Medical Monopoly

The Federal Trade Commission does not shy away from controlling the monopoly power of banks, pharma, and all sorts of businesses for the right reasons. Monopolies are the achilles tendon to free markets and capitalism, and rightly so. Thomas Jefferson was cognizant of the danger of monopolies, especially of patent rights, so much so that although he had several inventions, he refused to patent them. This by no means infers we are against patent rights, but those rights do interface with monopoly powers.

The fight against monopolies is based on one simple principle carved into the constitution: the right and freedom to choose. The choice is only feasible when there are competing options, the absence of which eliminates that right that is so fundamental to our freedom. Yet, the government seems to look the other way when it comes to the health care industry. Take, for example, Pittsburgh, Pennsylvania. It is the major city in Western Pennsylvania, yet there are only two health care systems, and patients have no choice but to choose between the University of Pittsburgh Medical Center and the Allegheny health care systems.

Likewise, the market in Cleveland is controlled by the Cleveland Clinic and Case Western Reserve University health care systems. In fact, those large conglomerates don't stop there, as they have acquired regional hospitals and practices within a 100 miles radius of their headquarters.

In Iraq, where I grew up, deer meat is a delicacy while rabbit is a poor man's food. In Iraq, we say, "if you want a rabbit, you get a rabbit; if you want deer, you still get a rabbit." It seems policymakers in the U.S. (and maybe worldwide) have the philosophy of large institution preference, although all will get a rabbit, no choice. Sadly, despite all the scientific evidence that shows care at small community-based practices is more accessible, more convenient, and more cost-effective, with arguably better outcomes. In fact, more clinical research and new drug development are done at the small and medium-sized community oncology practices than at academic centers and large hospital conglomerates. This is not a guessing game. It is very much in line with having the Walmart’s and Walgreen’s of the world choke off the mom-and-pop shops.

Those of us who believe in the ideals of the American way will not give up; it is in our blood and genomic framework to fight for the ideas of the free market, freedom of choice, and refusing to bend to the power of monopolies, especially when it comes to almost crucial aspect of our lives, our livelihood, and our health. This is why organizations like ICOP and other similar platforms have recently sprung up. We are not asking for preferential treatment; we strive to provide the best care at a lower cost, very simply. We believe the pendulum has swung too far in one direction, but we believe in Galileo's observation that the farther it swings one way, it will swing at equal distance in the opposite direction, simple physics. We just need to give it a little push.

Nash Gabrail MD

Gabrail Cancer & Research Center

Why are so many community clinics being taken over by hospital systems?

The data below was directly from the Community Oncology Practice Impact report for 2020.

The 2020 Community Oncology Practice Impact Report data shows that over the last 12 years, 1,748 community oncology clinics and/or practices have closed, been acquired by hospitals, undergone corporate mergers, or reported that they are struggling financially. Specifically, the data show:

• 435 clinics closed

• 722 practices acquired by hospitals

• 203 practices merged or have been acquired

Since the last Community Oncology Practice Impact Report issued in 2018, there has been a 20.8 percent increase in practices merging with, or being acquired by, another community oncology practice and/or acquired by a corporate entity. The most important reason that community clinics are being acquired by hospital systems is the 340b program. A brief history of the evolution of cancer reimbursement. For years, cancer care was paid for directly for the services provided. There were many centers, however, which served a population of uninsured or underinsured patients. In order to help institutions that serve this population, the government created a program called the 340b plan which was rolled out in 1992. That program allowed hospitals, not outpatient clinics, to purchase chemo drugs at very discounted rates and then bill at hospital rates (which are significantly higher than outpatient rates). Therefore, they could still provide care with the larger margin and still be solvent. There are strict criteria for being a part of a 340b program, namely, that a certain percentage of the patients are required be underinsured or have no insurance. However, these programs get to purchase all of their chemo at the low rates, not just the chemo for the indigent patients. The 340b institutions then get to bill all of the patients, including those with commercial insurance, for the hospital rates. Over the years this program has grown exponentially. This is a major source of revenue for most large institutions and organizations. This has unfortunately driven up the cost of cancer care substantially. This is absolutely the biggest reason that hospitals are taking over community cancer clinics. In theory, the 340b program was meant to help hospitals that served the underinsured or those with no insurance. Community practices at this time cannot be a part of the 340b program no matter how many underinsured or no insurance patients we see. An article in JAMA advocated the inclusion of community oncology practices in the 340b program, but that is not a reality at this time. Hospitals can then buy their drugs far cheaper than we can and sell the drugs to payors at far higher rates. Their profit margin is far greater, but it is also one of the prime reasons that cancer costs are increasing.

Mark Bettag, M.D.

Sheboygan Cancer & Blood Specialists

Why Community Oncology Integrated Networks?

Stating the obvious may be redundant, but repetition can help drive the message home. Community oncology, especially small and medium size oncology practices, are swimming upstream without a paddle. These practices are adamant about their independence despite the adversities, because they love their independence more than the augmented revenues of larger practices. This is nothing new in America and should be celebrated, but under current circumstances needs to be assisted.

The attack on independent community oncology started more than a decade ago and was fueled by preferential payment, in the form of enhanced fee schedules, to hospitals and academic centers. The federal 340B was a catalyst in that huge margins from chemotherapy and supportive care drugs stuffed money into the pockets of hospitals, enabling them to generously pay employed oncologists. This created an unfair advantage for hospital practices over already established practices in the community. It has become a systematic hostile takeover of a large proportion of those practices. Restrictive referrals practices by hospitals has been the last nail in the coffin.

It does not stop there, although I sincerely compliment and admire the mega practices since they absorbed and sustained many struggling small and medium size practices. The existing small independent practices are at a disadvantage through preferential pharma and GPO contracts, since upfront discounts and rebates are sometimes higher by several fold for the mega-practices. Pharma, because of the herd instinct and copycat strategy, has encouraged the mergers of practices and small practices to be acquired by larger ones. Yet many of us remain resilient, innovative, and resistant to such a sell out.

In future blogs on this site, I will explain why we need the small and medium size independent practices, but for now we will address what we are doing at Innovative Community Oncology Practices, or “ICOP”. We at ICOP are determined to change the dialogue and policy, a policy that has been misguided. Through our conglomerated size, zeal, and determination we are changing how we think, how pharma thinks, and how GPOs deal with us.

We are working on making contracting with pharma more equitable and expanding the scope of services rendered at our thriving cancer centers and practices. Our clinical and billing data is being sold behind our backs- we will stop that since our data is ours, we generate it, we own it, and if it has value that value is ours. As a bunch of determined oncologists who know what is going on, we will leverage our knowledge and talent to benefit our patients and our practices.

Fortunately for us and the oncology profession, the reception and perception from pharma and GPOs has been positive, and in fact in many cases encouraging and supportive. We are witnessing a change in the paradigm of how oncology is shaping up in the third decade of the 21st century.

I urge all small and medium size oncology practices to join ICOP, it is your ultimate home.

Nash Gabrail M.D.

Gabrail Cancer Center

Canton OH