. Notably, this is not a problem for the Delaware Cancer Treatment Program because it is not a cancer-specific program. Patients diagnosed with any type of cancer, and who otherwise meet eligibility criteria, can be enrolled in the Delaware program.

Nathanson, Constance. “The Skeptics Guide to a Movement for Universal Health Insurance,” Journal of Health Politics, Policy and Law, 2003; 28(2-3): 456-458. 90 Ibid. 450-453, and Pinson, N. “The Breast and Cervical Cancer Treatment Program: Accepting Inequality for Undocumented Women?” Berkeley Women’s Law Review, 2002; 17: 122-136. 91 On February 23, 2006, California Assembly Member Mark Ridley-Thomas introduced AB 2339, which establishes a statewide Colorectal Cancer Screening and Treatment Program to provide screening, referral, diagnosis, treatment, outreach and education services for low-income, uninsured Californians at risk for colorectal cancer. The bill calls for DHS to award one or more contracts to private or public non-profit organization(s) to administer program services, but authorizes the program to use the Medi-Cal fiscal intermediary to enroll providers and pay claims. Provider reimbursement rates have not yet been determined. The bill has passed an assembly floor vote, and on 5/2/06 was referred to the Assembly Appropriations. Accessed 5/6/06 at www.leginfo.ca.gov/pub/bill/asm/ab_2301-2350/ab_2339_bill_20060502_amended_asm.pdf; also, Jim Knox, VP Legislative Advocacy, American Cancer Society, California Division, telephone interview 5/2/2006.

Option 4: No Statewide Prostate Cancer Treatment Program This option eliminates funding for a statewide prostate cancer treatment program. Low-income, uninsured men would be forced to seek prostate cancer care from the county health care safety net. We cannot know with certainty how many low-income, uninsured men with prostate cancer would be able to access timely care in this system, but one reasonable assumption is that access is greater in counties that operate large public hospitals. Figure 3 shows the distribution of county medical centers relative to IMPACT patients. About 50% of IMPACT patients resided within a 10-mile radius of these facilities, and only 25% within a 5-mile radius of these hospitals.

Figure 3: County-Owned Hospitals with Facilities for Primary Prostate Cancer Treatment

METHODS OF ANALYSIS Estimating Costs in our Model The cost-effectiveness models in this report conform to the guidelines published by the Panel on Cost-Effectiveness in Health and Medicine.92 The Panel recommended that costs be considered from the perspective of all relevant stakeholders (i.e. the societal perspective). These costs include the true resource costs (rather than actual payments) for treatment, fixed costs, and costs incurred by patients and their families related to time spent in treatment (e.g. lost wages). We obtained from IMPACT the monthly household income, treatment and billing records for patients who received IMPACT-covered services in FY 2004-2005, and used these data to estimate the resource cost of treatment for localized and metastatic prostate cancer. 93 As discussed previously, earlier research has shown that Medicare payments for prostate cancer treatment are good estimates of the true resource cost of these services.94 Because IMPACT reimbursed private providers according to the Medicare fee schedule, but public providers according to a set case rate, we included only treatment costs for private patients in the final calculation. Note, however, that we found no statistically significant difference between public and private providers in our calculation of first-year (i.e. the year of primary treatment) treatment costs.95 IMPACT often obtains low- or no-cost pharmaceuticals for their patients, so we could not use actual IMPACT expenditures to estimate the cost of hormone therapy for patients with biochemical failure. For the purposes of this cost-effectiveness analysis, we used estimates taken from the medical literature, but should point out that the IMPACT program itself derives significant cost savings from these low- or no-cost drugs.

Estimating Outcomes in our Model The “effect” of treatment is not simply life years gained, because the “quality” of life in any given year differs depending on an individual’s state of health. For this reason, the Panel recommended that health outcomes be measured in “quality-adjusted life years,” or QALYs, rather than total life expectancy. A QALY is calculated by multiplying the value (also called the utility weight) associated with a particular state of health, by the number of years spent in that condition. For example, perfect health has a utility weight equal to one; therefore, one year of perfect health is equivalent to 1 QALY. But if society assigns a utility weight of 0.89 to a health state with mild to moderate urinary incontinence, then one year spent in this health state is equivalent to 0.89 QALYs, and two years living in this health state is equivalent to 1.78 QALYs. We researched the medical literature to find utility weights associated with prostate cancer, and included in our model only utilities derived from the patient perspective, using either standard gamble or time trade-off techniques.96 92

Weinstein, M., et al. “Recommendations of the Panel on Cost-effectiveness in Health and Medicine,” JAMA, 1996; 276 (15): 1253-1258. [Panel recommendations were made to help standardize cost-effectiveness analyses and allow for better comparisons between cost-effectiveness studies.] 93 See Appendices C and D 94 Lave, J., et al. “Costing Medical Care: Using Medicare Administrative Data,” Medical Care, 1994; 32 (7): JS77-JS89, Supplement. 95 See Appendix C 96 See Appendix E for a brief description of standard gamble and time trade-off techniques

Reporting Cost-Effectiveness Results Cost-effectiveness analysis is a method for comparing the relative value of different strategies. The ratio of program cost to program effectiveness, called the average cost-effectiveness ratio (CER), does not help answer the question of how much more (or less) costly (or effective) one program is relative to another. For this reason, the Panel recommended that all cost-effectiveness studies report results in incremental cost-effectiveness ratios (ICER). The ICER gives a comparison of the cost-effectiveness of an alternative strategy relative to some baseline strategy. Cost alternative strategy – Cost baseline strategy ICER = -----------------------------------------------QALY alternative strategy – QALY baseline strategy

