COA Report Accentuates Economic Strain on Community Practices

The situation is bleak—community clinics are struggling under the growing burden of healthcare costs, reduced margins, and hospital takeovers. According to the 2016 Community Oncology Practice Impact Report, commissioned by the Community Oncology Alliance (COA), about 15 community practices in the United States have either closed or were acquired, each month since 2008, and closures and consolidation continue.

According to the report, during the period between January 2008 and September 2016, 380 clinics have shut their doors and 390 practices continue to struggle financially. Further, more than 600 multi clinic practices have been acquired by hospitals and nearly 160 practices have merged or have been acquired by a corporate entity during the period. The highest number of closures, according to the report, have been in the states of Florida, Texas, and Michigan, while clinics in Michigan, New York, and California continue to struggle.

“Treatment advances like oral drugs and immunotherapy, have the potential to save lives. That will not matter if patients can no longer afford care or if care simply disappears from their community,” said Bruce J. Gould, MD, president and medical director of Northwest Georgia Oncology Centers and president of COA.

Beyond the clinics, patients will shoulder a significant burden of these closures and mergers, facing issues with access and cost of care. Reimbursement rates are vastly different between a physician’s office and a hospital outpatient department (HOPD), which might be the motivation behind the hospital acquisitions, according to the report. A study published earlier this year in The American Journal of Managed Care found that prices at a HOPD were much higher than the prices for the same services received at a physician’s office—it ranged from 21% higher charges for an office visit to 258% higher charges for a chest radiography, the authors found.

According to the COA, which has commissioned the current report, patients pay over 50% more for hospital-based care compared with the same care received in a physician’s office, the burden of which is often distributed between the patient and Medicare. An earlier report from COA estimated that the shift in chemotherapy administration site for its enrollees from a clinic to a hospital setting cost Medicaid a whopping $2 billion.

“We are witnessing the dismantling of the best cancer delivery system in the world when the Cancer Moonshot calls for the exact opposite,” said Ted Okon, MBA, executive director of COA. “Policymakers should be alarmed at the real world impact DC has had on community oncology, and particularly think twice about the proposed CMS Part B experiment on cancer care. This must stop before it is too late. As the Baby Boomers age and the number of survivors increases every year, lives depend on a strong community cancer care system,” he added.