Study: Rise in Oncologists Working for Hospitals Spurs Higher Chemo Costs

Increases partly fueled by facility fees

Chances are that outpatient chemotherapy treatment costs are higher if a patient’s oncologist works for a health care system than if the physician has his or her own practice, according to a study by researchers at the University of Chicago. The team analyzed private health-insurance claims data from the Health Care Cost Institute, a nonprofit research organization, and national data on consolidations among doctors and hospitals between 2008 and 2013.

The researchers found significant consolidation between outpatient oncology practices and health care systems in the decade leading up to 2013, and linked that to a rise in spending on drug-based cancer care. Each 1% increase in the proportion of medical providers who were affiliated with a hospital or health system was associated with a 34% increase in the annual average spending per person on outpatient cancer drug treatments, the investigators reported.

Part of the rise was fueled by the facility fees that hospitals and their outpatient clinics routinely tack onto bills, the researchers said.

“Provider consolidation must be changing the ability of providers in a market to extract higher prices [from insurers] for outpatient cancer therapy,” said lead author Dr. Rena Conti, an assistant professor at the University of Chicago. The study controlled for the volume of patients and the mix of cancers, among other things, she noted.

Spending on chemotherapy drugs has been in the news lately as some cancer specialists and patient advocacy groups have objected to a proposal by Medicare to change how it pays for medications that are covered under Part B, the program’s outpatient benefit.

The new study suggests that it might be more cost-effective for patients to undergo chemotherapy treatments at a community-based practice rather than at a hospital or hospital-affiliated clinic, Conti said.

“Patients are increasingly shifting toward high-deductible health plans, and that suggests they’re paying a higher percentage of the costs for these therapies as the prices are going up,” she said.

Sources: Kaiser Health News; April 15, 2016; and Issue Brief; February 2016.