Evaluating the Impact of the Proposed Radiation Oncology Model: How Pressure to Lower Costs May Result in Reduced Access to Care

Abstract

In 2019 the Center for Medicare & Medicaid Services (CMS) proposed a new payment model for radiation oncology (RO). This model introduced episode-based payments: a common, base payment for an episode of care, regardless of radiation technique or fractionation. This model may encourage providers to pursue shorter treatments as a means to reduce cost. The ability of individual facilities to reduce costs via this method has not been well characterized, and there are likely significant differences between a larger hospital-based radiation oncology facility (HF) and smaller community facility (CF). The goals of this study are to model how a HF and CF might adapt under pressure to shorten treatment courses, to compare their abilities to reduce costs, and to explore the impact of how these differences might affect access to care. Annual facility costs were determined based on our 2019 institutional financial reports as the sum of all relevant costs including personnel, space, utilities, equipment, materials, and service contracts. Per-unit salary, equipment purchase price, service contracts, and cost of utilities per square foot were assumed similar between the HF and CF. The shift toward hypofractionation was modeled as a 30% reduction in total fractions delivered per course. The HF was modeled as a 3 linear accelerator (LINAC) facility that could adapt as follows: 2 LINACs instead of 3, 2 physicists instead of 3, 6 therapists instead of 8, and a modest decrease in space required with one fewer LINAC vault. The CF was modeled as a 1 LINAC facility that could adapt by reducing therapists from 3 to 2.5 full time equivalents, with other staffing and equipment levels remaining constant. Annual estimated facility costs for the HF before and after adoption of hypofractionation were, respectively, $7,156,000 and $6,091,000, representing a cost savings of 15.1%. Annual estimated costs for the CF, before and after respectively, were $2,664,000 and $2,611,000, representing a cost savings of 2.0%. Larger departments are significantly better positioned to reduce costs as treatment courses shorten. In this study, the hospital-based facility was able to reduce costs by 15.1%, compared to just 2% for the community facility. This was primarily a result of greater flexibility in adjusting staffing and equipment. This difference may have a significant impact on access to care across the United States. Under the proposed RO model, a single base payment will be offered per episode of care, regardless of where care is furnished. Unless payment adjustments are made for smaller community-based practices, these facilities will have exceptional difficulty competing with larger hospital-based practices due to inability to reduce costs. As payment rates are adjusted to reduce nationwide healthcare expenditures, smaller community facilities are more likely to face financial pressures and ultimately close, which may disproportionately reduce access to care in rural communities.