The ICER can be thought of as the added “price” of an additional QALY gained by switching from a baseline strategy to an alternative strategy. A strategy with an ICER, or price, deemed a good value by society is considered cost-effective. Many studies in health and medicine report the societal upper limit or willingness-to-pay threshold for an additional QALY as $50,000.97 However, this theoretical upper limit, established in 1982 and based solely on a study that estimated the cost-effectiveness of Medicare coverage of dialysis for kidney failure patients, has become increasingly controversial. Many researchers argue that this threshold should be higher, as the original threshold has never been adjusted for inflation.98 In contrast, some health care researchers have elicited even lower figures using standard gamble techniques to measure estimates of societal “willingness to pay.” 99 For simplicity and consistency with the current medical literature, we use a cut-off point of $50,000/QALY in this report, but caution that this figure is not rigidly adhered to in practice, and is a rather arbitrary guideline. Because dollars (and health outcomes) today are more valuable than future dollars (and future health outcomes), both costs and effects in this analysis were discounted back to present value using the standard discount rate of 3% recommended by the Panel on Cost-Effectiveness in Health and Medicine.100

97 Hirth, R., et al. “Willingness to pay for a quality-adjusted life year: in search of a standard.” Med Dec Making, 2000; 20: 332-342, and Neuman, P., et al. “Are pharmaceuticals cost-effective? A Review of the Evidence.” Health Affairs, 2000; 19: 92-109. 98 Ubel, P. “What is the Price of Life and Why Doesn’t it Increase at the Rate of Inflation?” Arch Intern Med, 2003; 163: 1637-1641. [Another estimate of the willingness to pay threshold for an additional life year is the “economic value of a statistical life year (VSLY). The EPA currently defines this threshold has $172,000 per life-year saved for persons under age 65. Source: Graham, John D. Memorandum to the President’s Management Council, May 30, 2003. Accessed 3/22/06 at www.whitehouse.gov/omb/inforeg/pmc_benefit_cost_memo.pdf 99 King, J., et al. “Willingness to Pay for a Quality-Adjusted Life Year: Implications for Societal Health Care Resource Allocation,” Med Decis Making, 2005; 25: pp 667-677. 100 Weinstein, M. et al. “Recommendations of the Panel on Cost-Effectiveness in Health and Medicine,” JAMA, 1996; 276 (15): 1253-1258.

Cost-Effectiveness Analysis Using Markov Modeling Techniques We used a decision analysis tool called a Markov model to transition patients from one state of health to another (with an annual transition probability based on the Gleason Score of their prostate cancer) and calculate all costs associated with prostate cancer treatment as well as the total number of QALYs accrued before the patients died.101 As illustrated by Figure 4 below, at the end of each cycle (year), patients may remain in the same state, or transition to another state. For example, patients with localized disease may be cured and remain well, or be cured for a time, then relapse and transition into “biochemical failure.” Some of these patients will then progress to metastatic disease despite all treatment efforts.

Figure 4: Schematic of Markov Process

Well

Localized

Biochemical Failure

Metastatic

Death (prostate cancer related or from other causes)

To calculate the cost-effectiveness of the four program options discussed above, we used this Markov modeling technique to transition a population of patients with characteristics similar to the average IMPACT patient in FY 2004-2005 from initial treatment to death in each of the four programs. We allowed the model to “cycle” through 39 stages (equivalent to 39 years), until greater than 97% of the entering patients were dead. The computer software used to construct the Markov model then calculated the (average) lifetime societal cost and quality-adjusted life years gained from implementing each of the four strategies.102

101 Sonnenberg F, Beck R. “Markov Models in Medical Decision Making: A Practical Guide,” Med Decis Making, 1993; 13:322-338 Rates of transition based on Gleason Score from: Bhatnagar, V., Stewart, S., Bonney, W., and Kaplan, R. “Treatment Options for Localized Prostate Cancer: Quality-Adjusted Life Years and the Effects of Lead-Time,” Urology, 2004; 63(1): pp 103-109. See also: Han, M., et al. “Biochemical (Prostate Specific Antigen) Recurrence Probability Following Prostatectomy for Clinically Localized Prostate Cancer,” Journal of Urology, 2003; 169: 517-523, and McAleer, S., et al. “PSA Outcome Following Radical Prostatectomy for Patients with Localized Prostate Cancer Stratified by Prostatectomy Findings and the Preoperative PSA Level,” Urologic Oncology, 2005; 23: 311-317 and Pound, C., et al. “Natural History of Progression After PSA Elevation Following Radical Prostatectomy,” JAMA, 1999; 281 (17): 1591-1597. 102 We used the decision analysis software TreeAge Pro 2005. [A complete description of our Markov model, including the costs, utilities, and transition probabilities used in the model, is included in Appendix E.]

Choosing an Optimal Statewide Prostate Cancer Program Cost-effectiveness is Necessary, but not Sufficient Cost-effectiveness analysis allows a direct comparison of the relative value of two or more strategies, but a strategy that is deemed cost-effective, or a good value for society, should not be confused with a cost-saving or cost-minimizing program. From a cost-effectiveness standpoint, the “preferred” strategy is simply the strategy that purchases more of a desired outcome for a relative price under some set threshold. It should not be surprising, then, to find that most costeffective strategies implemented in health care lead to an increase in total healthcare spending. Likewise, a strategy that “saves money” may not be cost-effective. Cost-effectiveness analysis is therefore a helpful instrument for informing decision-making, but does not provide all of the information needed for choosing between policy options. 103 Financial, technical and political constraints are often equally, if not more important considerations than a program’s costeffectiveness.

