Community–Hospital Relationships: Working Together to Define What Is Right for Patients

Dawn Holcombe, MBA, FACMPE, ACHE

October 2014, Vol 4, No 6 - From the Editor


Once upon a time, there existed a town–gown divide in healthcare: a large academic center in one part of the state sought referrals from physicians in surrounding communities, but the physicians were reluctant to send too many referrals because often they would not get the patients back. The academic center would denigrate the private physicians as not having adequate resources to handle complex cancers, and the private physicians would denigrate the academic center as being caught up in an ivory tower, out of touch with the daily practice of diverse community medicine.

In current times, academic or hospital systems are likely to have acquired many of the private practices in their market—mostly primary care—but in doing so they may also have gained control of referrals to specialty care (eg, oncology) or acquired specialty oncology practices to fill out niche markets.

The Great Divide

The divide has grown sharper between community-based private practices that are still standing and hospital-based centers with an expanding footprint of community located, but hospital-owned, practices. Hospitals may question the ability of stand-alone practices to provide truly comprehensive care for patients with cancer. Community-based practices and private payers have not been shy about noting the higher costs for cancer treatments in hospital-owned practice settings. Concerns often are raised about the same patient receiving the same care from the same doctor in a facility that was acquired by a hospital, and yet the patient may be billed at substantially higher rates by the hospital that acquired that practice than they were before the acquisition, thus increasing both patient and payer costs.

Is the care really the same in these environments, or is it different, and do the differences justify the costs? There may indeed be short-term and long-term answers to this not-so-simple question:

  • Hospitals by nature are subject to intense scrutiny and oversight, and probably have developed checklists and processes for reduction of variation and risk in provided care
  • Hospitals have certification and accreditation options not available to the general oncology practice, with detailed cross-disciplinary processes and operational standards that drive consistency and attention to quality
  • Hospitals, by design, have a wide range of departments and specialties, facilitating multidisciplinary programs and rounding, which increases joint attention to patients, the facilitation of both upstream and downstream consensus treatment decisions, and communication focused on the patient, potentially raising quality and outcomes
  • Hospitals have more overhead and are able to charge facility fees; they also often have different contract prices for reimbursement of line items (eg, cancer drugs), which explains why payers see increased prices for care when a private physician is acquired by a hospital
  • Private practices may be more flexible and able to focus more closely on patient attention and engagement without multiple departments and disparate facilities to separate care providers
  • Private practices may provide innovative, patient-focused services and schedules to accommodate patients in a local community setting
  • Private practices have less facility and staff overhead than hospital services, which could provide a more cost-efficient site for services
  • Value-based reimbursement is a moving target, and we do not yet know how these transformative years will play out in the future; we may need the protection of a widely diverse and robust organization to absorb financial risk and provide a cushion to healthcare providers under a fully value-­based system
  • As an alternative, we may need smaller, focused service models to expand and become flexible, aligned components of care within diverse settings, working together to balance care delivery in the right setting at the right time.

We now have states where the majority of cancer care providers are hospital-based, others that are still predominantly private, and some states where almost all private groups have been acquired. The acquisition fever that gripped some hospital systems seems to be abating somewhat. We have been left with a medical community that is divided even more so now than in days gone by, and that is not good for our physicians, cancer centers, or patients.

We are who we are, and we need not only to embrace and learn from our differences, but also to use our collective voices—private or hospital-based—to speak up for our patients in the face of changes being made to external policy and oncology management.

During my travels across the country, I have had the pleasure of visiting a wide variety of cancer centers and meeting the many groups who comprise the oncology providers of the United States. There are definitely different nuances and blends that work better in some markets than others. Sometimes the cards have already been dealt, and payers, physicians, and hospitals have to play them out as they stand. In other markets, there is greater fluidity to the physician–hospital mix, and payers, physicians, and hospitals have more of an opportunity to craft a final solution that works well in that area. There are even some markets that have, while watching and worrying, experienced little real change thus far.

The devil is definitely in the details. Like most diverse markets, there is clearly a bell curve shaking out, and there are good and not-as-good aspects to both private and hospital-­based options. There are many hospital-based programs that prominently exemplify the power of a deeply aligned, multidisciplinary entity that can leverage its resources for its patients. There are strong community and private programs that may—or may not—be enhanced by strategic affiliations rather than acquisitions, and still serve their patients in a comprehensive manner.

Privilege and Responsibility

When we lose sight of ourselves as a full medical community, we lose our voice to speak for our patients in the greater healthcare policy ­discussion. There is a common saying, “With great privilege comes great responsibility.” We are privileged with our ability to care for patients with cancer, whether that care is packaged in a private practice or a hospital-based cancer center. We also have an obligation to those patients to stand up for them and enter into the debate of “value”-based reimbursement and “evidence”-based care. If a proposed policy or program does not make sense, or needs to be tweaked to better serve the spirit of value and evidence rather than some other twist or interpretation, we need to engage and advocate for such changes. Unfortunately, if we are too busy battling each other within the medical community over site of service, we may lose the war with others over evidence-based oncology management.

There will still be opportunities to learn and shift site-of-service mixes in specific markets, and we should continue to review those opportunities, but we should also increase our efforts to work collectively with our local payers and purchasers on defining libraries of evidence, expectations for clinical pathways, utilization of external prior authorization portals and resultant utilization review, and definition of appropriate oncology management. These are common issues that can be addressed collaboratively between private and hospital-based medical providers, taking a stance on appropriate evidence and value standards, as well as measures within the treatment of patients with cancer.

Next Steps

Tomorrow when you wake up, pick up the phone and call your counterparts in your local market, no matter where they are based. Start a dialogue about setting the bar for clinical evidence and decision-­making in your market; even if you have different technology and service solutions, there often will be common end points. Each of you will report and deliver on those standards at different times and in different ways, but you will have collectively created the parameters within which you feel it is most appropriate to move forward. Then you can individually or collectively introduce these parameters to your employers and payers in the market, and begin more focused discussions on oncology management.

We are a diverse medical community, with changing delivery models. Together we can still be strong for our patients, and recognize the common threads of similar values and expectations for evidence, which will not vary because of our own diversity. There are advantages and disadvantages to any delivery model. Let us recognize the differences, embrace the good, and spend more time working together with our payers and purchasers to define evidence and value as we, the treating providers regardless of site of service, see as appropriate for our patients.