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Report: ‘Misguided public policies’ fueled shift of cancer care into more expensive hospital setting
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The Community Oncology Alliance’s 2018 Community Oncology Practice Impact Report details a decade’s worth of closures and consolidations in the U.S. cancer care system.
This trend has led to a dramatic shift in cancer care from community practices to the more expensive hospital setting, the report’s authors contend.
“No one can look at the [trends outlined in the report] and say that there has not been a clear and negative dismantling of our cancer care system over the last decade,” Ted Okon, executive director of Community Oncology Alliance (COA), said in a press release. “This situation is the direct result of the misguided 340B and sequester cut allowed to take place by our elected officials in Washington. The pressures of these misguided public policies have been a one-two punch, pushing and pulling community oncology practices to close, consolidate or be acquired by hospitals, all at the expense of patients.”
In the past decade, 1,653 community oncology clinics or practices have closed, been acquired by hospitals, undergone corporate mergers or reported they were struggling financially, according to the COA report. The rate of closures has not changed since 2016, and nearly 14 practices per month have been affected by closings, hospital acquisitions and corporate mergers since 2008.
HemOnc Today spoke with Okon about the report’s findings and their implications for patients and the health care system with regard to access to care, quality of care and cost of care.
Question: What are the key takeaways of the report?
Answer: What is striking about the latest report is the fact that we still see so many clinics closing. I was also particularly struck by the fact that a number of these clinic closings seem to be associated with oncologists that are retiring for one reason or another; however, I suspect that some of the clinic closings are also associated with practices that have merged into the hospital setting. These smaller clinics — which typically are in rural areas — break even at best and, in most cases, operate at a loss. Not only do hospitals not want to operate businesses that are at a loss, but more of these hospitals — especially 340B hospitals — are building these large, elegant centralized buildings and are centralizing their cancer care there. It does not make much sense to operate some of these outpost clinics.
Q: What key data does the report provide about practice closures and mergers/acquisitions?
A: The two largest components of what we see are practices that have been merged/bought out by a hospital or in some way affiliated with a professional services agreement with the hospital. When the report discusses practices, those are practices that are typically multiple-clinic locations that merge into the hospital, whereas clinic closings are individual clinic sites. It is important to understand that the practices that are bought out by hospitals are bought out by the 340B hospitals because there are tremendous profits to be realized with 340B discounts on expensive cancer drugs.
Q: Can you provide insights into the implications of the report for patients and the health care system in terms of access to care, quality of care and cost of care?
A: There are two big issues that are quite concerning. The first is that there are access problems for patients. When rural clinics are closed, this creates an access problem. It is believed by some that people with cancer will travel to the moon and back again to receive treatment, but the data show this is not true. When patients have to travel — particularly when they are not as mobile or they do not have transportation — they do not travel.
There is a real cost issue there. Many studies have shown that, when cancer care moves into the hospital setting, it is more expensive. We see situations in which a practice merges into a hospital and patients who are in midcycle of their treatment go from being treated in the same location and being seen by the same physician and receiving the same drugs but, depending on their insurance, they can start paying twice as much if not more for identical care. There is an access-to-care issue and there is a cost issue. When all care is shifted to the hospital, it significantly increases cost for patients as well for the insurer. When the insurer is Medicare, this means we all pay increased costs as taxpayers.
Q: Can you elaborate on the “misguided public policies” you identified as major contributors to this trend?
A: There are two misguided policies. One creates a scenario of pushing practices into a hospital setting, and this is the blunt act of the sequester cut. Sequester is a blunt act instrument that is a very destructive policy. Specifically, the prior and current administration should not be applying sequester to Part B drug reimbursement because they have effectively changed what is set into law in the Medicare Modernization Act of 2003. It is illegal and unconstitutional and is pushing clinics into the hospital setting, and the pull from the hospital side is 340B. The current administration has made some changes to the 340B program, taking half of the incentive away, but 340B hospitals are still making upward of 30% discounts on these cancer drugs. Sequester and 340B are misguided policies that are fueling the consolidation of cancer care into the more expensive hospital setting.
Q: Can you offer insights into what COA is doing to curb this trend and support the community practices that are still open and remain independent?
A: In general, we do a lot of work with practices by networking them together. We have all of the practice administrators on a listserve of a closed network. We routinely share information and have regular phone calls, webinars and a meeting around our annual conference. We do our best to navigate these community practices around what can be quite a rough environment. The other thing we are doing is working on a universal oncology payment reform. On Capitol Hill, we have been advocating that sequester cut needs to be stopped. We are frankly at the point of now being pushed to resort to legal action to try to get the government to stop the sequester cut. – by Jennifer Southall
Reference:
Community Oncology Alliance. 2018 Community Oncology Alliance Practice Impact Report. Available at: https://www.communityoncology.org/downloads/pir/COA-Practice-Impact-Report-2018-FINAL.pdf. Accessed on June 27, 2018.
For more information:
Ted Okon can be reached at Community Oncology Alliance, 1634 I St. NW, Suite 1200, Washington, DC 20006.
Disclosure: Okon reports no relevant financial disclosures.