Enabling Healthy Decisions

Cancer costs are expected to reach $174B in the US by 2020.  Right now, it’s about 10-11% of total healthcare spend which makes it a big area of focus within the healthcare industry.

The question is how to manage this spend:

• Is it about site-of-care and where the care is provided?  (community oncology; Centers of Excellence; outpatient clinics; inpatient)
• Is it about specialty drugs and how they are managed and charged?  (Buy-and-bill; white-bagging; brown-bagging; on-site pharmacy; 340B)
• Is it about evidence-based care and following NCCN guidelines or clinical pathways?
• Is it about palliative care and managing spend in the last 3-6 months of life?
• Is it about personalized medicine?

One of the challenges is the survival of the community oncology practice (see ASCO report) that is an issue that physicians have struggled with in other specialties.  Over the past few years, we’ve seen continued consolidation of practices with many of them being acquired by hospitals and hospital systems.

In some cases, oncologists have seen a reduction in their income tied to a reduction in buy-and-bill and are looking to be employed in order to continue to maintain their incomes.  They are one of the few medical professions that have seen a reduction in income recently.  At the same time, this trend is also driven by hospitals taking advantage of the 340B pricing which allows them to generate approximately $1M in profit for every oncologist they employ.  And, the complexity of oncology treatment also is prompting the need for a more comprehensive care model which requires a broad set of services which is sometimes difficult for a small practice to provide.

Of course, this shift in care from community oncology to hospitals is driving up costs without a demonstrated improvement in outcomes.  This is driving a lot of payer focus and driving discussions of payment reform whether that’s in the form of ACOs, PCMHs, or bundled payments.  United Healthcare recently released some data from one of their pilots.

This seems like another classic example of misalignment across the industry.  Hospitals clearly see an opportunity to buy up more oncology practices while payers and others are going to push for reform around 340B and payment differences.  Oncologists are struggling to continue providing care but replace the income they were making of buy-and-bill of specialty medications.

I’ve talked to a lot of people about this struggle.  It doesn’t seem clear whether community oncologists are destined for extinction or will payers will find a way to enable them to survive.  The other question is how things like teleoncology, tumor boards, big data, and the focus on prevention and survivorship will ultimately change the care delivery approach to oncology which may impact the role of the community oncologist in the future.