Community Oncologists Balk at Home Chemo's Financial Effects

Lola Butcher

March 23, 2021

This is part 3 of a 3-part series. Part 1 is here. Part 2 is here.

If providing cancer therapies at home means handing off patients to a home-infusion company, Tennessee Oncology wants no part of it. The Nashville-based practice, one of the largest community-based practices in the country, is built on a business model that includes providing cancer drugs in its own infusion centers. The practice has grown to more than 150 oncologists and advanced practice providers.

"If that's a business that you're in and somebody else takes it over, you don't have a business," said Jeffrey Patton, MD, executive chairman for the practice.

Nevertheless, the practice of giving cancer patients their drug treatments at home is increasing.

Across the country in Utah, Derrick Haslem, MD, is associate medical director of the oncology clinical program at Intermountain Healthcare, a 24-hospital system serving Utah, Idaho, and Nevada. Intermountain is working on two home-infusion pilot projects that, in his view, point to the future.

"I personally think that, the way things are going, this will be the way cancer care is delivered," Haslem said.

From a business perspective, the emergence of cancer-therapy-at-home programs is only the latest skirmish in a long-running battle over where cancer treatments should be delivered. Until now, the two choices have been hospital outpatient departments or physician-owned oncology practices; if a patient's home becomes a third alternative, a new entity — home-infusion pharmacies — could compete for important revenue.

Cancer care at home could be a boon for health systems that own home-infusion companies, but it would challenge most physician-owned practices.

"People will care about that very much, depending upon the business model under which they work," said Randall A. Oyer, MD, president of the Association of Community Cancer Centers, a professional organization. "I don't know anybody who provides oncology care just to make money, but there are businesses that depend upon being reimbursed for patient care for survival."

The Traditional Business Model of Cancer Care

Unlike many other specialties, oncologists rely on drug transactions as the lifeblood of their practice. Cancer drug administration accounts for about two thirds of oncologists' Medicare revenue and about half of their revenue from commercial insurers.

Traditionally, most cancer treatment infusions were administered in physician-owned outpatient clinics, often referred to as community oncology practices. But that is changing. In the early 2000s, those practices administered 85% of all chemotherapy; now it's down to about half, Patton says. As of 2017, hospitals and health systems owned 54% of all oncology practices, up from just 20% in 2007. Indeed, 722 oncology practices were acquired by or contracted to hospitals and health systems between 2008 and 2020, according to the Community Oncology Alliance.

That trend toward hospital ownership has been fueled by relentless pressure on independent oncology practices to survive in the "buy-and-bill" business model. Under this system, a practice buys drugs at one price and is reimbursed by payers at a higher price when they are given to patients. Historically, the profit — typically referred to as "margin" — on those drug transactions was sufficient to sustain community practices, but decreasing margins and increasing practice expenses have made that more and more difficult.

Hospitals and health systems that provide infused and injectable drugs for cancer patients in their outpatient clinics have some advantages compared with community practices. About half of hospitals buy drugs at deep discounts through the federal 340B drug program and most can negotiate higher reimbursement rates from commercial insurers. That gives them the financial wherewithal to acquire practices from oncologists who can no longer survive independently.

A New Threat to Community Oncology Practices

Home infusion of cancer drugs may present another opportunity for hospitals and health systems — and yet another threat to physician-owned community practices. That is because health systems that own home-infusion services have the staff and infrastructure in place to deliver drugs in their patients' homes, thereby retaining the profits they make on drug transactions. Community practices do not.

Robert "Bo" Gamble, director of strategic practice initiatives for the Community Oncology Alliance, says community practices could, theoretically ,gear up to provide home infusions, but the thin margins they get for drugs would not support the extra expenses that would be required.

"Financially, it would not make any sense whatsoever," he says.

Alternatively, an oncologist could prescribe a patient's drug regimen but leave all aspects of buying and administering drugs to a home infusion provider. In that scenario, the community oncology practice would lose out entirely on the margin from a buy-and-bill transaction.

"I shiver at the thought," Gamble said.