The Program must be Financially Feasible We expect the cost-effectiveness of IMPACT (Option 1 or 2) to be significantly affected by the amount of funds budgeted to the program each year. With a higher budget, IMPACT spends less on fixed costs, enrolls more patients, and allocates more funds to patient treatment costs. For this reason, Option 1 calls for re-appropriating IMPACT’s original first year budget of $10 million. However, we recognize that IMPACT’s budget has been decreasing steadily over the years, and that the program is currently budgeted only $3.2 million for fiscal 2006-2007. To see how this would affect our results, we completed an additional CEA under the $3.2 million budget constraint.

Programs should be Consistent with State Cancer Control Objectives SB 650 states that it is “the intent of the Legislature to ensure that the program has an adequate health care provider network to facilitate reasonable access to treatment.” Therefore, for both technical and legal reasons, the program must be able to attract a sufficient number of providers. Without an adequate provider network, a low-cost option with a favorable ICER only appears less costly because few patients are able to use the program. In this case, the “cheap” option may not be a good “value” for the dollars spent. Optimally, the statewide prostate cancer treatment program will address not only access, but a spectrum of cancer-related disparities, including quality of care and disease-specific treatment outcomes.

A Stable Program Requires Strong Advocacy and Political Support As discussed previously, a Medi-Cal prostate cancer program modeled after the Delaware Cancer Treatment Program would require a major policy shift, and hence very strong and sustained political support that does not exist in the men’s health movement. Certainly, the IMPACT program does have a base of political support and advocacy. Program advocates have “rescued” the program from funding elimination more than once over the past five years. 103

Neumann, P. “Why Don’t American’s Use Cost-Effectiveness Analysis?” Am J Manag Care, 2004; 10: 308-312.

However, the level of political support needed to implement a new program, or significantly increase funding to an existing program, is much greater than the support required to simply keep an existing program alive. We therefore include in our CEA the option of a Medi-Cal prostate cancer program modeled after the BCCTP, but not an option modeled after the DCTP.

Results Using actual patient records and billing data provided by IMPACT, we were able to calculate the average income of IMPACT patients, and estimate the cost of treatment for IMPACT patients in fiscal 2004-2005. Because IMPACT reimbursed according to Medicare rates at this time, and Medicare payments may be used to estimate the true resource costs of treatment, we have reliable estimates of the total resource costs associated with each of the program options examined here.104 However, only for the original IMPACT program do we know the percentage of patients who could achieve timely access to care in their local communities. For alternative options considered in this analysis, we made assumptions based on published studies and surveys, including our own informal survey of Medi-Cal accepting urologists in California. These studies indicate substantial barriers to accessing care in the county safety net and MediCal system. Based on these data, we estimated that between 35-50% of low-income, uninsured Californians seeking care for prostate cancer could achieve timely access to treatment in the county safety net. Likewise, we estimated that 50-70% of low-income, uninsured Californians seeking care for prostate cancer would achieve timely access to treatment in any system that reimbursed providers according to Medi-Cal FFS rates. We calculated cost-effectiveness results under two conditions. In the first, we used the upper bound of our estimate to create a “best-case scenario,” in which low-income, uninsured patients seeking treatment for prostate cancer could achieve timely access to care in 50% of cases in the county system, and 70% of the time in any program that reimbursed providers according to Medi-Cal FFS rates. Then, we calculated cost-effectiveness results for all program options in a “worst-case scenario,” using the lower bound estimates of 35% efficiency for the safety net and 50% efficiency for any program reimbursing at Medi-Cal rates.

104

See Appendix E

Cost-Effectiveness Results Assuming the Best-Case Scenario Table 3 shows the results of a cost-effectiveness analysis that compares each option for a statewide prostate cancer treatment program to the county safety net alone (i.e. the no program option). Table 3: CEA Assuming the “Best-Case” Scenario

Program Option

Cost/ Patient ($)

QALY/ Patient

Original IMPACT 65,343 8.68 $10 million Budget Original IMPACT 72,200 8.68 $3.2 million Budget Modified IMPACT (Medi-Cal rates) 59,429 8.11 $10 million Budget Modified IMPACT (Medi-Cal rates) 66,300 8.11 $3.2 million Budget Medi-Cal Prostate Cancer Program 38,800 8.11 (70% of men seeking care get access) NO PROGRAM 34,857 7.73 (50% of men seeking care get access) *All programs here are compared to NO PROGRAM option only

*ICER ($/QALY) 32,091 39,308 64,663 82,744 10,376 (baseline)

Compared to the county safety net alone, the original IMPACT program is a cost-effective option. With a budget of $3.2 million, IMPACT is able to enroll 100 new patients each year, in addition to re-enrolled patients, and allocates 30% of budgeted funds to fixed costs (13% to administrative and 17% to clinical fixed costs). Given an annual budget of $10 million, however, IMPACT is capable of enrolling between 350-400 new patients each year, in addition to reenrolled patients, depending on the case mix of patients seeking treatment from the program.105 With this higher budget, IMPACT would only need to devote 25% of budgeted funds to fixed expenses (clinical and administrative) provided that the case mix of patients enrolling is similar to that of patients who were enrolled in FY 2004-2005, and the greater proportion of funds applied to patient treatment costs produces a more favorable ICER for this program relative to IMPACT with a budget of only $3.2 million annually. The modified IMPACT program, which uses Medi-Cal rates to reimburse providers, yields unfavorable results. Assuming a willingness to pay threshold of $50,000, the program did not achieve cost-effectiveness, regardless of the amount of funds budgeted. Certainly, the $50,000/QALY cutoff used in this analysis is not absolute. Adjusting for inflation, this $50,000 threshold, established in 1982, would be about $95,000.106 Nevertheless, even if we used a cutoff of $95,000/QALY, this modified-fees program still would not emerge with a favorable ICER because it costs much more than the Medi-Cal prostate cancer program, but does not provide 105 The estimates used in this analysis are derived from the clinical case mix and costs for treatment of patients enrolled in the program from 2001-2005, which included 13% metastatic and 87% local/local-regional combined. Note also that our model assumes approximately 20-25% probability of exiting the program each year. The calculations above reflect the yearly costs once the program has reached a steady state. 106 Ubel, P. “What is the Price of Life and Why Doesn’t it Increase at the Rate of Inflation?” Arch Intern Med, 2003; 163: 1637-1641. [Costeffectiveness studies in the medical literature are increasingly citing willingness to pay thresholds of $50-100,000/QALY.]

