How a Northwestern Practice Gained by Accepting Patients of All Means

Jason Call, MD

Research shows that market dominance can improve revenue margins, but Cancer Care Northwest (CCNW) demonstrates that it can also benefit patients in sparsely populated areas.

Four decades ago when CCNW was one of more than a dozen cancer care providers in eastern Washington state, none of the regional independents was large enough to provide a comprehensive range of treatments, so patients with unusual tumor types often needed to drive more than 4 hours west for care, over the Cascade Range, to one of the Seattle area’s large hospitals.

Since then, CCNW has increased its market share in eastern Washington to more than 75% and achieved similar dominance in northern Idaho and part of western Montana. That patient volume supports 12 medical oncologists, 8 oncologists, 8 radiation oncologists and 7 surgical oncologists—many of whom specialize in particular tumor types. Together, they can provide patients with every mainstream cancer treatment except proton beam therapy and autologous stem cell transfer, all in a region where the largest city has just over 200,000 residents.

“We still bleed a few patients over to the west side [of the Cascades], but not many. There simply isn’t much they can do in Seattle that we can’t do here. Not only do we offer all the treatments, we also get the patient numbers we need to develop expertise in providing those treatments,” said practice president Jason Call, MD, a radiation oncologist who treats patients at CCNW’s North Spokane Clinic.

The practice that is now CCNW began operations in 1975, when a single medical oncologist named Turner Woods hung his shingle in Spokane, Washington. Woods took on a handful of partners over the following decade, all of them medical oncologists, and then joined the organization that became US Oncology, a Texas-based company that provides management and back-office services to cancer practices. It was during those years that the practice consciously decided to become a comprehensive cancer care provider. It first added 3 radiation oncologists and its first linear accelerator. A few years after that, it added a surgical oncologist and the gynecological oncologist, both of whom had been operating in independent practice in Spokane.

About a decade ago, the partners in the practice decided they could improve their business by becoming truly independent, so they left US Oncology and hired Warren Benincosa, MPH, to run the operation. However, Benincosa’s tenure as CEO nearly turned out to be very brief. Soon after he arrived, hospital chains around the country began snapping up independent oncology practices and the 2 local chains reached out to CCNW and expressed a strong interest in purchasing the practice.

After 14 months of negotiations, Providence Health and Services and Community Health System both came through with serious offers, but the partners ultimately decided against selling. Their analysis of the market suggested they could become the region’s dominant cancer care provider without backing from any hospital. Their strategy: help the practice by helping all types of patients. During the US Oncology years, CCNW used a complicated algorithm for ensuring that treatment of patients without adequate insurance was kept to a minimum. The US Oncology algorithm was so conservative that the practice turned away a substantial percentage of potential patients. This engendered ill will and ended up hurting the bottom line.

“One of the first phone calls I received when I came to work here was from a primary care physician who said he would never refer another patient to us. He wanted to partner with oncologists who would care for all of his patients, so if we wouldn’t take the poorly insured patients, then we weren’t going to get the well-insured ones either,” Benincosa said.

“Shortly after I reported the conversation,” Benincosa added, “the partners decided on a fundamentally different approach. We have since gotten the algorithm down to a single question: do we treat this patient’s condition? If the answer is yes, we accept the patient, regardless of ability to pay. There was some concern initially that such a policy could bankrupt the practice, but extra business from well-insured patients has offset extra business from uninsured patients, and we are thriving financially.”

Because patients who don’t have appropriate insurance can constitute a drain on practice finances, CCNW employs financial navigators who work to obtain government assistance, charity care, and drug subsidies that bridge the gap between what patients can and can’t afford. These counselors cannot find enough dollars to fully cover every patient—CCNW contributes about $1 million in charity care per year—but a high percentage of uninsured patients do qualify for enough financial aid to cover the cost of caring for them and prove the old algorithm wrong.

