Managed Care May Hold Opportunities for Oncology Practices

June 1, 1995

WASHINGTON--Managed care holds tremendous opportunities for oncologists who are able to restructure their practices to meet the challenge, Merrick Reese, MD, said at the Association of Community Cancer Centers (ACCC) meeting.

WASHINGTON--Managed care holds tremendous opportunities for oncologistswho are able to restructure their practices to meet the challenge,Merrick Reese, MD, said at the Association of Community CancerCenters (ACCC) meeting.

Dr. Reese, of Physician Reliance Network, a Texas-based oncologypractice management company, believes that the aim of oncologypractices should be cancer management, in which care is providedfrom the time of diagnosis, through active treatment and follow-up,and ending with the patient's re-entry into primary care.

In such a system, the oncologist becomes the gatekeeper, in effect,the primary care physician, for the cancer patient, which eliminatesbarriers to referral and avoids fragmentation of care, he said.

Such a strategy means forming multispecialty physician networksand bundling all the services the cancer patient requires intoone entity for purposes of contracting with plans seeking to "carveout" their oncology services.

Such contracts could include all the medical oncology inpatientand outpatient services, pharmacy and diagnostic services, radiationtherapy and professional technical services, and all hospitaldays not related to surgery, although he expects oncologists eventuallyto be able to include the cost of surgery in their capitationrates.

He also warned that if oncologists don't take the lead in formingcancer management groups, they may be left behind, as psychiatristswere when investors and psychologists joined together to providesubstance abuse management and mental health services to managedcare plans.

Dr. Reese believes that such integrated physician networks willalso play a major role in clinical trial management. For example,the Physician Reliance Network was asked by a major pharmaceuticalcompany to provide 25 patients for a trial within 6 months, andwas able to provide 50 patients in 4 weeks. "I think thatreally got their attention," he said.

In another ACCC presentation, Brian Campbell, formerly of CaremarkInc., Schaumburg, Ill, emphasized that physicians must know thecost of providing care to be able to compete as the market movestoward capitation. He advised physician groups to seek actuarialhelp in developing their pricing structures.

Mr. Campbell believes, like Dr. Reese, that the carve out of cancerservices should begin at the screening and diagnostic stages andgo all the way through follow-up and long-term care. But the health-careproviders must have incentives to take on such long-term risk,such as longer contracts. "If you're going to do long-termfollow-up care of cancer patients, you need to know that you'llbe able to work with these patients over a period of 3 to 5 years,"he said.

Mr. Campbell pointed out that in the first year of such a contract,the oncol-ogists will be dealing only with new cases. "Inyear 2, you're dealing with new cases plus your ongoing casesfrom year 1, and so on into years 3, 4, and 5. If you're not projectingin this cost properly, you're going to bleed red ink."

To make such a contract work, Mr. Campbell stressed the need forcase management, that is, the use of a professional overseer foreach patient, who ensures that the physicians adhere to treatmentprotocols and guidelines.

Mr. Campbell also noted that when physician groups contract withmore than one plan or also have fee-for-service patients, treatmentmust be the same for all patients. Otherwise, you can create "schizophrenia"in your practice, he said. "There has to be a commitmentto use the same resources on every patient regardless of insurancecoverage."

Baby Boomers Enter the Cancer Risk Years

In his presentation at the ACCC meeting, Dr. Reese predicted asurge in cancer patients in the future as the population ages."The first baby boomer just reached age 50 last year,"he said, "and over the next 5 to 10 years, this huge bolusof people will enter the age at which cancer rates increase dramatically."

He also noted that cancer patients are living longer and requiringlonger follow-up, leading to an increased need for oncologic services.

"My patients say they don't want the oncologist to quit followingthem until they're 'cured,' and to them that may not mean 5 years,but rather as long as they continue to worry about the cancer,"Dr. Reese said.

As new molecular techniques are brought to the clinic, he said,"there's going to be a huge influx of very complex patientswho are going to require new and different kinds of therapy,"further enhancing the opportunities for the skilled oncologist.