Payers Push for Lower Cost

Intermountain Healthcare was gearing up for its cancer-care-at-home pilot earlier this year when Haslem was surprised to learn that an insurance company was mandating at-home infusion.

"One of our financial navigators told me, 'Mrs Smith's insurance company is demanding that her immunotherapy be given at her home,'" he says. "They just sent the drug to the patient and the nurses were supposed to go out there and infuse it into the patient."

Haslem was disturbed by the lack of coordination between the patient's oncology team and the insurer, saying, "It was a real mess." But the experience confirmed his thinking that payers are interested in home infusion.

As of November 1, 2020, the nation's largest commercial insurer, UnitedHealthcare, is piloting an oncology home infusion program in Florida to encourage its members being treated for cancer to consider home infusion for cetuximab, rituximab, bevacizumab, and several other monoclonal antibodies, proteasome inhibitors, and checkpoint inhibitors. Members are not required to choose home infusion, but they are receiving phone calls to notify them of the option.

Payers are motivated by rapidly increasing drug costs, particularly for immunotherapy and other specialty drug infusions. Per capita spending on infusion therapies has grown an average of 14% a year since 2013.

"Employers and payers...are nudging employees to receive administered drugs in lower-cost ways, including in their homes," according to a report by PwC's Health Research Institute. "The cost of infusion and intravenous medications in the home setting is lower than in a medical office or hospital outpatient center. There is an overwhelming opportunity to realize savings."

Optum, a health services business, reported in 2020 that hospital-based infusion of specialty drugs is 139% more expensive than home infusion and 63% more expensive than infusion in a physician practice. That analysis was for specialty medications overall, not specifically those used to treat cancer.

Patton disputes the idea that home infusion for cancer drugs will automatically save money for insurers.

"Certainly if I'm a payer, I'm trying to push every one of my insured patients out of a hospital setting," he says. "I would suggest they push them to a community setting right now because we think we can do it as inexpensively as they can do it at home."

The Home-Infusion Innovators

The oncologists at the forefront of cancer care at home are employed by health systems. Intermountain is a sprawling and fast-growing nonprofit system affiliated with an insurance company — SelectHealth — that covers at least 25% of Intermountain's patients. Penn Medicine, another center pioneering at-home cancer drug treatments, is the six-hospital academic medical center affiliated with the University of Pennsylvania.

Intermountain is conducting one pilot to test the feasibility of providing immunotherapy at home and another to investigate the potential for chemotherapy at home. The chemotherapy pilot is limited to injections and infusions that have a low incidence of adverse reactions, making them appropriate for in-home administration by oncology-certified nurses, Haslem says. Both programs, still in their early stages, seek to enroll 100 patients.

In both cases, Intermountain's oncology division is partnering with SelectHealth and the health system's in-house infusion services. The pilots are possible, Haslem says, because all three entities have the same ownership and initially only patients with SelectHealth insurance will be enrolled.

"That allowed us to jump into this, whereas we would have had major obstacles to try to do this outside of a closed group," he said.

The purpose of the pilot is to work out the logistics of home infusion, including ownership of the drug at various steps in the process.

"When drugs are mixed in the pharmacy and taken by a home health person out to the home, who owns the drug: the home health company, the pharmacy, or the patient?" Haslem asks. "We'll learn from this where there are potential pitfalls that need to be addressed before rolling this out to other payers."

Cancer treatment at home is in keeping with other Intermountain initiatives to push care closer to patients through hospital-at-home programs.

"We are constantly going to feel pressure to make it more convenient for the [patient]," Haslem says. "I think the idea of people having to come in to a [major cancer] center is going to be a thing of the past."

At Penn Medicine, home infusion has become the standard of care for leuprolide, an injection to treat breast and prostate cancer, and EPOCH, a complex multidrug regimen for treatment of aggressive non-Hodgkin lymphoma. Oncologists are working with Penn Home Infusion Therapy to deliver several other cancer therapies at home. Justin Bekelman, MD, director of the Penn Center for Cancer Care Innovation, believes that up to 10%-20% of cancer patients may be eligible for home treatment in the future.

