To start, Presbyterian (Hospital) does not profit on infusion services.
There are a few differences between a comprehensive cancer center vs. a physician practice that impact our costs. There isn’t an apples to apples comparison. As a comprehensive cancer center, accredited by the Commission on Cancer (CoC) of the American College of Surgeons, we are required to provide services that a physician practice is not. Those include:
This all means we provide many services for free or at a significant loss. In Charlotte, we do not profit on cancer rehab, Buddy Kemp support services, 2nd opinion clinics, the patient navigators, palliative care, research, education/screenings etc. All of these services are necessary to provide a quality, comprehensive oncology care experience. These are essential services that cancer patients and their families depend upon.
Presbyterian Hospital also does not profit on outpatient infusion. Our net income from chemotherapy services is a several million dollar loss every year. Like other services, we are not reimbursed for all of the care we provide for every patient. We provide charity care for oncology patients, but also lose money on Medicaid and Medicare patients, which make up the majority of our oncology patients. In 2011 Presbyterian’s payor mix for this service was 4% charity care, 12% medicaid, 55% medicare, 28% commercial, 1% other. We can agree that the health system funding model puts the brunt of payment on those with commercial insurance to help make up for government underfunding and the inability of others to pay for their care. We also agree that this model is broken.
Another important distinction between a private oncology practice infusion center vs. a comprehensive cancer center is the number of charity care patients seen. A private clinic is not required to accept any charity care patients and those patients are more likely to go to a hospital outpatient clinic in order to get the lifesaving care they need.
At Presbyterian, we do not have a general medical oncology group that’s part of our medical group or health system; however, we are fortunate to have a few oncology specialists, like GYN oncology, who are part of the health system mainly because those services would not be available to our patients if we didn’t recruit and support them. Those physicians benefit from the hospital because the cancer center makes it easier for patients to access research and the navigators etc. Certainly the electronic health record will allow for more seamless communication between the oncology specialists, primary care and other physicians who are involved in care for an oncology patient and is another reason some physicians may prefer to be part of the health system vs. independent.
You requested a list of drugs and what we pay vs. our cost vs. charges, but we are under contract with our suppliers to not disclose that information. Almost all of your questions focus on one, specific type of treatment, as if the price we pay for a drug somehow generates huge profits for a service and organization whose profits are minimal, and whose services are much more comprehensive than just one outpatient component. As for the Avalere Health report, they admittedly do not account for the acuity of the patient which significantly affects the cost of treating the patient - they discuss risk-adjusting for age and prior cancer diagnosis - yet they admit their risk adjustment was limited and that many more of the hospital patients were admitted as inpatients than the physician office patients (indicating they are sicker). So again, the easy comparison of hospital outpatient vs. physician practice treatment is not an accurate picture of the overall cost of oncology care for your readers.