Bruce Feinberg, DO: We’re going to change gears. We’re going to get into more of a focus around oncology care. A lot has been said about oncology care with IDNs. In particular, as a result of 340B—I shouldn’t say it’s a result of purely 340B but 340B and other market drivers—there has been a significant shift in the site of care for cancer patients, where 80% of it 5 to 10 years ago was being provided in the community setting in private practice clinics, now it’s half that number today. The half that’s not there is being treated at a site of care, usually in a facility owned by an IDN, however we define it.
There have been a lot of challenges too. Is that improving quality? If it is, is it also increasing cost? If it’s improving quality and increasing cost, what’s been gained in that transition? Understanding the role and opportunity of IDNs in cancer care, the experience thus far would be the place for us to start to level-set. Why don’t you take it away?
Mark S. Soberman, MD, MBA, FACS: I’m going to say something a little heretical, perhaps, as someone who works for a health system, but I am a big believer in site neutrality. I actually think it is unreasonable to pay hospital outpatient departments more for the services that they provide than a physician’s office. I think the value of the service is the value of the service.
Our health system actually happened to make the decision to move our cancer center to a site where we now operate on the physician fee schedule because we thought in a value-based world, we want to be less expensive, not more expensive. I’ll also tell you that The US Oncology Network is doing some interesting things and trying to diversify. They’re trying to have more multispecialty-type practices and networks. I think that’s where IDNs have an opportunity in terms of improving outcomes and coordination of care.
If we’re heading to bundles, if you don’t have all your specialists and all your facilities lined up in some coordinated way where you can monitor costs, measure outcomes, and coordinate care, you’re not going to be able to participate. I think the OCM [Oncology Care Model] is just the tip of the iceberg because it isolates medical oncology, yet at the same time, it makes the medical oncologist responsible for a whole lot of things they have no control over. Obviously, there’s some flaw in the model, to say the least. Now, an IDN doesn’t have to necessarily mean employment too. There are a lot of different ways to integrate care. There are a lot of different relationships one can enter into. But I certainly think in cancer care, it’s where we have to go. I think that the reimbursement models are going to push us there one way or the other.
Bruce Feinberg, DO: I’d say that’s very aspirational, but it doesn’t necessarily match with reality today. What is your experience in where we are for the last 5 years of this experiment with the migration of community oncology into an IDN, often with the exact same site of service performing the exact same care at a much higher cost?
Michael Kolodziej, MD: I’ve already said I hate hospitals, so we can just start with that.
Dana Macher: That’s the payer perspective.
Michael Kolodziej, MD: No, actually that was long before I was a payer. I think if you talk to most oncologists who practice in the community…
Bruce Feinberg, DO: Should I say that the opinions of Mike regarding hospitals are Mike’s alone and not representative of ADVI?
Michael Kolodziej, MD: You can say that if you like.
Bruce Feinberg, DO: You always used to give those preemptive statements.
Michael Kolodziej, MD: I know. I think this is the issue. Coming from the perspective of a community oncologist who has witnessed the migration that you’ve pointed out over the past decade, I think there’s a certain chip on the shoulder of most community oncologists regarding the unfairness of the current payment model, which is modestly unfair for government payers and profoundly unfair for commercial payers. There is fear that a lot of the proposed changes in oncology reimbursement that are on the table right now, under the current administration, could further make it difficult for community providers to maintain their independence.
I think independence is a very important thing for a lot of community oncologists. I think the idea that they would, for a hospital, have to answer to some hospital administrator is just unfathomable. But the fact is that in the evolution of payment models toward responsibility for total cost of care, the pride associated with being independent becomes almost unsustainable. I know of no community oncology practices, even Texas Oncology, that are in a position to negotiate a day rate for a bed with a hospital. They just don’t; they’ve never been forced to do that. They have no idea where to start. And so I think it is inevitable that there has to be some relationship between IDNs, or hospital-based providers, and community oncologists because the community oncologist will not be able to survive without a relationship.
Now, that’s not going to be an employment relationship. In fact, we’ll see what happens. We may have reached the peak of hospital employment of oncologists. When they shift from being a revenue center to a cost center, those meetings with the hospital administrator will take a whole different tone, a whole different dialogue.
Dana Macher: Yes, just with the changes in 340B payment. I think that we will certainly see the stim in acquisitions. You might even see that backward.
Bruce Feinberg, DO: My concern would be that with regard to the 340B issue, how dependent have the hospitals become?
Dana Macher: Very.
Bruce Feinberg, DO: Do they have an unbalanced balance sheet now because of that dependence? And how quickly can they recover?
Mark S. Soberman, MD, MBA, FACS: Well, I come from a non-340B health system. We’re not 340B, and we’ve been able to successfully develop and grow a program. To your point, Mike, I don’t know, as infusion becomes less lucrative, whether there will be a shift back to private practice. The other wild card in all of this is the fact that when you look at the trainees coming out, the millennials, many of them are not as entrepreneurial as we were when we came out of residency. A lot of them are not looking to go into private practice. They like the idea of working for an integrated delivery network or a health system.