A large independent group of oncologists in Philadelphia is suing the area’s dominant hospital system, Jefferson Health, alleging the system is violating federal antitrust and kickback laws by creating a “concerted campaign to eliminate” the group’s “presence in the oncology marketplace.”
The lawsuit resurfaces longstanding concerns associated with hospitals buying up physician groups and then forcing those physicians to refer patients to the hospitals’ own facilities, even if that’s not in a patient’s best interest. Hospitals have increasingly acquired physician groups over the past 15 years, and in the process have entrenched monopoly positions for certain types of care by preventing patients from “leaking” to competitors.
Obtaining more market share and negotiating power isn’t the only incentive for hospitals to scoop up physicians. Oncology, in particular, is a lucrative specialty for hospitals to own. Revenue is immediately boosted because hospitals are able to charge more for the cancer doctors’ services in a hospital-owned clinic, even though those same services would be significantly cheaper in an independent clinic. Hospitals that participate in a federal drug discount program, known as 340B, also are able to buy expensive chemotherapy drugs for cheap while still billing insurers full freight.