The oncologist who practices privately is quietly going extinct. According to figures cited in an NYT profile, 544 of the 1,447 private oncology practices in existence in 2008 have since been absorbed by or allied with hospitals. Of those who did not affiliate with hospitals, 313 went out of business and 395 are not in good financial shape. The death of private practices represents a loss for the consumer:
When a doctor is affiliated with a hospital, though, patients end up paying, out of pocket, an average $134 more per dose for the most commonly used cancer drugs, according to a report by IMS Health, a health care information company. And, the report notes, many cancer patients receive multiple drugs.
“Say there was a Costco that had very good things at reasonable prices,” said Dr. Barry Brooks, a Dallas oncologist in private practice. “Then a Neiman Marcus comes in and changes the sign on the door and starts billing twice as much for the same things.” That, he said, is what is happening in oncology.
The article makes clear there is not an easy solution to this problem. Doctors who throw their lot in with hospitals, especially in the oncology field, do so out of financial necessity. Hospitals assert that they need to charge more not only to turn a profit but also to provide services private practices can’t, like staying open 24 hours a day and caring for low-reimbursement patients in Medicaid. Still, hospitals charge more for drugs than private doctors do even though federal programs make it cheaper for some hospitals to purchase those drugs: they are paying less for them and charging more. And the article suggests that the Affordable Care Act is accelerating these trends because its provisions encourage consolidation.
All of these factors together make for a messy situation, where the only certainty appears to be that health care is getting more expensive. These are the kind of policy knots that we should spend much more time discussing than we do, because it will be impossible to sustain our health care system unless costs come down. Instead, the ACA has led us down the wrong alley, in which universal coverage, not cost, is king. If you control costs, expanding coverage becomes easier. But if you expand coverage without controlling costs, the underlying dysfunctions will continue to drive unwanted trends—like hospitals eating up private practices. Those, in turn, will continue to put actual care further and further beyond people’s financial reach.