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Inflation

Current inflationary trends will affect every business sector of American society, some more than others. Although we do care about society at large, ICOP is focused on addressing the longevity and survival of independent community oncology, which has been compromised to a great extent in the last decade. These compromises, in the past and present, make community oncology more vulnerable to inflation. Therefore when the price of gasoline and bread rises, we, the owners of independent oncology practices, have to adjust the wages of our employees to offset these rising prices because we care about the well-being and financial livelihoods of our associates.





The cost of running a business is naturally affected by this inflation, not just the higher wages paid to employees. We have to pay extra for heating and cooling. We expect a rise in the cost of supplies needed to administer chemotherapy and other services. Ironically, we don't get paid for these supplies. Long ago, CMS and payers decided the cost of tubing, fluids administered, needles, port access devices, angiocaths, and many other things would be included in drug administration fees. We absorb that cost. Any additional increase in the cost of supplies is a net loss from our bottom line. I don't foresee a reversal of bundling fees: history has taught us a lesson- that payers keep lowering our reimbursements and rarely increase despite the normal annual increase in the cost of living.

In the current environment, the cost of living is trending toward a double-digit increase. In fact, we just learned that wholesale prices had gone up 9.6%. That increase is generally passed on to the consumer because the tail of the supply distribution chain will not absorb the increase in cost. Massive inflation is daunting to all of us and is already impacting independent community physicians, oncology practices in particular.

The most alarming observation to me is the labor shortage. The laws of supply and demand have come true to their scientific promise. We at community oncology have quickly adjusted to the labor shortage by raising wages for existing employees and for future hires, as we had no choice. But, again, without a substantial adjustment to our fee schedules, community oncology is in a bind.

We should not expect private payers to meet our needs voluntarily- they don't do that, and have not done that historically- but there is light at the end of the tunnel.

Most payers use a fee schedule based on CMS reimbursement rates. That means if CMS raises their fee schedule, payers should follow suit (if they honor their current contracting schedule) unless they decide to adjust their percentage of what CMS pays.

So far, the Government seems eager to give substantial raises to their employees as they target physician fees whenever a cut in health care spending is planned. So what should we do?

First, political activism is critical. We need to start calling our federal elected officials, educating them (a hard task) on the danger community oncology is facing. Second, as I have explained in the past, diversifying the scope of our services makes us less vulnerable to government actions and policies. Examples of diversified services are clearly outlined and implemented at our cancer center, including imaging services, on-site primary care clinics for medium and large-size employers, Covid mitigation services, and many other lines of services we share with our Sargon/ICOP Summit attendees. Thirdly, the only professional service community oncology can excel at without reliance on Government and payers is Clinical Research. We factually negotiate contracts in earnest and transparency. We accept trials that are economically viable and profitable to our practices. Sponsors of clinical trials want to attract well-performing sites and are willing and able to pay the prices needed and required. Moreover, sponsors do pay on time, with no preauthorization and no retroactive verification chart review, as payers and CMS often do, which sometimes requires us to pay back what we have earned legally and professionally.

Yes, clinical research is cumbersome, especially for the research virgin sites. But we have succeeded in overcoming those challenges through our Sargon Research Network, where we help practices start from scratch with the hope of intent that those affiliates will soon be as successful in research as Gabrail Cancer Center has been in the last two decades.

I know I have highlighted the negative side of inflation and its impact on the future of community oncology. Still, I am an optimist, zooming on solutions that I have outlined above to provide tangible long-term solutions to our everlasting unpredictable challenges. Unfortunately, those challenges are, for the most part, manufactured by the Government. But as President Ronald Reagan (the Great One) said, " Government is not the solution, it is the problem.”

Nashat Y Gabrail, MD

Gabrail Cancer and Research Center

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