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November 26, 2014

Private cancer docs say they're getting forced out of business

Daily Briefing

    The number of independent cancer practices is dwindling as increasing operations and drug costs drive them to join hospitals or leave the business altogether, Gina Kolata writes for the New York Times.

    Data from the Community Oncology Alliance, an advocacy group for the nation's 1,447 independent oncology practices, show that, since 2008:

    • 544 independent practices were purchased by or entered into contractual relationships with hospitals;
    • 395 reported financial hardships at their institutions; and
    • 313 shut their doors.

    'The hospital was a refuge, not the culprit'

    A key reason why independent practices are partnering with larger entities is to take advantage of the difference in reimbursements for hospitals and private practices.

    Specifically, patients and their insurers pay hospitals and affiliated physicians about two times more than they pay independent oncologists for identical cancer treatments. Moreover, many hospitals and health systems are eligible to participate in a federal program through which they can purchase cancer drugs for about 50% less than what private practice oncologists must pay.

    In addition, private doctors must stock their own drugs and maintain mini-pharmacies. If a patient gets too sick to continue treatment or if he or she dies, the physician takes the loss, a loss that has become less manageable with increase in cancer drug costs and decreases in reimbursement rates for doctors.

    Meanwhile, changes brought by the Affordable Care Act—including new documentation requirements and waves of consolidation—may also be straining private practices.

    Does limiting access to top cancer centers undermine the ACA?

    Jeffery Ward, an oncologist in Seattle who sold his practice to Swedish Medical Center, says that the only way to keep his practice running was for him and his colleagues to work for free. "The hospital was a refuge, not the culprit," he says.

    What's better: Cancer care in a hospital or private practice?

    Private practice oncologists argue that the care offered at hospitals is less efficient and less personalized. Richard Schilsky, CMO at the American Society of Clinical Oncology, touts independent practices, saying, "Run on time, they are efficient, you get in, you get out, as opposed to academic medical centers where they may be an hour and a half behind."

    But the American Hospital Association (AHA) says there are many advantages for patients receiving care at hospitals, including the ability to undergo CT and MRI scans, use the pharmacy, and receive lab tests all in one place. Erik Rasmussen, AHA's VP of legislative affairs, says that brining all cancer care under one umbrella reduces "the hassle factor."

    Rasmussen also notes that the reason hospitals receive higher fees for their services is because they stay open 24 hours a day and provide care to individuals who lack health insurance and those who are underinsured.

    The cancer drug that costs $143,000

    The new reality for cancer practices: 'We have to treat people differently'

    Not all oncologists are jumping ship from the private practice model.  Some oncologists have chosen to continue operating independent practices, but many of those doctors now are turning away uninsured or Medicaid patients.

    Barry Brooks, a Dallas oncologist who works at a private practice, says, "We hate doing it, I can't tell you how much we hate doing it, [b]ut I tell them, 'It will cost me $200 to give you this medication in my office, so I am going to ask you to go to the hospital as an outpatient for infusions.'"

    Peter Eisenberg, a private practice oncologist in Northern California, seconded Brooks' sentiment, saying, "The disgrace is that we have to treat people differently depending on how much money they've got," adding, "That we do diminishes me" (Kolata, New York Times, 11/23).

    How Coverage Expansion Will Impact Cancer Programs and Patients

    The coverage expansion provisions of the Affordable Care Act are designed to reduce the number of uninsured patients, and at the same time, ensure that all insured individuals have robust health benefits.

    Join us for a briefing on how the Medicaid expansion, health insurance exchanges, and new health plan requirements will impact cancer patients, and subsequently their health care providers.


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