How will bundled payments affect Rad Onc

[doctorspeed]

Hi Guys!

MS4 going into Rad Onc and taking a health policy class right now. Attended some conferences and it seems the general consensus among politicians and health economists is that a bundled payment system will replace fee for service inevitably at some point. Whether this is 2 years or 10 years or ever going to happen, who knows. How do you guys think this would impact Rad Onc? If you think less free-standing centers, how will they get around anti-trust which is now being looked at on specialty by specialty basis in M&As? Will patient care suffer? How much will physician reimbursement change? Etc.

Thanks in advance for your opinions!

---

Members don't see this ad.

 

[medgator]

Hard to say. It's been discussed previously

http://forums.studentdoctor.net/thr...n-hospital-and-free-standing-centers.1073032/

http://forums.studentdoctor.net/threads/red-journal-alternatives-to-fee-for-service.1090988/

 

[domestique]

I agree with the previous poster that it is hard to say precisely what will happen. However, some effects are clear. There will be much less variation in the cost of radiation therapy in the setting of bundled payments. In the current fee for service paradigm, the cost of radiation therapy to society (i.e. what Medicare pays) varies tremendously with geography and by billing provider. Interestingly, this variation does not seem to translate into better outcomes or lower toxicity for the most common disease sites (breast, lung, prostate). There will be more on this in the coming months as some fairly high profile analyses are published in high profile places. CMS already knows this from their own internal analyses. They refer to them in their MedPAC white papers and in other places. Of course they don't publish the full details though.

Less variation in cost to society and practice revenue is one obvious thing. However, the overall effect on the level of revenue for a course of radiation therapy is less clear. ASTRO, ACRO and associated lobbyists will have to play a very active role to help CMS get prices "right."

In general, it's fairly predictable that larger practices will do better in a case rate/bundled payment environment because larger players can spread fixed costs, especially cost of regulatory compliance and CAPX, over more revenue generating assets and billing providers. In addition, larger players, especially the branded players, will continue to have more leverage to negotiate favorable case rates and carve outs with commercial payers.

Regarding the timeline for bundled payments in rad onc, my understanding is that CMS is shooting for ~ 2020. If you ask Varian, they will tell you this too.

Regarding M&A, all signs point to this trend continuing at a healthy pace. There are no credible signs that there will be significant anti-trust activity blocking acquisitions of individual radiation oncologist practices. I understand why you are asking. There has been recent news about hospital system acquisitions being shut down (i.e. in Mass). More interestingly and more imminent is that one of the major players of radiation oncology free-standing private practice acquisitions is in significant financial difficulty. Despite a recent infusion of cash from a non US investor, they are still heavily levered and this will limit their ability to acquire at the same pace. Others are waiting to take their place though.