Publication

Article

Oncology Live®
Vol. 25 No. 7
Volume 25
Issue 7

Leveraging Managed Service Organizations to Provide More Affordable, Personalized Cancer Care

Author(s):

To combat the rising costs of cancer care, clinicians are partnering with managed service organizations to handle the business aspects of practice.

David Eagle, MD

David Eagle, MD

As the cost of cancer treatment continues to rise for both patients and providers, independent clinicians are being forced to consolidate with larger health care systems to stay financially afloat. However, some clinicians believe this trend has negatively affected their ability to provide patients with timely, personalized care. To combat the rising costs and avoid the monopolization of cancer care by large health care systems, clinicians are partnering with managed service organizations to help handle the business aspects of practice without losing their autonomy.

According to a survey of patients with cancer and cancer survivors (n = 1218) conducted by the American Cancer Society Cancer Action Network, 73% of patients and survivors were concerned about their ability to pay current or future costs of their care and 70% are worried about accruing medical debt as a result of their cancer care and treatment. Additionally, 51% of patients and survivors reported that they were in medical debt following their treatment, with 53% and 46% facing collections and observing a negative impact on their credit score, respectively. Moreover, clinician payments from Medicare declined by 29% from 2001 to 2024 adjusting for inflation in practice costs, according to the American Medical Association.1,2

“The fundamental fact is that the old standard physician models are being challenged by declining reimbursement and new regulatory programs, such as the Medicare Access and CHIP Reauthorization Act of 2015 and the Merit-based Incentive Payments System,” David Eagle, MD, the chair of legislative affairs and patient advocacy at New York Cancer & Blood Specialists and the chair of the Advocacy Committee for OneOncology, said in an interview with OncologyLive. “A lot of practices feel like they have to go somewhere. Historically, the main place they’ve been able to go is the hospital. But that has higher costs and facility fees, [can have] less productivity, and [provides] less convenient care for patients. We’re really excited about [managed care organizations] that offer a different pathway for practices to manage those challenges and stay independent.”

Research has indicated that in addition to a greater level of personalized care and responsiveness to the needs of individual patients that naturally come with treating fewer patients in a more intimate setting, independent clinicians can offer a significant cost-saving advantage to their patients. According to findings from a matched-claims analysis of claims from the IMS LifeLink database spanning 2010 to 2015, patients with breast, lung, and colorectal cancer (n = 6675) experienced significantly increased costs of care when treated at hospital-based clinics compared with those who received care at community- based clinics.3

Findings from the study, which were published in JCO Oncology Practice, demonstrated that the mean cost per patient per month was $12,548 (SD, $10,507) among patients treated in the community setting compared with $20,060 (SD, $16,555) for those treated in the hospital setting (P < .001). The mean chemotherapy costs per patient per month were also lower in the community setting vs the hospital setting, at $4,933 (SD, $4,983) vs $8,443 (SD, $10,391), respectively (P < .001). Notably, the lower cost in the community setting was irrespective of chemotherapy regimen or tumor type and the baseline characteristics were well balanced between the 2 groups.

“We have seen this pivot from a volumebased [care] to a value-based [care] world; over 20%, almost 25%, of all of our patients are in a value-based arrangement,” Fred Divers, MD, a hematologist and oncologist at the Genesis Cancer and Blood Institute in Arkansas, as well as the chief medical officer and advisory board chairman of the American Oncology Network, said in an interview with OncologyLive. “[Large] health systems have no interest in participating in that and don’t have the bandwidth or wherewithal to really perform in those models.”

Despite the treatment-related cost savings they can offer to patients, independent providers are becoming rarer due to the increasing consolidation of providers into larger institutions. From 2015 to 2022, the number of medical oncologists increased by 14.5% from 11,727 to 13,433; however, the number of practices decreased by 18.0%, from 2,774 to 2,276, according to a study using Medicare data published in JCO Oncology Practice. The mean number of medical oncologists per practice also increased by 40%, from 4.26 to 5.95 (P < .001).4

Using the Herfindahl-Hirschman Index (HHI), a measure of market concentration that compares the size of firms within an industry and is calculated by summing the square of each firm’s market share, the degree of consolidation among practices with medical oncologists increased significantly from 2015 to 2022. The median HHI was 0.3204 (interquartile range [IQR], 0.2130-0.5273) vs 0.3480 (IQR, 0.2295-0.5200) in 2015 and 2022, respectively, corresponding to a 9% increase.

