Medicare has proposed a 19% overall reimbursement cut for radiation oncology, contained in the proposed physician fee schedule for 2010, and the American Society for Radiation Oncology (ASTRO) responded by surveying members to determine how these cuts would affect physician practices and patient care. The results were sobering.
A total of 515 respondents participated in the survey, but in its report, ASTRO included only those responses from community-based and dual community-based and hospital-based practices.
While ASTRO calculated the aggregate hit at 19%, the survey revealed that some practices anticipate cuts of up to 31% due to patient mixes heavily skewed toward Medicare. Survey results suggested that the cuts would result in practices closing and could possibly instigate a wave of consolidations (see figure).
A total of 97% of respondents said that they believed the quality of radiation oncology would suffer as a result of these cuts. ASTRO cited studies1,2 that found that increased travel time to the nearest radiation facility is associated with declining odds of receiving radiation treatment, for elderly patients. The impact is anticipated to be particularly serious in rural areas: 27% of those practices looking at 20% Medicare cuts said that they would have to close; 47% of practices that anticipate a 30% reduction said that they would have to close their doors.
If the proposed cuts become reality, the effect is likely to be a wave of consolidation in the radiation-oncology market. As Vivek Kavadi, MD, medical director of radiation oncology for US Oncology (The Woodlands, Texas) observes, “Once the margins on any service get slashed to the point where you are actually losing money on some services, it doesn’t allow for smaller independent providers to provide comprehensive services. I think we will see further consolidation.”