Updated: Aug 24

As an oncologist in private practice in a rural community for nearly 20 years, I have witnessed the devastating impact of misguided healthcare policy on cost and access to care. Well-intentioned programs paying hospitals more for cancer services than private practices, ostensibly to offset the cost of indigent care, have been weaponized against community cancer clinics. Hospitals use wealth from cancer service payments to undermine community practices leading to reduced access in districts without the extra funds and increased costs for all. Outpatient clinics have become huge profit centers for hospitals, which use their payment advantage to induce physician employment with eye-popping high starting salaries. Such salaries cannot be matched by community centers which are paid less for patient services.

This payment asymmetry naturally results in localized physician shortages and exacerbates healthcare disparities. This perverse incentive known as the "site-of-care pay differential" has driven many private clinics out of practice and raised costs for consumers who ultimately bear the burden of rising insurance premiums and deductibles. These government-sanctioned hospital upcharges include facility fees, 340B drug prices, HOPPS infusion pricing, and regional specialty pharmacies. Higher-cost hospital clinics do not improve quality. Further, payment disparities move sites of care to more distant and less personal hospitals. Payment disparities also contribute to the geographic maldistribution of oncology services since not all districts have access to extra cancer funds.

The policy of hospital upcharges has failed because:

1. Hospitals use payment advantages to create oligopolies which further increase costs by stymying competition.

2. Hospitals use payment advantages to displace existing clinics depriving patients of their existing medical care.

3. Hospitals use payment advantages to entice physicians into lucrative, costly hospital employment at consumer expense.

4. Hospital payment advantages have exacerbated healthcare disparities by depriving other catchment areas of needed oncologist labor, which is inexorably drawn to higher-paying jobs at 340B hospitals.

ICOP, Innovative Community Oncology Practices, was formed to protect communities from the harms of unintended consequences from misguided healthcare policy. We aim to eliminate perverse financial incentives and keep cancer care in local communities in the hands of nimble community practices that offer better value. We insist on replacing "site of care pay differential" with a pay equity model in which private practices are no longer penalized for providing efficient, lower-cost care. We hope to counter the trend of practice consolidation in which oncology practices are rewarded with better prices by consolidating into large purchasing consortiums. This amalgamation of clinics is driven by incessant payment cuts for cancer services and by hospitals that aggressively abuse their payment advantage to expand into new markets. Hospitals that succeed in displacing community cancer clinics turn around and hire displaced physicians and workers at the higher-cost hospital clinic. The only consumer benefit of private practice consolidation is to keep higher-cost hospitals from completely overwhelming the outpatient oncology market.

When you walk through your local airport or sporting arena and see costly advertisements for a local hospital center, ask yourself: "Is this any way to spend money obtained from me, my insurance, and other patients? Is this not immoral? Wouldn't this advertising money be better spent on patient care?" One also notices that hospital centers concentrate their advertising in wealthy districts where clients are better able to pay their medical bills.

Community practices have less ability to select high-income customers and attract all clients poor and affluent. If non-profit hospitals are so focused on indigent care, why not advertise in indigent districts? Their argument against paying taxes, which may better serve the needy, is misleading at best and untrue at worst. Not-for-profit institutions, like all institutions, are enticed by financial rewards. The term not-for-profit is a misnomer- it should be "not-for-taxes." These organizations distribute would-be-profit not rendered to local tax jurisdictions to affluent executives and professional employees. They redeploy not-profit into new ventures designed to generate institutional income. This constant infusion of capital into new ventures results in an ever-increasing organizational footprint, an ever-increasing organizational overhead, and consequently an ever-increasing hunger for more capital. This contributes to the cycle of ever-escalating healthcare costs.

