Over the past 40 years, the global medical community has made significant strides in the war against cancer. More Americans with cancer face longer life expectancies as a result of increased awareness among at-risk populations, better preventative care, early screenings, and new therapies. Furthermore, when patients have access to quality cancer care the odds of survival are significantly increased. According to a report released recently by the American Association of Cancer Research, today Americans have more chances of survival and better quality of life after a cancer diagnosis than ever before.
However, despite significant progress in the war on cancer, unnecessary access barriers to quality cancer care permeate the system, with location serving as one defining factor. Many Americans in rural communities, in which 46 million people reside, must travel hundreds of miles in some cases to seek out cancer care. Unfortunately, cost also continues to be a barrier to care, especially for low-income individuals. As recently as 2012, over three in ten Americans reported forgoing medical treatment as a result of cost.
This consolidation of care is creating access to care issues, as 288 cancer clinics have closed over the past seven years, and higher costs for cancer patients as 469 community cancer practices have merged into hospitals. Studies by Milliman, Avalere Health, and The Moran Group have documented the higher cost of cancer care to patients, Medicare, and private insurers when cancer care is delivered in outpatient hospital facilities. Unfortunately, the decision by CMS to apply the sequester cut, which was created by Congress, to the underlying cost of cancer drugs is only fueling this cancer care crisis.
An unintended consequence of the MMA change to Medicare drug reimbursement has been the substantial growth of the 340B drug discount program among hospitals. The program, enacted by Congress in 1992 to help provide a financial safety net for patients who cannot afford to pay for prescription drugs, is now accessed by over one-third of U.S. hospitals. While community health clinics and similar safety net providers, who depend on the well-meaning 340B program to directly serve patients in need, are subject to a high level of transparency and accountability to qualify for the program, hospitals are not.
Under the current rules of the 340B program, hospitals realize up to 100 percent margins on cancer drugs, meaning Medicare and private insurers pay up to double the cost of these drugs. Patients paying out-of-pocket, or at least some portion, for these drugs do so at full price without receiving any discounts. Although some hospitals use 340B discounts to compensate for un-reimbursed charity care, the huge financial incentives of the program, without the proper transparency and accountability, provide a target for abuse.
Unfortunately, the huge profits from the 340B program are resulting in many hospitals aggressively trying to acquire community cancer clinics in order to reap larger profits from cancer drugs. This is further fueling cancer clinic closures, exacerbating the issues Americans are facing in easily accessing care, and increasing costs due to care being provided in large, more expensive hospital settings.
Hospitals using the 340B program as intended, and who truly depend on it to help needy patients at risk of falling through treatment cracks, should be front and center in reforming and strengthening the program. The 340B program is about a safety net for all patients in need, including cancer patients, and on its current course, it is unsustainable given the amount and increasing scope of discounts. Patients, especially those most in need, will be the ones who suffer when the program hits a brick wall — as it will. There needs to be more responsible dialogue about the program as well as greater transparency and accountability to sustain 340B for current and future generations of Americans.
The ongoing war on cancer deserves nothing less.
Okon is executive director of the Community Oncology Alliance.