Community Oncologists Have Number of Options in Responding to Managed Care

ORLANDO—Community oncologists have a number of options in attempting to maximize their position in the managed care environment, said Myron H. Goldsmith, MD, executive director of development for the City of Hope Oncology Network, Los Angeles.

But to make the choice, the physician must weigh a number of factors, including his or her age, type of practice, income needs and goals, autonomy and governance issues, geographic aspects, and practice philosophy (conservative or aggressive).

"It is also important to look at market issues, paying attention to what's happening in a particular area. Is the market saturated with oncologists, or are they scarce?" Dr. Goldsmith said. Finally, he noted, economic issues related to equity and risk must be examined.

Patients Stick With HMOs After Cancer Diagnosis

HMO memberships are soaring, and, surprisingly, many of these lower-cost health plans are especially attractive to cancer patients, Dr. Myron Goldsmith said in his Orlando presentation (see article).

According to a recent study conducted by the Office of Research and Demonstrations at the Health Care Financing Administration (HCFA), cancer patients are no more likely to leave their HMO than are healthy patients, he said.

In fact, after having their cancer diagnosed, patients are less likely to disenroll than are non-HMO plan members.

The study, Dr. Goldsmith noted, calls into question the conventional wisdom that sick patients are likely to leave HMOs and that key features of managed care plans make them unattractive to those who are seriously ill.

Speaking at a conference on managed oncology care organized by International Business Communications, Dr. Goldsmith outlined a number of possible strategies for the community oncologist:

Contracting with a managed care health plan (or plans)

• Contracting with a large local multispecialty medical group
  
• Merging a solo practice with a group practice
  
• Merging a small group into a larger group
  
• Forming local or regional single specialty IPAs (independent practice associations)
  
• Developing an alliance with a local hospital
  
• Joining a national, regional, or local specialty network

There is no one right choice. Each option has advantages and disadvantages, he said. For instance, the advantages of a PHO (physician hospital organization) are the joint contracting strength of the combination and the fact that physicians remain in control of their non-PHO-contracted patients.

On the other hand, doctors and hospitals often have different objectives regarding managed care (for example, filling hospital beds versus using outpatient alternatives). Differences related to control, utilization management, quality assurance, and provider selection can also arise, Dr. Goldsmith noted.

Multispecialty medical groups offer both primary and specialty physicians, which is a marketing advantage. However, payers must be willing to accept the cost and quality of all group physicians.

Groups also tend to be dominated by one particular specialty, and when contracts are terminated, there is a disruption in patient care, an aspect of special concern to oncologists and their patients because of the serious and emotional nature of the disease.

'Networks Are Hot'

One of the most active trends in oncology today involves the formation of networks. "Oncology networks are hot," Dr. Goldsmith said. Physicians who decide to affiliate with other oncologists can choose from among a variety of publicly-traded and non-publicly-traded networks, national, regional, or local.

There are also a number of what Dr. Goldsmith called hub-spoke models, in which community oncologists are aligned with tertiary cancer centers. Examples include the City of Hope Oncology Network and networks involving cancer centers such as Duke, Fox Chase, M.D. Anderson, and H. Lee Moffitt.

IPA or Equity Model?

Community oncologists who decide to join an oncology network need to weigh the pros and cons of the IPA versus the equity model. Both have benefits and liabilities, Dr. Goldsmith said, and the choice depends upon which model works best for an individual clinician.

For instance, an IPA offers a high level of physician autonomy and is relatively easy to establish. It also is less capital-intensive than an equity-model network, yet offers the opportunity to grow and develop market share quickly.

However, IPAs tend to have more difficulty keeping physicians in the network because of their lack of financial investment. This can also make it difficult to collect funding for high-cost expenditures. Finally, without a cohesive culture and group commitment, doctors may be less motivated to change their behavior to comply with practice guidelines.

An equity model, on the other hand, provides more structure and control for the network itself while demanding a higher level of integration, commitment, and risk-sharing from participating physicians. In this model, the physicians have less autonomy but more potential for network-generated earnings due to their financial investment in the network.

An equity model is often better at controlling costs and managing the overall system, Dr. Goldsmith said, and once it is established and operating successfully, an equity network can attract high caliber physicians, which ultimately benefits all participants.