Hospital networks create expansive new centers for the administration of novel processes to serve institutionally defined quality metrics that yield marginal benefit but convey institutional prestige, which can be used to enhance revenue. The number of possible quality metrics in healthcare is infinite. Institutions choose quality metrics that deliver reputational and financial rewards. Metrics that might negatively impact reputation or revenue are not selected. The use of public monies in pursuit of institutional glory is of little practical value to consumers. Your healthcare dollars were intended to reimburse hospitals for the cost of providing your care, not as rivers of cash to float massive hospital budgets and burnish the institution's reputation. Because professionals who lead large healthcare institutions have primary loyalty to their institution and are mission-driven, at times to a messianic degree, they avoid such unflattering truths. They know Americans pay nearly twice as much as consumers in other advanced economies with no better health outcomes.

Hospitals lobby politicians for policies favorable to their financial position. Private medical clinics lack resources for intensive political lobbying. Hospitals hungrily seek public money and relentlessly pursue policy advantage. They warn of discontinuation of service lines and deterioration of "quality" if their requests are not granted. These warnings are veiled threats against those who might stand in their way. The hospital lobby, one of the country's largest and best-funded political lobbies, is quick to vilify opponents as uncaring or cruel using funds sourced from peoples' afflictions. Even fiscally conservative politicians motivated by a noble cause such as efficient operations, waste minimization and preservation of taxpayer trust are cowed. Hospitals find it easier to acquire new money from customers and taxpayers, whom they leverage via weak or corrupt politicians, than to streamline operations that have become bloated with a multilayered bureaucracy rationalized as serving some carefully devised and crafted quality metric. Hospitals play "chicken" with policymakers like two speeding cars on a collision course until one, usually the policymaker, turns away. The loser in this game is the public purse. This unhealthy dynamic forever removes the incentive for hospitals to become more efficient by jettisoning operations of negligible value.

Policy failure always falls to the inability to anticipate then measure the unintended consequences. A policy's full impact is seldom judged on both intended benefits and unintended harms because the institutions sitting in judgment usually had a hand in crafting the policy. Consequently, the influencer institutions are incentivized to ignore unintended harms because they gain rewards from the policy. Societal harms from unintended consequences take time to manifest and are challenging to identify and measure. Public elaboration of policy harms can put the policy-rewarded institution at risk of diminished funds and reputational harm. This naturally results in institutional denial of visible policy failure. Denial of policy failure is an expression of self-interest by policy-rewarded institutions. The phenomenon of policy-failure denial is widespread in healthcare and other policy-dependent sectors. If a policy-rewarded institution designs to weigh the harms of a policies' unintended consequences, they're apt to propose a remedy in which their institution is elevated as a problem solver because large healthcare institutions are haughty bodies that declare first rights on any healthcare problem. They will then seek to reap the rewards mined from another costly taxpayer-funded project designed to solve the problem incited by the original policy failure. The obvious solution, abandonment of the original policy, is anathema because it hinders institutional cash flow.

As always happens over time when human beings work within and around the rules of any regulated enterprise, that enterprise and the provision of that enterprises' services become distorted much in the same way that a car's shock absorber becomes deteriorated, or the tires develop dry rot. It naturally follows that the relationship between hospital and patient has become inverted because the rules used in the operation of the healthcare enterprise become distorted by the enterprise to the point the old rules become obsolete and stop serving their original purpose. Large institutions that once viewed their mission as serving the healthcare needs of their communities now view customers (patients) and policymakers (politicians) as serving their financial needs.

ICOP was formed to protect healthcare consumers from misguided federal policies. New rules must be devised to better serve the public interest to level the playing field between community oncologists and hospitals. Unfortunately, healthcare institutions' natural process of rule-bending has led to unintended harms, making the old rules obsolete. We must no longer allow consumers to ride in a vehicle made unsafe by policy failure. It is time to put the old car in the garage for repairs. We are beyond the point at which the shock absorbers and tires can be salvaged.

Keith Lerro, M.D., Ph.D.

Regional Medical Oncology Center

Wilson, NC

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As the COVID-19 pandemic starts to wane and Americans start to see semblance of normalcy, doctors and healthcare systems are left picking up the pieces of the events of the last 18 months or so. The pandemic has clearly magnified and worsened many pre-existing healthcare problems, most notably physician shortage.