The percentage of medical oncologists working in solo practices decreased from 8.8% to 5.7% from 2015 to 2022. Additionally, the percentage of medical oncologists working in small (2-10 medical oncologists) practices decreased from 37.2% to 28.1% over the study period and the percentage working in medium (11-24 medical oncologists) and large practices (≥ 25 medical oncologists) increased from 21.2% to 22.5% and 33.6% to 43.7%, respectively, over this time frame (Figure).4

“Consolidation is going to continue, [but] managed service organizations allow physicians to stay independent,” Jeff Patton, MD, the CEO of OneOncology, said in an interview with OncologyLive. “Patients should have the option to go to an independent private practice doctor, an academic medical center, or a hospital-based system. Consolidation within the private world will be managed service organization driven and we’ll see continued hospital consolidation.”

“The managed service organization model is horizontal consolidation, whereas vertical consolidation, such as hospitals buying practices, has very different effects, markets, pricing, and the look and feel of medicine. [Managed service organizations] provide networking of good private practices across the country, creating the best processes and practice support. That has a very different impact on local markets than vertical consolidation inside a hospital,” Eagle added.

Managed Service Organizations Offer a Potential Solution

Managed service organizations are institutions that serve the purpose of separating the clinical aspect of medical practice from the business and administrative side. Managed service organizations can assist independent clinicians with services such as patient scheduling, equipment and space leasing, bill paying and bookkeeping, and compliance issues, as well as patient billing, coding, and collection.5

“It allows doctors to be doctors; all of the clinical decisions are made by physicians,” Patton explained. “Many of us have central democratic boards, where we get together and try to develop consensus best practice. But even after we do that, the individual doctors get to adopt that consensus decision or not. [Managed service organizations] take away the burden of running a business.”

Patton also noted that managed service organizations can provide smaller oncology practices with access to capital outside the large health care ecosystem to recruit new talent, grow in their market, and offer the latest advances in care. Most physicians are limited liability corporations that zero out their books every year without retaining any capital to invest in themselves; managed service organizations can offer an avenue to capital to compete in a market that includes large health care systems that have the resources to put smaller practices out of business in a competitive marketplace, Patton said.

By allowing clinicians to focus on patient care, the managed service organization model allows room for greater innovations in care and allows individual providers to showcase their unique talents, said Divers. “We have providers who are keenly interested in developing research, we have providers who are interested in developing data analytics, and providers who are interested in pursuing patient advocacy and policy changes. Those individuals are not in the same building; they’re not in the same town. But because they’re part of a larger managed service organization network, you can learn just by best practices from each of those strengths. The talent pool of a managed service organization is a huge value add because they’re bringing in talent from all different areas of that network.”

Another benefit of the managed service organization model is that it better equips clinicians working in practices in rural areas to provide the best care possible for patients who often do not have the option of seeking treatment at a large health care center. Beyond the larger geographic reach of preserving smaller clinics in more remote areas, managed service organizations can also provide these practices with the resources to stay afloat and provide better care in these underserved areas. The expanded staffing of the model allows smaller rural practices to provide drugs to uninsured patients through the employment of financial counselors and prior authorization teams and also provides data informatics services that would often be too expensive for these types of practices. Additionally, partnership with a managed service organization allows for better access to clinical trials for rural patients and at the same time enables the trial to get a better representation of the entire population that may eventually receive a new agent.

“The barriers to entry [for independent clinicians] without some structured support are so high; also the need and appetite are going to continue to grow to be a better steward of the health care dollar while maintaining high-quality care for the patient,” Divers said in conclusion. “In my view, when I talk about value-based care, quality care, I don’t mean capitated expenses. I mean finding the right therapy for the right patient at the right time. That’s where the precision medicine, data analytics, [as well as] the backdrop and support of a [managed service organization] network allow you to be a much better steward of the health care dollar.”

References

  1. Survivor views: cancer & medical debt. American Cancer Society Cancer Action Network. March 17, 2022. Accessed April 23, 2024. https://www.fightcancer.org/policy-resources/survivor-views-cancer-medical-debt
  2. Medicare updates compared to inflation in practice costs (2001–2024). American Medical Association. March 2024. Accessed April 23, 2024. https://www.ama-assn.org/system/files/2024-medicare-updates-inflation-chart.pdf
  3. Gordan L, Blazer M, Saundankar V, Kazzaz D, Weidner S, Eaddy M. Cost differences associated with oncology care delivered in a community setting versus a hospital setting: a matched-claims analysis of patients with breast, colorectal, and lung cancers. J Oncol Pract. 2018;14(12). doi:10.1200/JOP.17.00040
  4. Milligan M, Erfani P, Orav EJ, Schleicher S, Brooks GA, Lam MB. Practice consolidation among US medical oncologists, 2015-2022. J Oncol Pract. Published online February 26, 2024. doi:10.1200/OP.23.00748
  5. MSOs for oncology practitioners. Cohen Healthcare Law Group. Accessed April 23, 2024. https://cohenhealthcarelaw.com/2023/01/msos-for-oncology-practitioners/
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