any greater benefit. The unfavorable ICER associated with this option derives primarily from provider loss due to lower reimbursement. In a true Medi-Cal prostate cancer program, provider participation would also be relatively low, but low administrative costs partially offset reduced access to care. The Medi-Cal prostate cancer treatment program generates the most favorable ICER. If this program option is politically and technically feasible, then the cost-effectiveness of the original IMPACT program should also be compared directly with this option. Table 4 shows the results of this comparison. Table 4: Direct Comparison between Original IMPACT and Medi-Cal Prostate Cancer Program, Assuming the “Best-Case” Scenario

Program Option Original IMPACT $10 million Budget Original IMPACT $3.2 million Budget Medi-Cal Prostate Cancer Program (70% of men seeking care get access)

Cost/ Patient ($)

QALY/ Patient

ICER ($/QALY)

65,343

8.68

46,567

72,200

8.68

58,597

38,800

8.11

(baseline)

Compared to the Medi-Cal prostate cancer treatment program, and assuming that the absolute amount that society is willing to pay is $50,000/QALY, the original IMPACT program is costeffective only when the program has an annual budget of $10 million, and is able to allocate a smaller proportion of funds to fixed expenses.

Cost-Effectiveness Results Assuming the Worst-Case Scenario Table 5 shows the results of a cost-effectiveness analysis when only 35% of patients seeking prostate cancer care in the county safety net receive timely care, and 50% of such patients receive timely care in any program that reimburses providers according to Medi-Cal FFS rates. Table 5: CEA Assuming the “Worst-Case” Scenario

Program Option Original IMPACT $10 million Budget Original IMPACT $3.2 million Budget Modified IMPACT (Medi-Cal rates) $10 million Budget Modified IMPACT (Medi-Cal rates) $3.2 million Budget Medi-Cal Prostate Cancer Program (50% of men seeking care get access) NO PROGRAM (35% of men seeking care get access)

Cost/ Patient ($)

QALY/ Patient

ICER ($/QALY)

65,343

8.68

27,189

72,200

8.68

32,764

55,486

7.73

84,236

62,400

7.73

108,929

34,900

7.73

10,714

31,900

7.45

(baseline)

Compared to the county safety net alone, the added cost to society for an additional year of perfect health in these patients would be $32,820 when the original IMPACT program is budgeted at $3.2 million annually and $27,210 when original IMPACT is budgeted at $10 million annually. The option of a modified IMPACT program, which reimburses providers with Medi-Cal FFS rates, is above the willingness to pay threshold, and is eliminated from the next step in this analysis. The Medi-Cal prostate cancer treatment program again had the most favorable ICER. Relative to the county safety net alone, a Medi-Cal prostate cancer program would cost society, on average, an additional $10,714 to purchase one additional year of perfect health for these patients. With this highly favorable ICER, the Medi-Cal program again displaces the county and serves as the new baseline program for a subsequent comparison with the original IMPACT program. Table 6 shows the results of this comparison.

Table 6: Direct Comparison between Original IMPACT and Medi-Cal Prostate Cancer Program, Assuming the “Worst-Case” Scenario

Program Option Original IMPACT $10 million Budget Original IMPACT $3.2 million Budget Medi-Cal Prostate Cancer Program (50% of men seeking care get access)

Cost/ Patient ($)

QALY/ Patient

ICER ($/QALY)

65,343

8.68

32,045

72,200

8.68

39,263

34,900

7.73

(baseline)

Relative to a Medi-Cal prostate cancer program in which only 50% of patients seeking care could achieve timely access to treatment, the original IMPACT program remains a cost-effective option. Relative to the Medi-Cal option, the cost to society for one additional year of perfect health in this patient population ranges between $39,263 and $32,042, depending on whether IMPACT has an annual budget of $3.2 million or $10 million. This “price” for one additional quality-adjusted life year remains well below a threshold of $50,000/QALY.

Accounting for Unequal Treatment Outcomes between Programs So far in this analysis, we have distinguished between program alternatives only by each program’s ability to provide patients with timely access to treatment in their local communities. We have assumed that regardless of the program option, all patients who are able to obtain treatment have equal outcomes. Previously in this report, however, we identified studies that showed 22-40% worse prostate-cancer specific mortality among low-income patients treated for prostate cancer, despite receiving the same treatment as higher income patients. 107 For this reason, IMPACT was created to function as more than a health care payer, and provides enrollees with additional clinical and social services designed to elevate treatment outcomes to levels experienced by higher income patients. Because IMPACT has only been operating for five years, and some of the services initially offered by the program have been intermittently suspended or eliminated over the years, it is impossible to quantify with certainty the effect of these extra services. In general, however, we know that treatment adherence improves treatment outcome, and regular follow-up increases the likelihood of detecting and treating local-regional cancer recurrence before it progresses to widely metastatic disease. If, at the very least, the additional clinical and social services offered by IMPACT improve these two conditions, then it is not unreasonable to conclude that IMPACT patients might have lower prostate cancer-specific mortality than patients treated in programs that do not provide these services. To illustrate the potential value of these additional services, Table 7 shows cost-effectiveness results for the original IMPACT program (budgeted at $10 million) relative to a hypothetical Medi-Cal prostate cancer treatment program that does not offer these additional services. This analysis assumes treatment access rates consistent with the “worst-case scenario,” and that the Medi-Cal patients experience 10-22% worse prostate cancer-specific mortality than IMPACT patients. Table 7: CEA considering differential treatment outcomes between IMPACT and a Medi-Cal Prostate Cancer Treatment Program

