Cost-Containment Efforts Top Trend in Community Cancer Centers

May 2012, Vol 3, No 3

Baltimore, MD—Results from the latest survey of the Association of Community Cancer Centers (ACCC) membership suggest that although cancer centers have stepped up their efforts to introduce cost-reduction and revenue-enhancing initiatives, the rising tide of underinsured or uninsured patients with cancer is straining even the most optimistic of business plans.

The survey, Cancer Care Trends in Community Cancer Centers, has been conducted annually for the past 3 years. A total of 59 community cancer programs participated in this survey.

“As in previous years, a majority of the survey respondents are not-forprofit programs that provide both inpatient and outpatient services,” reported Rhoda Dunn of Kantar Health, “and 78% represents community hospital programs.”

Ms Dunn’s presentation at the 2012 ACCC annual meeting highlighted the following key trends:

  • Cost-containment
  • Revenue enhancement
  • Drug acquisition
  • Patient affordability
  • Commission on cancer standards.

Community Cancer Cost-Containment

All survey respondents are actively engaged in controlling costs. That being said, “Cancer programs report that their financial health is ‘good’ or ‘very good,’ and this has been consistent over the past 3 years,” Ms Dunn said. “It suggests that cancer is insulated, to a certain extent, from variations in the economy.”

Nevertheless, cancer programs are engaged in efforts to control costs, but these are largely not clinically focused, as can be seen by these cost-cutting initiatives indicated by respondents:

  • Reducing education-related travel expenses (81%)
  • Engaging in renegotiation of vendor contracts, “particularly around the purchase of infusion oncology drugs” (68%)
  • Cutting administrative costs (64%)
  • Delaying purchasing of equipment (58%)
  • Staff reductions (42%).

“What is different this year…is that hiring freezes have dropped dramatically between the second and third year of the survey—32% last year as opposed to 57% the previous year; these are very encouraging changes,” said Ms Dunn. ACCC members also emphasized that rather than freezing hires or even reducing staff, the focus is on the “right” staff with regard to overtime, benefits, retirement programs, and call pay.

Regarding cost-containment via purchasing, one survey respondent described their efforts this way: “We did Six Sigma about 18 months ago. This program helped us increase value add and remove waste. Specifically, we improved the way patients flow through the system, as well as reduced drug inventory.”

Revenue Enhancement

“Although [revenue enhancement] has always been important,” Ms Dunn said, “we are now seeing a lot more focus here.” Topping the list of things programs are doing is an increase in physician-to-physician liaisons (61%). “Referral patterns are very important in establishing referral networks—that came through as a major focus in the survey this year.”

Other initiatives include increased coding reviews (56%), introduction of new technologies “to enhance offerings,” increased advertising (39%), and reduced rates of implementation, including mergers and acquisitions, increased pricing, and increased screening activities, in that order.

Regarding coding reviews, the use of reimbursement specialists is on the rise—29% in 2011—but this proportion does not seem to correlate with the need. “Respondents are of 2 minds here,” said Ms Dunn. One view recognizes the value of such professionals, but a different perspective suggests that the people administering the services to the patient should also possess the required expertise. “On the whole, we are seeing a greater uptake of reimbursement specialists in community practices, where they are more subject to a variable cash flow.”

Survey results indicate that cancer programs can increase their revenue primarily through community physician outreach and by adding services. “Cancer programs rely on their service- line physician groups to network with local physicians who can refer oncology patients,” said Ms Dunn.

Cancer programs also expect to attract referrals by expanding infrastructure, adding technology, and enhancing program offerings. Approximately 50% of the cancer programs surveyed are planning to expand their infusion center, with many (20%) anticipating the use of a satellite facility.

One survey respondent noted, “To drive new volume, we are looking at adding oncology rehabilitation, outpatient palliative care, and a survivorship clinic.”

Although 51% of respondents indicated a desire to add new technology, “IGRT [image-guided radiation therapy] (78%) and CyberKnife (17%) are the only areas of significant growth over the 3 years of this study,” commented Ms Dunn. The general feeling is that right now, major acquisitions are to be approached cautiously, if at all.

Drug Acquisition

Participation in the 340B drug-pricing program is increasing, and oncology practices are seeking out affiliations to gain access to the economic benefits. Ms Dunn believes that this rise is being spurred by loosened eligibility criteria and by increased discounts included in the Affordable Care Act. “Participation in 340B is strongly on the rise, with 26% of respondents on-board in year 1 of the survey to almost 50% by year 3,” Ms Dunn pointed out. In addition, 6 of the 32 organizations currently not participating have indicated that they soon plan to sign up. However, “All current participants were quick to point out that the program is difficult to administer, particularly at the onset,” she noted.

Acquisition of injectables through specialty pharmacy is also on the rise, from 16% last year to 32%, with payers driving the rising trend. “Payers can then reimburse at a lower rate, because specialty pharmacies have bigger volumes,” Ms Dunn noted. “However, from the hospital perspective, it is like going to a BYOB [bring your own bottle] restaurant, but in this analogy you not only bring your own bottle; [you] ask the restaurant to store it for you and then serve you, thereby making the establishment liable should you get sick from drinking too much wine.”

This practice does not seem to be in the best interest of the hospital. As one respondent commented, “It is a lot of additional work to verify the source and whether the drug is legitimate. Ultimately, we may need to charge an additional fee for this.”

Patient Affordability

Many cancer programs (75% in this survey) continue to see an increase in the number of uninsured/ underinsured patients receiving chemotherapy. At the same time, 47% reported that the number of commercially insured patients is dropping. “Roughly a quarter of patients being seen have Medicaid plus a secondary [insurance],” said Ms Dunn, “another quarter are on commercial plans, and 20% are covered by Medicaid alone.”

Consequently, cancer programs are seeing more patients who need help affording their medications: 95% of respondents say that patient coverage is inadequate and that they require help with their copays; 83% report an increase in patients who must be referred to patient access programs.

“This is resulting in more and more administrative time in the hospital,” said Ms Dunn, “while at the same time we are talking about cutting administration expenses. This is a bit of a conundrum.” And 80% of respondents transportation expenses—up from 69% just 1 year earlier.

As one respondent stated, “Moving forward, we plan to have a dedicated person to get free and replacement drugs and copay assistance.”

New Commission on Cancer Standards

This “was a very hot topic this year,” Ms Dunn said. “Members agree it will be good for patients, but are concerned about meeting the new requirements.”

The new standards include the provision of treatment and survivorship plans, palliative care services, genetics services, navigation programs, and psychosocial distress screenings. “Most difficult is the treatment summaries and care plans. These are not in the EMR [electronic medical record] and need to be done by hand,” which is very time-consuming, commented one respondent.

Another survey response was, “Evaluating patients for psychosocial distress is one thing, but we need to have the resources to help these patients when we find them.” Although the standards are overall seen as a good idea, there is widespread uncertainty about how to achieve them.

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