Research activities at CORT, P.A. closed a couple of years ago as a result of poor reimbursement for conduct of clinical trials from both government and private pharmaceutical sources. The costs of extensive physical and human infrastructure that are necessary for conduct of oncology clinical trials were not met. In addition, both government and private pharmaceutical trial sources often tracked study milestone payments poorly, if at all. Despite careful tracking and invoicing for study milestone achievement, payments were almost always delayed. In the case of one government-sponsored study for breast cancer, payments were not received for several years after the study actually closed. Another government study mailed payments to the hospital rather than the investigator’s study research office resulting in hours of lost time in retrieval of funds from the hospital, which had deposited the funds to its account, even though it had no involvement in the conduct of the research at our private office research site. In discussing the inadequate reimbursement for trial conduct, one contract research organization trial manager visiting my office told me that the CRO routinely offered per-subject research reimbursement at levels below what they knew the trials costs. It was the duty of the investigator/research manager to discover the true cost and request a higher payment, and that increased level of payment would be routinely granted if requested. The true costs are often difficult to quantify, and many hidden expenses do not materialize until the trial is already under way at the site. Many other issues could be cited, but my point is that both government and private research sponsors understand these issues well, but fail to address them because they (and the CRO intermediaries that they employ) benefit financially by suppressing payment to the sites conducting the trials. This is why so few private practices participate in the conduct of clinical trials: they lose money, but learn this only too late. Because the overhead costs of State Universities or other government-owned entities are covered by the taxpayers, they can “afford” to conduct research studies that are not profitable, but my suspicion is that they do not even know that they lose money in the conduct of many of the clinical trials they perform.
Subsequent to research closure at CORT, the local single-specialty oncology provider that holds a virtual monopoly in the Texas region has continued with its anti-competitive practices, buying the clinical practices of physicians who might refer patients to oncologists (breast surgeons, colorectal surgeons, urologists, surgical oncologists). That practice is a form of vertical human supply-chain management, which consolidates oncology patients into a stream that only flows into that giant oncology provider’s practice locations. The small practices are left with dwindling numbers of patients and reduced income, but the same (or usually increasing) overhead. It is no wonder that a survey of private oncology practices showed that in the past year 20% have closed and another 20% have folded to become part of hospital or other entities (yes, some are swallowed by the giant oncology monopoly player mentioned above).
In addition to competitive pressures of unfair trade practices, increased demands of ICD-10 integration, electronic health record “meaningful use” documentation, HIPPA law updates, oncology drug shortages, drug/treatment/radiology authorization requirements, electronic immunization registry requirements for adults, and frequently delayed or denied payments for oncology drugs provided by the office have continued to be major problems for private oncology practice. Such issues lead to hundreds of hours of unpaid managerial time spent in the practice each year, despite lower take-home for the physician-manager.