Program Option

Cost/ Patient ($)

QALYs/ Patient

ICER

10% higher prostate cancer-specific mortality for patients in Medi-Cal Prostate Cancer Program Original IMPACT budgeted at 65,343 8.68 17,699 $10 million annually Medi-Cal Prostate Cancer Program 34,900 6.96 (baseline) 22% higher prostate cancer-specific mortality for patients in Medi-Cal Prostate Cancer Program Original IMPACT budgeted at 65,343 8.68 11,487 $10 million annually Medi-Cal Prostate Cancer Program 34,900 6.03 (baseline)

107 Du, X., et al. “Racial Disparity and Socioeconomic Status in Association with Survival in Older Men with Local/Regional Stage Prostate Carcinoma,” Cancer, 2006, 106 (6): 1276-1285, and Mandelblatt, J., Yarbroff, K. and Kerner, J. “Equitable Access to Cancer Services: A Review of Barriers to Quality Care,” Cancer, 1999; 86 (11): 2378-2381.

In this scenario, if the additional services offered through the IMPACT program succeed in reducing disparities in prostate cancer treatment outcome by even 10%, then the relative “price” of one more year of perfect health obtained by choosing the original IMPACT program (budgeted at $10 million) is only $17,699. This is approximately 50% lower than previously calculated, and highly cost-effective.108

108 Because the studies to which we refer here reported differences in actual life expectancy, we also repeated these calculations for cost/life-year gained. To do this, we changed all utility weights in the Markov model to “1,” and re-ran the model to calculate total life years (LY) rather than quality-adjusted life years. We obtained similar results of $16,193 and $9,949/life-year gained by choosing Original IMPACT over a Medi-Cal prostate cancer treatment program with no additional services targeting outcome disparities.

Discussion/Conclusions In the first part of this report, we showed that low-income, uninsured Californians with prostate cancer are generally much younger, with more advanced and aggressive forms of cancer, than the average man diagnosed with prostate cancer in the U.S. Because young, otherwise healthy men with moderate to high grade prostate cancers are at increased risk of cancer progression and death, current medical evidence strongly supports the benefit of offering these patients timely prostate cancer treatment. However, in the absence of a statewide prostate cancer program, these patients would confront substantial barriers to accessing prostate cancer treatment within the county “safety net.” Conclusion #1: Low-income, uninsured Californians with prostate cancer need treatment for their cancer, and cannot rely on the current county safety net to provide timely, local access to prostate cancer treatment. We also presented evidence of many factors beyond access to treatment that influence treatment outcome for low-income men with prostate cancer. For this reason, IMPACT was designed not only to provide treatment access, but also to help mitigate the negative effect on treatment outcomes associated with low-income, minority status, low levels of education and health literacy, and cultural and language barriers. The additional staff required to support these functions complicates the calculation of IMPACT’s “overhead,” and led to a significant overestimate of the program’s true administrative costs in fiscal 2004-2005. Although fixed costs in fiscal 2004-2005 were slightly greater than 30% of budgeted funds, true administrative functions consumed only 11% of budgeted funds in that year, or 2% less than the program is permitted under SB 650. The externally enforced enrollment suspension also inflated the ratio of program fixed to variable (treatment) costs, further complicating an analysis of IMPACT’s true administrative expenses in fiscal 2004-2005. Conclusion #2: IMPACT provides low-income, uninsured Californians access to prostate cancer-specific care in their local communities, as well as many “value added” clinical and social services. If these services are correctly differentiated from administrative costs, then IMPACT allocated only 11% of budgeted funds to administrative fixed costs in FY04-05. In the second part of this report, we compared the cost-effectiveness of four strategies for providing prostate cancer-specific care to low-income, uninsured Californians. The primary analysis compared options for a statewide prostate cancer program to the county safety net option. Using estimates from either the “best- or worse-case scenarios,” both the Original IMPACT program and a Medi-Cal prostate cancer program were cost-effective relative to the county safety net alone. However, the option of a modified IMPACT program, which reimburses according to Medi-Cal FFS rates, was not cost-effective. Conclusion #3: When compared to the county safety net, both the hypothetical Medi-Cal prostate cancer program and the original IMPACT program were cost-effective. The modified-fees version of IMPACT was not cost-effective.

