Disparity in Site of Care Costs and Patient Burden

Moderator Scott Gottlieb, MD, asked the panel what they consider the consequences of moving the delivery of oncology care to the hospital setting.

John L. Fox, MD, MHA, believes that the most immediate effect of this consolidation has been the closure of rural clinics. While the Balance Budget Act may offer incentives to create clinics in the rural settings, he does not think they will receive facility payments or enhance payments; most hospitals will continue to have 340B pricing.

Ted Okon sees a certain irony in the situation. Forty years ago, he explained, cancer care was centered in a lot of big facilities, not in the rural settings, and many patients had to travel in order to obtain this care. And yet we have come full circle, in that there are large health system buildings being constructed off 340B profits as less profitable rural centers are being closed. The issue here is, that people think cancer patients will travel, will do anything, for care. But study after study has shown that this isn’t true, that patients cannot and will not travel for care, that they will only end up in the ER or a hospital once the disease has progressed.

Kavita Patel, MD, MS, offered another viewpoint on the field of oncology migrating to the hospital outpatient setting, looking at the resultant costs for patients. Patients may prefer to stay local, but will they still have those local options? Probably not, Dr. Patel said, and then the next question will be if individuals will be subject to some out-of-pocket costs because they might not have the hospital-based facility but rather something on the part B sensitivity.

“So when you talk to the larger institutions they’re very upset because they think that this conversation around ‘site neutrality’ takes everything to the lowest common denominator when they really do feel like they offer something that is truly different. My retort back to them is that you will have to demonstrate that you really offer something different…” she stated.

There’s also the ethnic and minority group perspective to consider, Dr. Patel added. These groups often perceive institution-based treatments as superior and that they can get all of their services delivered in one setting. We have to ask how these policies are affecting the rural settings.

Okon further developed Dr. Patel’s point, mentioning that hospitals cost more for Medicare for the private payer and for the patient. Looking at studies from the big respected national policy firms do show that hospitals have higher care; while oncologists prescribe care based on the margin, 340B hospitals offer drugs that cost 52% more because they prescribe more and costlier drugs. And Berkley Research Group and the Government Accountability Office have both confirmed this.