Less Access, Higher Costs, Worse Care?
Many studies have demonstrated that, when hospitals become behemoths in a given market, healthcare costs go up.
“There are robust data showing that consolidation increases healthcare costs by reducing competition, including in oncology,” wrote Dr. Erfani and colleagues.
Oncology practices that are owned by hospitals bill facility fees for outpatient chemotherapy treatment, adding another layer of cost, the researchers explained, citing a 2019 Health Economics study.
Another analysis, published in 2020, found that hospital prices for the top 37 infused cancer drugs averaged 86% more per unit than the price charged by physician offices. Hospital outpatient departments charged even more, on average, for drugs — 128% more for nivolumab and 428% more for fluorouracil, for instance.
In their 2024 analysis, Dr. Erfani and colleagues also found that increased hospital market concentration was associated with worse quality of care, across all assessed patient satisfaction measures, and may result in worse access to care as well.
Overall, these consolidation “trends have important implications for cancer care cost, quality, and access,” the authors concluded.
Navigating the Consolidation Trend
In the face of mounting pressure to join hospitals, community oncology practices have typically relied on horizontal mergers to maintain their independence. An increasing number of practices, however, are now turning to another strategy: Management services organizations.
According to some oncologists, a core benefit of joining a management services organization is their community practices can maintain autonomy, hold on to referrals, and benefit from access to a wider network of peers and recently approved treatments such as chimeric antigen receptor T-cell therapies.
In these arrangements, the management company also provides business assistance to practices, including help with billing and collection, payer negotiations, supply chain issues, and credentialing, as well as recruiting, hiring, and marketing.
These management organizations, which include American Oncology Network, Integrated Oncology Network, OneOncology, and Verdi Oncology, are, however, backed by private equity. According to a 2022 report, private equity–backed management organizations have ramped up arrangements with community oncology practices over the past few years — a trend that has concerned some experts.
The authors of a recent analysis in JAMA Internal Medicine explained that, although private equity involvement in physician practices may enable operational efficiencies, “critics point to potential conflicts of interest” and highlight concerns that patients “may face additional barriers to both accessibility and affordability of care.”
The difference, according to some oncologists, is their practices are not owned by the management services organization; instead, the practices enter contracts that outline the boundaries of the relationship and stipulate fees to the management organizations.
In 2020, Dr. Chasky’s practice, Alliance Cancer Specialists, joined The US Oncology Network, a management services organization wholly owned by McKesson. The organization provides the practice with capital and other resources, as well as access to the Sarah Cannon Research Institute, so patients can participate in clinical trials.
“We totally function as an independent practice,” said Dr. Chasky. “We make our own management decisions,” he said. For instance, if Alliance wants to hire a new clinician, US Oncology helps with the recruitment. “But at the end of the day, it’s our practice,” he said.
Davey Daniel, MD — whose community practice joined the management services organization OneOncology — has seen the benefits of being part of a larger network. For instance, bispecific therapies for leukemias, lymphomas, and multiple myeloma are typically administered at academic centers because of the risk for cytokine release syndrome.
However, physician leaders in the OneOncology network “came up with a playbook on how to do it safely” in the community setting, said Dr. Daniel. “It meant that we were adopting FDA newly approved therapies in a very short course.”
Being able to draw from a wider pool of expertise has had other advantages. Dr. Daniel can lean on pathologists and research scientists in the network for advice on targeted therapy use. “We’re actually bringing precision medicine expertise to the community,” Dr. Daniel said.
Dr. Chasky and Dr. Eagle, whose practice is also part of OneOncology, said that continuing to work in the community setting has allowed them greater flexibility.
Dr. Eagle explained that New York Cancer & Blood Specialists tries to offer patients an appointment within 2 days of a referral, and it allows walk-in visits.
Dr. Chasky leans into the flexibility by having staff stay late, when needed, to ensure that all patients are seen. “We’re there for our patients at all hours,” Dr. Chasky said, adding that often “you don’t have that flexibility when you work for a big hospital system.”
The bottom line is community oncology can still thrive, said Nick Ferreyros, managing director of COA, “as long as we have a healthy competitive ecosystem where [we] are valued and seen as an important part of our cancer care system.”
A version of this article first appeared on Medscape.com.