Higher patient numbers also increase CCNW’s market share, which gives the practice a stronger position when it is negotiating compensation with private payers. Turning poorly insured patients away boosted the patient rosters of competing organizations and gave those organizations more leverage with payers. Now that CCNW controls more than 75% of the market, the practice has given payers little alternative but to offer better payment agreements. Finally, higher patient numbers also enable the practice to fulfill its mission of providing comprehensive cancer care across a large geographic region that has fewer people than the island of Manhattan, which had 1.6 million in 2014. The practice now sees enough patients to support all the personnel and equipment needed to treat all but the rarest tumor types.

To achieve growth and stability, the practice also needed to align itself with one of eastern Washington’s 2 big hospital chains to cement its control over radiation treatment services and thus be able to fully integrate its offerings to patients. CCNW made a proposal to Providence Health Services, the hospital network that had once sought to buy the practice. Providence would abandon its radiation oncology business and, in exchange, CCNW would give Providence a share of its radiation oncology profits. The offer was tempting enough to secure both a quick deal with Providence and a call from Idaho’s Kootenai Health, which wanted (and got) the same arrangement with CCNW.

The deal, formally expressed as The Alliance for Cancer Care, allowed CCNW to expand its radiation oncology offerings from 4 linear accelerators at 4 offices to 8 linear accelerators at 8 offices. It also gave the practice a strong alliance with a provider of tertiary hospital services sufficient to cover nearly any medical problem with any patient. But CCNW still wasn’t finished using partnerships to supplement its medical offerings.

The practice does not get enough patients with cancers of the head and neck to support its own surgical specialists, so it has aligned itself with a pair of independent specialists in Spokane. It also has aligned itself with a facility that provides gamma knife surgery for those relatively rare patients who need such a procedure. Such partnerships give CCNW patients seamless access to specialized care—no extra forms to fill out, no separate billing, etc—and the specialists get additional business.

More services have led to greater market share, which has made it possible to provide even more services. This positive cycle has made CCNW financially successful. It has also insulated the practice against forces that have necessitated more radical changes at other practices across the country.

For example, CCNW has adopted treatment pathways to ensure that all its oncologists follow established and standardized best practices for treating any particular tumor type at any particular point in its development. Indeed, the practice was one of the pioneers in creating the treatment pathways that were eventually adopted across the US Oncology network. CCNW has not, however, felt the need to jump with both feet into an alternative-care model that replaces fee-for-service compensation for payments based on outcomes that an oncology practice may or may not be able to control.

The practice was interested in participating in one of the pilot programs designed by CMS to reward high-quality care (and pay less for low-quality care), but its electronic medical record was unable to track the necessary data. By the time the practice had upgraded, the participation window had closed. “Research and pilot programs are still a long way from establishing a complete set of best practices, but there are a lot of exciting strategies for reducing costs and improving outcomes, all in various stages of development, and we now have ourselves at a point that we can jump in pretty quickly when it makes sense for us to do so,” said Benincosa. “We don’t want to get ahead of the evidence but we’re eager to keep improving the quality of the product we offer.”

The private payers in CCNW’s service area—which have been aggressive about trying to control costs by requiring prior authorization for an ever-growing list of treatments—have taken a wait-and-see attitude about outcome-based compensation. Neither Blue Cross-Blue Shield, the dominant provider, nor any of its local competitors have pushed for any move away from fee-for-service. They may be waiting, like so much of the nation, to see whether any substantial healthcare reforms emerge from the current Congress.

The partners at CCNW are naturally interested too, particularly because Washington is a Medicaid expansion state, but they are trying not to let uncertainty hinder the evolution of their practice. “The state of cancer care is changing so quickly that practices must constantly adapt just to stay current,” said Call, who added that the practice’s long-term business plan may bring continued growth, but only in its established footprint. “We don’t have any grand plan to double in size, but the population around here is aging, so cancer rates are rising and we are going to need more doctors to treat them all.”

Conti RM, Landrum MB, and Jacobson M. Health Care Cost Institute. The impact of provider consolidation on outpatient prescription drugbased cancer care spending. Health Care Cost Institute website. www. healthcostinstitute.org/wp-content/uploads/2016/08/HCCI-Issue-Brief- Impact-of-Provider-Consolidation.pdf. Published 2016. Accessed June 2, 2017.