The COVID-19-related retirements and death/disability of physicians, sadly in many cases, is already having devastating impacts, but the effects are being felt much stronger in areas which have had pre-existing shortages of doctors. Small and mid-sized communities which assume doctors will automatically get replenished are doing so at their own peril. The days of physicians who returned to their hometown no matter where it was located has been severely upended by several market forces and governmental policies. The financial risk, while dealing with the barrage of administrative burdens associated with patient care, is turning off young physicians from owning their own medical practice. The consolidation of care into larger organizations which can withstand risk due to their size and lobby the legislature with their deep pockets are hastening this trend. Additionally, younger physicians are preferring urban and suburban areas which have enticing turnkey employed positions as they graduate with larger and larger student debts.

The American Associations of Medical Colleges (AAMC) predicts a shortage of up to 122,000 physicians by 2032, with rural and historically underserved areas experiencing those shortages most acutely. Only 11% of doctors practice in rural communities, and as of 2019 over 62% of all federally designated primary care Health Professional Shortage Areas (HPSA) were in rural areas according to one study.

The number of physicians per 10,000 people is 13 in a rural area versus 31 in a urban location, according to the National Rural Health Association. What’s astounding is the shortage of specialists when comparing rural to urban communities. The discrepancy is a shocking 30 specialists in remote areas to 263 available to metropolitan areas per 100,000 people.

As it has in the past, the AAMC has supported passing legislation that would increase federal support for an additional 3,000 new residency positions each year over the next five years. But you need many doctors to train a doctor, and the complexity of increasing training program slots without compromising quality is a discussion in itself.

In a physician-owned cancer clinic, patients walk in through the front door because of the physician’s reputation and the results that he or she provides. The conversations with your personal hometown physician over sickness or about general wellbeing have deep impacts on a person as the message is being delivered by person who knows a good bit of your life story as the doctor is a part of the same community. I have personally seen how a simple and focused conversation about kicking a habit like smoking has had on a person’s life.

Additionally, a physicians clinic has an outsized impact on the local economy in terms of well-paying jobs and people migrating into the community for short-term needs and long-term retirement. Besides, study after study has shown that your local cancer doctor’s office is a significantly cheaper site of care compared to a hospital system.

The effects will be quickly felt when one must drive 50 miles for basic acute and preventative care that used to be available in under a 10-minute drive. Imagine the impact on your work and family life if you must be away from family and friends for chemotherapy or radiation which could last 7 or 8 weeks in a city where you do not know anyone.

Lamenting about the situation without solutions is ineffective. These are complex forces that drive this trend and hence any attempt to provide bumper sticker solutions may be frustrating to a policy guru, but change must start somewhere. In fact, every major piece of legislation started off as an idea somewhere from someone. In my opinion, we can change the trajectory of this issue by changing the incentives that drive this perverse concentration of medical resources through legislation and through local community action, the latter being a more achievable task in the highly partisan political era in which we find ourselves.

Concerned citizens need to talk and write to their elected representatives, both at the state and federal level about their ideas on legislation that will increase incentives for practitioners to move to smaller communities. This can be done at the medical student level by forgiving student debt, by increasing reimbursement for practicing in these areas and decreasing administrative burdens. Misguided mandatory risk sharing demonstration models from the government stand to do nothing other than push younger cancer doctors to work for a hospital and hence must be nipped at the bud. There are a lot of smart folks who can propose legislation, but a majority of citizens must notice what is going on and demand bold action. Policy follows people’s appetite for action in any democracy, and your elected representatives will listen if enough people make those calls.

At the community level, the local chamber of commerce (COC) needs to collect data on healthcare practitioner trends over time and come up with a plan in conjunction with the physicians on how to make the community attractive for future recruitment and prevent early retirement and closures. The local COC needs to view a doctor’s office as a ‘small business of special significance’ and look into projected 5- and 10-year future trends for coming up with an action plan. Local citizens can do their part by creating not-for-profit charities to support patient’s skyrocketing out-of-pocket costs for healthcare. Additionally, larger healthcare systems with community presence need to find innovative ways to invest in the long-term viability of their local physicians. It would also help if certain well-meaning but misguided legislations (certain provisions of stark/anti-kickback laws) are amended to collaborate with cancer clinics in underserved areas instead of trying to swallow them.

