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When business and health care intersect, doctors are faced with troubling and seemingly impossible situations. While our primary focus is always the patient, and delivering the best available care for that patient, flawed health care policies that go against what we want for our patients — and for our health care system — are making our job increasingly difficult.
Nowhere is this conundrum playing out more alarmingly than in the cancer care community. I recently had the opportunity to testify before the House Energy & Commerce Committee’s Subcommittee on Health to offer my perspective on how existing Medicare policies are discouraging patient choice in cancer care while increasing health care spending. Further, I expressed support for the Medicare Patient Access to Cancer Treatment Act, a policy solution that would protect community-based cancer care for America’s cancer patients.
Corrective legislation recognizing the value of community-based cancer is warranted given that just nine years ago, nearly 90 percent of all Americans with cancer were treated in community-based cancer centers, demonstrating a strong patient preference for local access to cancer treatment. These centers, located in large cities and small towns, allowed patients convenient, comfortable and cost-effective care while fighting cancer, and have also been drivers of much of the research and progress made in the war on cancer. But the landscape for cancer care has dramatically changed.
But today, less than 65 percent of patients are receiving care in community cancer centers because the economics of cancer care have resulted in a rapid shift toward more expensive hospital outpatient departments (HOPDs). Between 2005 and 2011, there was a 150 percent increase in chemotherapy administered in the hospital outpatient setting compared to community cancer clinics. While hospitals reaped more than triple their previous reimbursement amounts (from $90 million to $300 million), freestanding cancer centers have been forced to either consolidate or sell their community oncology clinics to hospitals, or even worse, close their doors forever.
Because of flawed Medicare reimbursement policies, committed oncologists have been faced with the unimaginable choice between exiting the field of oncology or accepting employment or other arrangements in hospital-based programs.
The shift to hospital outpatient cancer treatment has effectively reduced patient access and increased costs to the Medicare program, taxpayers and patients. A Milliman study finds that the cost of treating cancer patients is significantly lower for both Medicare patients and the Medicare program when performed in community clinics as compared to the same treatment in the hospital setting. The study shows HOPD-based chemotherapy costs Medicare $6,500 more per beneficiary (more than $623 million) and seniors $650 more in out-of-pocket spending per patient annually.
Broken down another way, consider a recent IMS Institute for Healthcare Informatics study showing significantly increased costs to the patient under the current policies. The IMS report calculated that for commonly used cancer drugs, the average increased cost to the patient is $134 per dose if received in a hospital outpatient setting rather than in an oncologist’s office. Alarmingly, the report also mentions that patients who face higher out-of-pocket costs are more likely to drop out of treatment citing a study showing that a bump of as little as $30 in co-pays caused some breast cancer patients to skip or drop care all together.