The proposed Medi-Cal prostate cancer program and original IMPACT program are equally considered to be cost-effective, using a cutoff point of $50,000/QALY. In making our recommendation between these two programs, however, we must also consider the technical feasibility of each option. Extending limited Medi-Cal coverage to low-income, uninsured men with prostate cancer minimizes administrative expense and should, in theory, be the most costefficient option if access to care, quality of care, and treatment outcomes are identical for both IMPACT and a Medi-Cal prostate cancer program. At least two important factors indicate that this is not the case, however. First, provider accessibility in a Medi-Cal prostate cancer treatment program would likely be even lower than the estimates used in our calculations. Compared to general surgeons who treat breast cancer, urologists who treat prostate cancer are in relatively short supply, and the demand for urological services is high among Medicare patients and patients with private insurance. 109 With such a “favorable” balance of supply and demand, urologists have little incentive to participate in a program that does not reimburse them adequately for their services. Although we programmed our model with a variable representing the probability of accessing a local provider, the model assumes that providers who accept MediCal patients are never “saturated,” and will accept an indefinite number of Medi-Cal patients, so the probability of accessing care stays the same each year. In practice, however, both low provider participation and limited capacity for Medi-Cal patients in participating practices would diminish the benefit gained from low fixed costs. Although still anecdotal at this time, we have learned from researchers and women’s health activists that this saturation effect is even occurring with BCCTP, as increasing numbers of specialists—surgeons and radiation oncologists, in particular—close their practices to new BCCTP patients.110 Conclusion #4: The specialized needs of prostate cancer patients, and the relative shortage of specialty practitioners who treat prostate cancer and accept new Medi-Cal FFS patients, are significant technical challenges to implementing a Medi-Cal prostate cancer program. Second, clinical studies demonstrate that access to treatment alone does not yield equal treatment outcomes for low-income, uninsured men with prostate cancer. For this reason, California’s own cancer control plan explicitly calls not only for “access to quality cancer care,” but also for “no disparity in outcomes for all Californians.” The original IMPACT program is most consistent with both of these goals. IMPACT maintains an extensive provider network, facilitating local access to public and private providers throughout the state. In contrast to a Medi-Cal prostate cancer program modeled on the California BCCTP, IMPACT also provides additional clinical and non-clinical services targeting the extrinsic factors associated with disparities in treatment outcomes. Conclusion #5: IMPACT program is most consistent with California’s own Comprehensive Cancer Control objective to decrease cancer-related disparities in low-income, uninsured and minority men with prostate cancer. 109 2002 AMA Physician Masterfile data obtained from “California Physician Workforce: Supply and Demand through 2015,” Center for Health Workforce Studies. University at Albany, State University of New York, December 2004. Accessed at www.ucop.edu/healthaffairs/reports/Final%20Report%20-%20California%20Physician%20Workforce_12_20042.pdf 110 Alice Schnaidt, MA. Patient liaison at Health Education Council, telephone interview 3/22/06

On March 24, 2006, the Centers for Medicare and Medicaid Services (CMS) announced the selection of six sites participating in a four-year demonstration project to reduce cancer-related disparities among minority Medicare patients.111 Sites will provide assistance “navigating” the health care system and support services to help patients adhere to treatment regimens. Services may include interpreters, care coordination, transportation assistance, appointment reminders and assistance scheduling diagnostic and follow-up services. Properly funded and permitted to function as originally designed, IMPACT is also a demonstration project, initiated and funded at the state level, with goals and objectives mirroring those of the aforementioned CMS project. As such, IMPACT has a responsibility to verify, through rigorous data collection and longitudinal studies, the theoretical advantages of the multi-service approach used by the program to improve treatment outcomes. At the program level, these studies provide useful quality assurance data to IMPACT, assisting with improvements in program services. At the state level, these studies inform California’s own cancer control activities, helping to guide the development and implementation of additional statewide programs targeting cancer-related disparities.112 Finally, like the CMS demonstration project, IMPACT may contribute valuable information to national efforts to improve not only cancer care, but overall health care delivery, to low-income, minority and uninsured population groups in the U.S. Conclusion #6: Given adequate funding to support the program’s original design and mission, IMPACT is the equivalent of a statewide demonstration project, with the potential to generate valuable clinical and health policy data informing programmatic, state and national efforts to reduce cancer-related disparities.

111 “CMS Selects Sites for Demonstration Seeking Ways to Reduce Disparities in Cancer Health Care,” Medicare News Release, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, March 24, 2006. Accessed 3/27/06 at www.cms.hhs.gov/apps/media/press/release.asp?Counter=1816 112 See California AB 2339, introduced on February 23, 2006 by Assembly Member Mark Ridley-Thomas, establishing a statewide Colorectal Cancer Screening and Treatment Program to provide screening, referral, diagnosis, treatment, outreach and education services for low-income, uninsured Californians at risk for colorectal cancer.

Recommendations In order to provide reasonable access to quality, prostate cancer-specific care, and minimize cancer-related disparities for low-income, uninsured Californians with a diagnosis of prostate cancer, the State of California should: ♦ Establish stable and consistent funding for the IMPACT program. Budget cuts, enrollment suspensions, and threats to terminate program funding weaken IMPACT’s relationship with contracting providers, community referral organizations, and above all, program applicants and enrollees. In particular, enrollment suspensions create long wait-lists, exacerbating patients’ mistrust of the healthcare system and adding to the stress and frustration of patients, and their families, as they struggle to cope with a new diagnosis of cancer. ♦ Allow IMPACT to use a provider reimbursement scheme that will encourage a sufficient number of providers to continue contracting with the program. The justification for a stand-alone statewide prostate cancer treatment program is: (1) lowincome, uninsured Californians with prostate cancer are at high risk of complications and death from prostate cancer if they cannot gain access to timely, quality prostate cancer treatment, and (2) there are substantial barriers to accessing this care in both the county safety net and the Medi-Cal system due to the relative scarcity of specialty providers who will treat prostate cancer patients in these systems. If IMPACT cannot offer a sufficient incentive for providers to continue contracting with the program, then it, too, will be unable to meet the objective of providing low-income, uninsured men with timely access to prostate cancer treatment. ♦ Increase the amount of funds allocated to the IMPACT program to a level that will support the primary goals and objectives of the program. Consistent with California’s own cancer control objectives, the primary mission of the IMPACT program is (1) to provide low-income, uninsured Californians local access to quality prostate cancer treatment, and (2) to minimize the disparity in treatment outcomes experienced by lowincome men with prostate cancer. Although the program is still cost-effective with a relatively low budget of $3.2 million per year, we have shown that the cost-effectiveness of the program increases with increased program funding due to the smaller percentage of funds allocated to fixed costs. The current goal of the program is to enroll 400 new patients each year, and depending on the case mix of the patients applying to the program, we calculate that the program would be able to enroll between 350-400 new patients each year with a budget of $10 million annually. For some additional perspective on this budget recommendation, note that total spending on the California BCCTP in fiscal 2004-2005 was $77,843,000, with approximately 40% of funds provided by the state. 113 The BCCTP is a larger program than IMPACT, but allocates a significantly

