A recent study that claims cancer care is more expensive because hospitals are employing more physicians is misleading and does not consider all of the facts.
The study had several problematic areas. While it accounts for changes in the general rate of inflation, there is no indication that the authors accounted for the dramatic increases in the price of cancer and other drugs that have been noted in Congressional hearings, on the campaign trail and by plans and consumers. In addition, hospitals, by virtue of their participation in research and teaching, have better knowledge of and access to the newest, most effective drugs which often are more likely to be under patent and come at a higher price. The study also fails to consider whether patient outcomes are better when they get the higher level of care and different types of drugs provided in the hospital or hospital-affiliated setting.
Hospital-based clinics provide services not otherwise available in the community to vulnerable patient populations. AHA released a report in late 2014 showing patients who receive cancer care in a hospital outpatient department (HOPD) tend to be from areas with lower household income and higher rates of poverty; are self-pay, charity care or on Medicaid; have more severe chronic conditions, in terms of their effect on mortality; and are black or Hispanic.
Hospitals also care for sicker patient populations. Community physicians often refer patients who are too sick or medically complex for physician offices to HOPDs for safety reasons as hospitals are better equipped to handle complications and emergencies. That same study noted previously showed the care they receive in a HOPD is more likely to be for the receipt of treatment; more likely to be for a new problem for the flare-up of a chronic problem; likely to include the provision or ordering of more treatments and services; and more likely to include a care from a nurse.
Hospitals and their outpatient departments are also subject to higher levels of oversight than free-standing physician offices. This includes providing care for everyone, regardless of their ability to pay; more complex licensing and regulations; among others. While many of these requirements help to ensure a higher level of quality and patient safety, they all impose additional costs.
Comparing the cost of care in stand-alone physician offices and those affiliated with hospitals and health systems is comparing apples to oranges. They are two different types of facilities with two sets of rules.