Work Out the True Value of Services Rendered

Mike Hennessy
Published: Saturday, Nov 21, 2015
Mike Hennessy

OncLive Chairman,
Mike Hennessy

Site neutrality sounds like something from the Cold War—a zone on a bridge between two ideologically different countries, for instance. In oncology, it’s something completely different. It’s actually the idea that large institutions like hospitals should not be compensated more for delivering the same services that private practices do. It has received a lot of emphasis as a goal in President Obama’s 2016 budget, but it’s not getting consistent support within the medical community.

Much of the payment structure associated with oncology has a built-in aspect. If you want to change something, you are liable to cause a great deal of disruption to an awful lot of people whose livelihoods and investments depend upon the status quo.

There’s another quality to the resistance to site neutral payments in oncology. There is the argument that if you throw in all of the ancillary services that large hospitals provide in addition to plain-vanilla oncology, you are technically able to claim that there is, in business parlance, a lot of “value added.” In other words, for all of the extra money patients are spending for oncological care at a city center hospital, they are getting their money’s worth.

This is the argument that ASCO has put forth in a recent attempt to influence the public discussion of the merits of switching to a site-neutral payment structure for Medicare. ASCO contends that such a move would be arbitrary and far less successful than what it recommends be done: create a patient-centered approach that diverts more resources toward implementing value care that heads off expensive treatment through proper intervention.

Associations of community physicians, for their part, contend that the payment differential for hospital versus private practice care is simply too wide to be justified by any ancillary services delivered. They cite the huge markups that can be 100% or more for standard procedures. Community practices not only deliver these services for significantly less payment, some might argue that it is better to specialize by allowing community practices to do what they can more economically and leave the rest to the bigger facilities.

There seems to be merit to both sides of the argument, but undoubtedly, there is room enough within the bigger picture for some acknowledgement that perhaps the lopsided payment structure is a little unfair to community practices, and also that there may be some unfunded services within the larger institutions that are subsidized, in part, by the higher Medicare payments afforded them for oncological care.

It is certainly hard for an entrenched lobby organization to offer concessions in a debate that could leave its membership with a disastrous readjustment in the aftermath. But one only has to look at the example created by the 340B program to see the long term results of such a willful game of myopia.

We do need our community oncology practices. To continue insisting that they do the same quality job as the bigger cancer centers while working with such a huge payment disadvantage is not only unreasonable, it could be construed as reckless. On the flip side, let’s do what we can to promote interventional care so that expense liability can be contained down the line.


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