113 Anonymous source, California BCCTP, e-mail communication received 3/22/06. [The actual match is 65:35, but these figures include the state contribution to the state only component of BCCTP.]

lower percent of budgeted funds to fixed costs, and is not designed to provide patients with the additional clinical and non-clinical social services provided by IMPACT staff.114 â&#x2122;Ś Support IMPACTâ&#x20AC;&#x2122;s data collection and analysis activities. As originally designed, the IMPACT program is equivalent to a statewide demonstration project seeking to reduce cancer-related disparities among low-income, uninsured men with prostate cancer. Knowledge gained from the IMPACT program has the potential to inform the development and implementation of additional cancer-control programs by the State of California, as well as national efforts to improve the effectiveness of cancer-related health care to low-income, minority and uninsured Americans. To achieve this goal, however, IMPACT must have funding and staffing to support adequate data collection and analysis.

114 The BCCTP successfully enrolls a variable case mix of approximately 200-250 new patients each month. Source: Diamant, Allison, M.D., Ph.D. UCLA Department of Internal Medicine, e-mail communication 3/21/06

Appendix A: IMPACT Fixed Costs in FY 2004-2005 Budget Category Administrative Fixed Cost Personnel/Salaries

Staff Positions 1 Program Director 1 Program Administrator 1 Program Specialist 1 Information Technology Mgr 1 Programmer Analyst II 1 S. CA Program Coordinator

Operating Expenses

Indirect Patient Care: Operating Expenses Direct Patient Care: Personnel/Salaries

Total Fixed Cost Total FY04/05 Budget % Admin Fixed Cost % Clinical Fixed Cost % Fixed Cost, Total

542,755

108,790

Clinical Fixed Cost Indirect Patient Care: Personnel/Salaries

Expense ($) 651,545

1,370,732 1 Contract Manager 1 Provider Manager 1 Clinical Assistant 1 Education and Outreach Coordinator 2 N. CA Outreach Coordinators 1 S. CA Outreach Coordinator 1 S. CA Eligibility Coordinator 1 N. CA Program Manager

204,353

233,701 1 Medical Director 1 S. CA Medical Director 1 Admin. Nurse III â&#x20AC;&#x201C; Nurse Supervisor 3 Nurse Case Managers 6 Clinical Coordinators 1 Medication and Lab Coordinator 1 Patient Education Manager

932,678

2,022,277 5,900,000 11% 23% 34%

With a $5.9 million budget, IMPACT is capable of enrolling 150-200 new patients each year. With a budget of $10 million, IMPACT can enroll between 350-400 new patients each year, but would require 2 more Nurse Case Managers and 4 more Clinical Coordinators to handle the additional patient load. At least one more FTE would also be needed to assist with administrative functions. This would increase the administrative budget to about $700,000 (7% of total budget) and clinical fixed costs to around $1,750,100 (17.5%). NB: These figures are based on the FY04/05 patient case mix, which can reasonably be expected to fluctuate from month to month or year to year. Higher acuity patients would require more clinical attention and generate higher costs.

Appendix B: Medi-Cal Provider Distribution by County

Appendix C: Estimate of Primary Treatment Costs for Patients with Localized Disease and Initial Treatment Covered by IMPACT

Dependent Variable: First Year Cost (Patients who Received IMPACT Coverage for Initial Treatment in Fiscal 2004-2005) Independent Variable Initial Treatment Prostatectomy Initial Treatment Radiation Therapy Initial Treatment Hormone Therapy Tracey Stage Local-regional Tracey Stage Metastatic Private Provider Intercept

Coefficient Beta 12298.62 11258.36 1879.36 2205.33 1964.73 928.91 (340.09)

Std. Error 1337.81 1368.74 1549.55 513.842 1205.47 504.87 1345.33

Sig. P-value .000 .000 .227 .000 .105 .067 .801

*The following are reference categories: Tracey Stage Local, Initial Treatment Watchful Waiting

F-Statistic 35.61 R2 .514 2 Adj. R .500 N = 209 Data Source: IMPACT Patient Database 35% of patients chose radiation therapy, and 65% prostatectomy for initial treatment of localized prostate cancer. Our estimate of the cost of treatment in the first year for localized prostate cancer is a weighted average of the cost for these two treatment modalities. Our estimate for treatment costs in the first year of treatment for Stage I/II prostate cancer is: 0.65($12,887.40) + 0.35($11,847.20) = $12,523.40

Appendix D: Estimate of Treatment Costs in Last Year of Life

Dependent Variable: Cost per Month by AJCC Stage Independent Variable AJCC Stage 2 AJCC Stage 3 AJCC Stage 4 AJCC Stage 4 X Severe Symptomatic Metastases Intercept

Coefficient Beta (152.13) (132.84) (169.94) 1617.27 685.79

Std. Error 73.36 120.02 103.78 194.94 41.02

Sig. P-value .039 .269 .102 .000 .000

*The following are reference categories: AJCC Stage 1

F-Statistic 20.72 R2 .196 Adj. R2 .186 N = 346 Data Source: IMPACT Patient Database