The bottom line is that small and mid-sized communities can no longer take local cancer care for granted. Local citizens and groups that take innovative and proactive steps to retain and support reputed local doctors and their clinics in their communities like any other small business, will reap its significant benefits both in the short and long term.


Dr. Harsha Vyas MD FACP, is a practicing Medical Oncologist and Hematologist in Dublin, Georgia. He is an Assistant Professor of Medicine at Augusta University. He along with his partner founded the Cancer Center of Middle Georgia, a private practice community cancer center providing Hematology and Oncology care in Dublin, Georgia. His mission is to deliver quality, comprehensive, compassionate care to cancer patients in and around Laurens County in Central Georgia.

Dr. Vyas is a member of American Society of Oncology (ASCO), Community Oncology Alliance (COA), American Society of Hematology (ASH), and the American College of Physicians (ACP). He is an active member of the governmental affairs board of the community oncology alliance which advocates for the community cancer patient.

Dr. Vyas has also been involved in various advocacy activities including communicating the importance of preserving community oncology as the best way to deliver personalized, high quality, affordable, accessible cancer care.

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  • ICOP

Despite the rising cost of drugs, including targeted therapy, immunotherapy, and non-oncology drugs such as the new drug for Alzheimer’s disease, which costs $54K per infusion, the fact is: drug cost consumes 19% of the total health care cost. That is high and has increased by 2% in the last four years.

The devil is in the details. The cost calculation is based on what is paid by insurance, not the cost from manufacturers. That is the tricky part that hospitals and academic centers have succeeded in confusing the public and even the astute policymakers. Examples tell a story. Examples are no longer anecdotes; they are becoming the standard of what we see. We at Gabrail Cancer Center have a side business model based on a book I wrote 13 years ago titled “Good Medicine is Cheaper Medicine.” That book triggered a friend and me to start a primary care clinic at the worksites in factories and large businesses. It has been a great business model, an educational program, and very cost-effective service for employers. We are painfully learning that large hospital conglomerates and academic centers are indeed the cause of rising health care costs in general and drug costs in particular. For example, medicare pays $2,097.00 for a Remicade infusion when delivered at a free-standing community infusion center such as ours. Yet the next-door academic center, a misnomer as it could be called a money-laundering center, charges and gets paid $19,000 per infusion. That is one example of hundreds or thousands. Yet, when employers complain, the scientific-academic complex responds, “we are safer,” really…? Being close to academic centers geographically, we have learned to our disgust that the inflationary force behind increasing drug costs is not the actual price set by pharma- to some extent, it is, but when academic centers bill 10-fold what Medicare pays, we have a severe problem. It is puzzling that this has been going on for decades, yet it is grabbing no attention. As my friend Dr. Keith Lerro mentioned in a previous blog, hospitals and academia are good salesmen and women. They claim the untrue, they slander community physicians, and they get away with it. It is frustrating, especially when our policymakers hibernate in their pit holes, putting a thin veil on their faces refusing to face the problems we have, problems that can easily be solved if there is a will and understanding of logic. While we can’t change the politician’s mindset or guide academia to be scientific, we have decided to go to the people who write and sign the checks, the employers, and we have succeeded partially. We only succeed when people think outside the conventional wisdom. So, we have succeeded in diverting infusions from academic centers to our center, and employers are happy to see 700% savings on expensive drugs. The hope is that our advocacy groups will propagate these ideas and expose the abuse of the health care system by academia and large hospitals- but alas, we in community oncology and our patients have no influential advocacy group. Instead, we have organizations that care more about how much money they get from Pharma and insurance companies and have no interest in exposing the abuses that hamper access to care because of the sinful exorbitant cost. We at ICOP are not only fighting to save community oncology, which is the icon of cost-effective, accessible, and superb care, but we are fighting for access to care for all cancer patients. Nashat Y Gabrail M.D.

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