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Is Federal Policy Really To Blame For The High Cost Of Cancer Care?

(Forbes) Feb 8, 2018 - Although cancer care is increasingly becoming hospital or health system based, merger mania in oncology is probably not driven primarily as a way for hospitals to gain access to discounted drugs. Broader forces are at play.

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Thomas Marsland, MD (Posted: February 08, 2018)

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There is a lot beneath the surface in this report. Clearly the major factor in the growth of hospital practices is the 340B program but it is clearly not the only factor. The point is that whether an institution participated before or after 2010, those 340B facilities have a definite competitive advantage over community private practice. Hospitals, whether 340B or not, also have a higher compensation for the exact same service provided under the OPPS compared to the physician fee schedule that private practices bill under. Many also charge a facility fee that private offices cannot. In addition to the expanded revenues afforded hospital centered practices, the bottom line revenues in private practices has deteriorated due to ASP and the multitude of new rules, regs, and other requirements foisted on private practice by the payer communities. The shrinking revenue in private practice has driven doctors to the hospital settings where doctor compensation may be better and there is less hassle with the day to day running of a practice. So as the author suggested it is not solely due to 340B issues that we are seeing the death of private practice but it surely is one of the major drivers. Will be interesting to see how the new reduced payments under the 340B program effect this migration.

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