Patients with severe symptomatic metastases are generally in their last year of life. Some patients enter IMPACT with symptomatic metastases, while other progress to metastasis during their enrollment. Therefore the duration of this last year of life spent in the program was variable. To estimate the full cost of treatment for one year in this health state, we first calculated the average cost per month for patients with symptomatic metastases, then applied these costs over a twelve month period. The estimate we obtained is consistent with estimates found in the medical literature.115 Our estimate for the cost of treatment in the last year of life for patients with symptomatic, metastatic prostate cancer is:

12 X $2,133.12 = 25,597.40

115

Piper, N., et al. “Adenocarcinoma of the Prostate: an expensive way to die.” Prostate Cancer and Prostatic Diseases, 2000; 5: pp 164-166, and Penson, D., et al. “The Economic Burden of Metastatic and PSA Progression in Patients with Prostate Cancer: Findings from a Retrospective Analysis of Health Plan Data,” Journal of Urology, 2004; 171: pp 2250-2254.

Appendix E: Markov Model Inputs Cost Estimates State of Health Localized prostate cancer, Year of definitive treatment (prostatectomy or radiation therapy) Localized prostate cancer, Routine follow-up care Biochemical failure, Treated with hormone therapy Metastatic prostate cancer, Early Metastatic prostate cancer, Late, with severe symptoms Wage loss directly related to time in treatment116 Hospice117

Average Cost/Year $12,523 $1,143 $5,000 $6,200 $25,600 $330.5 $3,648

116

Estimate based on average of 2 weeks of lost work and average monthly income of $661.00. Median Hospice Expenditures for Prostate Cancer, source: â&#x20AC;&#x153;Medicare Hospice Benefit: Use and Expenditures, 1996 Cohort,â&#x20AC;? Table 7. Accessed 3/16/06 at http://aspe.os.dhhs.gov/daltcp/reports/96useexp.htm#table7 117

Appendix E (cont): Markov Model Inputs

Utility Weight Estimates State of Health Perfect Health Localized prostate cancer, untreated, No symptoms Localized prostate cancer, treated, No symptoms Localized prostate cancer, treated, Complicated by mild – mod erectile dysfunction Localized prostate cancer, treated, Complicated by urinary difficulty Localized prostate cancer, treated, Complicated by incontinence Biochemical failure, treated Hormone Therapy Biochemical failure, treated Orchiectomy Radical prostatectomy, Perioperative period Radiation therapy, During treatment period Metastatic prostate cancer, No symptoms Metastatic prostate cancer, Severe symptoms Dead

Technique

Utility Weight

-TTO118

1.00 0.91

TTO2

0.91

SG3, TTO2

0.89

SG3, TTO2

0.88

SG119

0.83

SG3

0.83

SG3

0.87

SG3

0.67

SG3

0.73

SG3

0.67

SG3

0.25

0.00

TTO = Time trade-off. Respondent is asked what amount of his lifetime he would be willing to give up in order to be relieved of a health problem (real or hypothetical). The utility is calculated as 1- proportion of life he is willing to sacrifice. SG=Standard Gamble. Respondent is asked to consider a hypothetical choice between the certainty of living in health state X for the remainder of his life and some hypothetical lottery in which he has some probability of living in a better health state with utility =1.0, but also some probability of ending up in a worse health state with utility =0.0. The probabilities for the “lottery” are altered until the respondent is indifferent between the alternatives. The expected utility of health state X is then calculated as equivalent to the probability level at which this occurs.

118 Albertsen, P., Nease, R., and Potosky, A. “Assessment of Patient Preferences among Men with Prostate Cancer,” J Urol, 1998; 159(1): pp 158-163. 119 Stewart, S., Lenert, L., Bhatnagar, V., and Kaplan, R. “Utilities for Prostate Cancer Health States in Men Aged 60 and Older,” 2005; 43(4): pp 347-355.

Appendix E (cont): Markov Model Inputs Annual State Transition Probabilities120 State

Gleason Score(s) 5-6

8-10

No lead time Lead time

Probability of Developing Metastasis, No Treatment 0.04 (0.02-0.09) 0.09 (0.04-0.10) 0.10 (0.09-0.20) 0.02 (5-year) 0.06 (4-year) 0.09 (3.5 year)

Post-RRP Post-XRT

Probability of Biochemical Failure Post-Treatment 0.05 (0.03-0.07) 0.07 (0.066-0.16) 0.16 (0.07-0.20) 0.05 (0.03-0.07) 0.08 (0.04-0.09) 0.10 (0.05-0.20)

Post-RRP Post-XRT

Probability of Metastases after Biochemical Failure 0.08 (0.06-0.17) 0.08 (0.06-0.17) 0.08 (0.06-0.17) 0.12 (0.06-0.17) 0.12 (0.06-0.17) 0.12 (0.06-0.17)

All

Annual Probability of Death after Metastases 0.23 (0.13-0.50) 0.23 (0.13-0.50) 0.23 (0.13-0.50)

Non-Prostate Cancer probability of dying by age, all-cause mortality, all males (as reported in U.S. National Vital Statistics Report Life Tables 2003) Mortality121

120 Bhatnagar, V., Stewart, S., Bonney, W., and Kaplan, R. â&#x20AC;&#x153;Treatment Options for Localized Prostate Cancer: Quality-Adjusted Life Years and the Effects of Lead-Time,â&#x20AC;? Urology, 2004; 63(1): pp 103-109. 121 National Vital Statistics Report, April 2006; 54 (14): 10-11. www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf

Appendix E (cont): Original IMPACT Arm of Markov Model (Gleason 7 sub-tree displayed)