Oncologists Thinking About Changing Practice Models

The majority of cancer patients will be treated outside of private community practices by 2016, according to a study by the Inside Oncology consulting firm. The same report noted that five years ago the split was generally seen as 80% community versus 20% hospital-based care. Today the firm estimates that ratio has changed to 50-50.

“Current trends certainly have not favored the smaller office model,” said David Eagle, MD, president of the Community Oncology Alliance. “If you think the trends are going to continue, you have to look at all of your options, including bigger practices.”

Long-term planning constraints

Irrespective of whether you think private practices are doomed or the model of the future, you still have to decide eventually which model you want to follow. At the same time, planning is something that is becoming harder and harder as the crystal ball becomes murkier.

“Most oncologists I have talked to have given up on long-term planning within their practice,” said Eagle. “Planning anything beyond a five-year time horizon is not seen as viable in the current environment. We have had too many predictions of what is ‘inevitable’ in medicine that later failed to materialize.”

As practices think about what happens next, what are some of the things that they should be considering? One of the most important is what the physicians want to get out of the model they choose.

“Personally, I did not get into medicine to be an independent business person,” said Therese Mulvey, MD, physician chief at Southcoast Centers for Cancer in New Bedford, Mass. “I got into it to treat patients. Physicians should decide for themselves how they want to practice and then find the model that supports that decision best.”

Medicine is still a business

Although this is nice in theory, the reality is that medicine is a business. Money has to come in to pay the physician for his or her time, support the many services to patients that are required, hire a staff, pay for the new electronic health records and quality of care documentation needed to give great care and get paid for giving great care.

“Larger groups and hospital-based practices usually have access to greater resources,” said Kenneth Hertz, FACMPE, principal with Medical Group Management Association Health Care Consulting Group. “It is imperative that you have business resources available to analyze, run, manage, improve and correct, the medical side of the equation.”

Other practice models may result in a paycheck and resources for patient care that might not be a readily available in a private small office. Most of the day-to-day business operations are shouldered by the hospital or larger group, freeing up more time for seeing patients, keeping up with the changes in treatment, and other professional undertakings.

Community variables

Another thing for a physician or practice to consider is what is happening in the community. Mulvey notes that issues facing oncologists may be different in Massachusetts, where laws have long banned physician-owned ancillary services such as imaging suites.

Because of this, those practicing in the state have not subsidized the under-reimbursed costs of oncology treatment using income from these other services. Conversely, those in other states may have added problems if they need to replace this source of cash flow as Medicare and the private insurers move toward bundled payments or episodic care.

The advent of these newer payment methods also may mean that more of the financial risks are transferred to the physician and practice. As in most other cases, the more people you have to spread the risk over, the easier it becomes to manage.

“The margin for error has become so small that you not only have to be at the top of your game, but you have to stay there,” noted Hertz. “Being a good doctor is important, but that is pretty much the minimum. It gets you into the game, but that is all.”

Health care reform impacts

One of the unknowns is how the Patient Protection and Affordable Care Act is going to impact on practices. The sudden influx of new, paying, patients may keep smaller practices afloat.

“We still don’t have a good handle on what is going to happen in 2014 when a large population of patients suddenly gains insurance,” said Vivian Ho, PhD, the James A. Baker III Institute Chair in Health Economics at Rice University in Houston. “More people getting insurance and needing care means there is more money flowing into a system that may have to cope with physician shortages.”

She does think, however, that there will major differences in this between states.

“The benefit to oncologists from increasing the number of insured depends largely on the number of uninsured in a given state,” she said. “In Texas, where 25% of the population is uninsured, I think there will be a benefit. Now whether that is going to be the same in places like Connecticut, where there are already generous plans in place, is an open question.”

As oncology goes forward, the decision on practice model may boil down to one important criterion.

“Most of us who have changed our practice situations did so after a lot of thought,” said Mulvey. “It is not just about the money. It is simply how do I best maintain the ability to care for my patients?”