A healthcare gem created just two decades ago, the National Cancer Institute-designated comprehensive cancer center, could lose its luster in the new managed-care environment.
"If the system is purely driven by cost, this entire national treasure of the National Cancer Institute-
designated comprehensive cancer centers will be for naught," said Tim Raftis, the Washington representative for the Association of American Cancer Institutes, which represents all NCI-designated cancer centers and 24 other NCI-certified cancer centers across the country.
Payers could look unfavorably at contracting with cancer centers in a managed-care atmosphere that forces providers to strive for less expensive ways of treating patients.
Centers flourishing. The National Cancer Act of 1971 allowed the establishment of new cancer centers through the National Cancer Institute Cancer Centers Program.
That program has flourished, with more than 50 NCI-designated cancer centers in operation, including 27 nationally known as "centers of excellence," providing patient care, research and community outreach. Most of these NCI-designated comprehensive cancer centers are located within academic medical centers or are stand-alone facilities.
Other NCI-designated facilities include: basic science cancer centers that engage almost entirely in research; clinical cancer centers that focus on basic and clinical research; and consortium cancer centers focusing on clinical and control research as well as cancer prevention.
Comprehensive cancer centers are exempt from the prospective payment system. Instead, they are reimbursed at a flat rate based on their historical costs. For example, Fox Chase Comprehensive Cancer Center in Philadelphia is reimbursed at a flat rate of $9,082 per discharge.
With managed care, third-party payers are deciding whether to contract with comprehensive cancer centers based on their price per discharge. "Insurers look at our per-diem cost, which is higher than community hospitals'," said Anthony Diasio, assistant treasurer at Fox Chase. "Our costs are more expensive because we have more sophisticated equipment."
But an emphasis on quality can be cost-effective, Mr. Diasio said. "We're in a better position to get it right the first time," he said.
Comprehensive cancer centers have advantages, though, because their specialized care and sophisticated equipment, not found at community hospitals, would "get patients in and out quicker," Mr. Diasio said.
To maintain their clinical trials, the NCI-designated comprehensive cancer centers need to maintain access to a broad patient base.
"One of the big differences with us is that many of our patients are self-referred-they come on their own," said Jay McKay, executive vice president at Fox Chase. "The notion that we have to do something to survive is foreign to us."
Adding partners. Fox Chase also is using partnerships with community hospitals to stay competitive.
Launched in 1986, Fox Chase has affiliated with a dozen community hospitals in Pennsylvania and New Jersey. The affiliations with community hospitals allow Fox Chase to be the first choice for tertiary referrals and enables the cancer center to conduct clinical research on a wider basis.
Since the network was developed, Fox Chase's operating revenues increased to $53.3 million in 1992 from $21.9 million in 1986. Meanwhile, operating expenses also mushroomed to $52.2 million in 1992 from $22.2 million in 1986.
The Fox Chase Network Hospitals stretch from Philadelphia 100 miles northwest to Harrisburg, Pa., and throughout New Jersey.
Mr. McKay said the network contributed to a doubling in the number of Fox Chase's inpatient numbers to 4,000 last year from 2,000 per year in 1985. During those same years, the number of outpatients increased to 42,000 from 20,000.
Meanwhile, because of the shift to outpatient care, the average length of stay dropped to 5.5 days from 9.5 days.
"It improves the oncology program in an entire region," Mr. McKay said. "We're improving what's there, but we're not causing competition (with the hospital)."
Their own PPO. Managed care requires more than referrals in a regional market. With Fox Chase's regional network as a start, Mr. McKay said Fox Chase is working with other NCI-designated comprehensive cancer centers to form a national PPO.
They hope eventually to form a managed-care product that large employers, HMOs and insurers will be interested in, Mr. McKay said. However, the NCI-comprehensive cancer centers' national PPO is still in its formative stages, and Mr. McKay couldn't discuss specifics. The name and date for launching the PPO hasn't been determined.
Meanwhile, another oncology PPO also is in the works. Atlanta-based Preferred Oncology Networks of America is developing a similar network using some but not all NCI-designated cancer centers. "It'll be a fully integrated product that is fully capitated," said Jim Kenworthy, PONA's chief operating officer.
Analysts say an NCI comprehensive cancer center network can be successful, but it could run up against some tough obstacles.
"It has to break down some traditional barriers like the physicians' old-boy network," said Kirk Stapleton, president of United Resource Networks, a division of Minneapolis-based United HealthCare.
United Resource Networks has been providing access to expensive "centers of excellence"-type healthcare services like kidney, heart and bone marrow transplants for the past five years. They contract with some 20 academic medical centers across the country.
Mr. Stapleton said the cancer centers' PPO has to offer insurers, HMOs and probably larger self-insured employers incentives to take the product or patients will only "go to the cancer center as they normally would," Mr. Stapleton said.
"It's not like the Field of Dreams, and if you build it they will come," Mr. Stapleton added. "If they have 20% of the market in a town and they discount with fees or bill charges, then they are cannibalizing their product. They (NCI-designated comprehensive cancer centers) have spectacular credentials and they have the best product potential, but part of the buyer's paranoia is that their effort is provider-driven."