For that to happen, however, payers will have to find ways to incentivize oncologists to choose home infusion, Bekelman said. For the time being, Bekelman thinks private insurers and the Centers for Medicare & Medicaid Services should pay the same rates for care, regardless of where it is delivered, until the costs associated with home infusions are better understood.

"If costs are found to be lower, then the price can be set lower over time," he said. "It's not practical to start by setting the price low early on because then health systems won't be incentivized to deliver care at home."

Beyond that, home infusion of cancer drugs will only fly if insurance benefits are designed to make home infusion a financially feasible option for patients, Bekelman says. Some Penn Medicine patients learned that copays for home infusion of pembrolizumab would be $3000 or more per infusion, compared with $35 or less in the hospital outpatient department, according to Penn Medicine medical oncologist Roger Cohen, MD.

"This was just simply out of the question for nearly all of my patients, for obvious reasons," he says. "A lot of patients were disappointed."

The View From Community Oncologists

Kathy Oubre, chief operations officer for Pontchartrain Cancer Center in Covington, Louisiana, knows that her practice — one physician and three nurse practitioners — is part of a "dwindling breed," but she is unfazed by talk of a home-infusion trend for cancer care. Neither patients nor payers have indicated any interest in cancer treatment at home.

"We're not seeing it," she says.

And if she does, she'll fight it through community oncology's formidable advocacy network. In just one example, she worked with other advocates in 2017 to protest UnitedHealthcare's policy that high-dose ipilimumab be infused at home in some cases.

"We wrote letters, gave interviews, wrote articles, and, collectively as a grassroots effort, we were able to get that policy rescinded," she says.

Oubre opposes home infusion for safety reasons but acknowledges that moving infusions out of the clinic would damage the practice's business model.

"Even though our margins have thinned, we do still rely on our drug-infusion profits, and that would take away that entire piece," she said.

At the other end of the community oncology spectrum lies Texas Oncology, comprising 490 physicians practicing in 221 locations across the state. But even a practice of that size is not positioned to deliver chemotherapy infusions at patients' homes, said executive vice president Debra Patt, MD, PhD, MBA. For one thing, staff would need to be trained to provide chemotherapy infusions in patients' homes.

"Supervision is required not only for it to be a billable service, but also for the safety of patients," she says. "Would doctors be there onsite? I'm not entirely certain how that could work."

In addition to his role at Tennessee Oncology, Patton serves as CEO for OneOncology, a nationwide practice management company created to help preserve community oncology as a viable business. Most OneOncology practices are large enough that they could partner with or acquire a home health agency to support home infusions if they were paid adequately to do so, he says.

"We could provide services at home that we would control and we would still buy and bill, so that wouldn't be disruptive to us," he said. "But I'm not sure there's enough savings [for payers] to justify pushing in that direction."

Community oncology practices can fight off threats to their business model if they have sufficient market share so that payers must contract with them on terms that will sustain them financially, Patton said. If home infusions for cancer care gain traction, the survival strategy for physician-owned practices is to be among the biggest practices in their markets.

"The day of — and I mean this affectionately — mom-and-pop practices is past," he said. "So I would find like-minded practitioners in my area and I would consolidate."

Oyer, the Association of Community Cancer Centers president, is the medical director of the Ann B. Barshinger Cancer Institute at Lancaster General Health, which is part of Penn Medicine. He predicts a slow build for home infusions.

"I think that there can be a small segment of patients and treatments that can be done safely at home," he says. "But there's going to need to be an enormous system that's built around this: communication, chain of custody for drugs, training for people who work in the community to do chemotherapy. Even if this works, it's not going to be everyone."

This article is part of a series on at-home cancer treatments, including coverage of patient safety, at-home cancer care in Europe and around the world, and a documentary video series showing cancer treatments given to patients at home.

Lola Butcher is an award-winning science and healthcare journalist based in Springfield, Missouri. Her work has also appeared Knowable Magazine, UNDARK, and Emergency Medicine News.

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