Will Radiation Oncology go the nephrology way?

[Barcelona PSG]

Will Radiation Oncology go the nephrology way?
Given the current trends in private practices being bought out either by academic hospitals or oncology groups like Genesis care, is Radiation oncology the next nephrology in waiting?

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[elementaryschooleconomics]

Will Radiation Oncology go the nephrology way?
Given the current trends in private practices being bought out either by academic hospitals or oncology groups like Genesis care, is Radiation oncology the next nephrology in waiting?

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Oh - I don't think is going to happen, I think this has already happened.

That data was published 5 years ago. There has been significant, continued consolidation/affiliation since then. These terms no longer have much meaning - "academic" vs "nonacademic" vs "private practice".

It's: the system, the "Academic Health System".

If I had to guess, I would say >70% of practices are, in some way, part of an "Academic Health System" in 2022.

 

[Palex80]

COVID-19 impacted the dialysis industry as well.
At first, lot's of frail patients on dialysis died because of COVID, and some still are, albeit at lower rates due to vaccines.
Fresenius had to cut thousand of jobs.

Fresenius Medical Care to Cut Up to 5,000 Jobs on Covid Toll

Fresenius Medical Care AG plans to eliminate as many as 5,000 full-time positions as patient deaths from Covid-19 reduce the German kidney dialysis company’s revenue prospects.

www.bloomberg.com

But now, there are more and more COVID-survivors with vascular damage and renal impairment that require dialysis.

The industry took a hit first, but was presented with a new opportunity later on.

 

[wandering star]

I listened to the podcast in question several months ago and it was indeed fascinating. Keep in mind that Freakonomics targets college-educated working professionals and its MO is to present an interesting case study, state a few Econ 101 buzzwords like "oligopoly" or "supply side forces," and do a short explainer about how it is relevant to market dynamics.

In my opinion the comparison between dialysis and rad onc is a stretch. The hallmark of this episode was alleged corruption by the duopoly of DaVita and Fresnius, where "corruption" here means prescription of inappropriate care, setup of "foundations" that funnel more money back to the company, etc. In rad onc, there is a lot of consolidation, but this trend is common across all of medicine today.

If an academic hospital were to consolidate or acquire private practice, the expectation is that care patterns remain similar or that reduced fractionation would be used, so in that sense there is better alignment to patient goals. Overall cost to the insurer may not drop because of additional overhead and higher costs, which is also important but a separate (possibly less "corrupt") dynamic.

Consolidation has been talked about in other episodes of this podcast as well as its sister podcast, Freakonomics MD. It has been linked to increases in prices, and usually not improvements in outcomes. Freakonomics, following their MO, attributes this to better bargaining power that results from regional consolidation and local monopolies that result. Freakonomics MD has pointed out that there is limited patient information, saying that even for basic labs or for CT/MR scans, where we feel that the quality is generally interchangeable, regional price variation is large and patients have no capacity/knowledge to shop around to reduce their own costs.

 

[elementaryschooleconomics]

In my opinion the comparison between dialysis and rad onc is a stretch. The hallmark of this episode was alleged corruption by the duopoly of DaVita and Fresnius, where "corruption" here means prescription of inappropriate care, setup of "foundations" that funnel more money back to the company, etc. In rad onc, there is a lot of consolidation, but this trend is common across all of medicine today.

If an academic hospital were to consolidate or acquire private practice, the expectation is that care patterns remain similar or that reduced fractionation would be used, so in that sense there is better alignment to patient goals. Overall cost to the insurer may not drop because of additional overhead and higher costs, which is also important but a separate (possibly less "corrupt") dynamic.

Completely agree.

I think the 1:1 analogy of RadOnc to Dialysis is a stretch, but mostly because I think what is happening in this country has never happened before, and we have no real analogy.

It's basically all about captive markets and regulations:

- people are always going to get sick and need medical care
- there are extensive laws/regulations around who can provide medical care
- there are both federal and state laws, state laws vary tremendously
- credentialing and privileging and highly variable between hospitals/institutions as well, even within the same state
- the invention and proliferation of healthcare insurance opened up a commercial path
- tying healthcare to employment was a neat trick
- the "academic health system" model is creating juggernaut organizations never seen before (oligopoly)
- simultaneously, the health insurance industry has also consolidated into juggernaut organizations

There are RadOnc-specific issues that make this particularly "hurtful" to us as individual people with careers and families, but the issues are significantly bigger than us.

I don't know what's going to happen. Doesn't seem like we're (as like, a society) cruising towards a place we're going to enjoy.

Guess we'll find out together.

 

[wandering star]

- tying healthcare to employment was a neat trick

Also covered on a separate episode of Freakonomics is that healthcare is subsidized by the tax system.

The government allows you to pay with pre-tax dollars (like mortgage interest, or retirement savings) only in a limited number of cases and when it thinks that there is a social benefit, like the stability of home ownership. Even in these cases the tax advantage is muted (in a 401k, the tax penalty is deferred and not eliminated; for a mortgage, only the interest is deductible).

Healthcare insurance is in the same category. When employers pay for health insurance they do so with pre-tax dollars. If we had to pay with post-tax dollars the cost would be a lot higher, and basic supply and demand would predict that people would buy less health insurance if they had to pay out of pocket, post-tax, for it.

 

[elementaryschooleconomics]

Also covered on a separate episode of Freakonomics is that healthcare is subsidized by the tax system.

The government allows you to pay with pre-tax dollars (like mortgage interest, or retirement savings) only in a limited number of cases and when it thinks that there is a social benefit, like the stability of home ownership. Even in these cases the tax advantage is muted (in a 401k, the tax penalty is deferred and not eliminated; for a mortgage, only the interest is deductible).

Healthcare insurance is in the same category. When employers pay for health insurance they do so with pre-tax dollars. If we had to pay with post-tax dollars the cost would be a lot higher, and basic supply and demand would predict that people would buy less health insurance if they had to pay out of pocket, post-tax, for it.

Oh yes, I am very familiar with that episode, haha.

Now I can't remember if this was also covered by Freakonomics or a different entity, but "back in the day" there used to be a cap on CEO pay, essentially. I'm going to absolutely butcher this because it's been so long since I was reading about it, but as I recall, because you could only pay executives a certain amount of salary, eventually it was realized (as health insurance as an industry grew) that offering health insurance as part of the employment package was a benefit to attract talent.

However, the cap on executive pay was removed (I can't remember when, I'm almost certain it was the illustrious Ronald Reagan, who is directly responsible for the America we live in today, but that's another topic for another time), and yadda yadda yadda, now health insurance is touted as a $50,000 a year "benefit" for a single employee with a $10,000 a year deductible. America!

I have heard the "pre-tax argument" used as a "the system is good" sort of thing (I am not saying you are giving an opinion either way on that, to be clear lol - this is just something I have heard from other people in other settings). It's true that it's better to have it be pre-tax vs post-tax, but I would rather like, have some other "system overhauls" than be hype about the pre-tax "benefit".

I know the vultures who will descend on these topics, this is the internet and an anonymous message board of all things. I don't mean to bring these points up to start Troll Wars 2022.

I bring them up so maybe someone will read these posts and think about "do we have to have this system forever"? Because it wasn't like this 50 years ago, and it doesn't have to be like this 50 years from now. We definitely could have a worse system, for sure, but I definitely don't think we have perfected the system now.