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Each week, Health Affairs' Rob Lott brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.
A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.
00;00;00;00 - 00;00;37;23
Alan Weil
Hello and welcome to “A Health Podyssey”. I'm your host, Alan Weil. According to the National Cancer Institute, roughly 1.8 million people are diagnosed with cancer and 600,000 people die of cancer in the United States each year. Death rates for the leading causes of cancer: lung, colorectal, pancreatic and breast cancer are all higher in rural areas. As cancer death rates fall in the United States, the declines have also been slower in rural than in urban areas.
00;00;37;25 - 00;01;03;21
Alan Weil
Now, many factors contribute to these urban rural disparities. One factor is access to cancer care. What can be done to increase the availability of cancer care in rural America? That's the topic of today's episode of “A Health Podyssey”. I'm here with Kelsey Owsley, assistant professor in the Fay W. Boozman College of Public Health at the University of Arkansas for Medical Sciences.
00;01;03;23 - 00;01;31;22
Alan Weil
Dr. Owsley and coauthor Kathy Bradley published a paper in the June 2023 issue of Health Affairs, assessing whether the 340B drug pricing program leads to increase in oncology services in rural hospitals. They find that participation in 340B is correlated with increased likelihood of offering cancer care. We'll discuss these findings and their implications in today's episode. Dr. Owsley, welcome to the program.
00;01;31;25 - 00;01;33;20
Kelsey Owsley
Thanks so much for having me.
00;01;33;22 - 00;01;56;01
Alan Weil
It's great to be able to talk to you about this important topic and a very nice study that you've done here on it. Let's start with a little bit of background. I gave just a few basic statistics in the introduction, but can you tell us a little bit about how accessible oncology services are in general and how maybe that access differs between rural and urban areas?
00;01;56;06 - 00;02;29;00
Kelsey Owsley
So we know that there are disparities in access to oncology services across the U.S., especially for low income patients, racial/ethnic minority populations, people who lack health insurance coverage, including those who are uninsured and underinsured, as well as rural patients. And we know in particular that rural patients have more limited access when it comes to oncology services compared to their urban counterparts.
00;02;29;02 - 00;03;01;06
Kelsey Owsley
And it's estimated that around one in five rural Americans actually live over 60 miles away from a practicing oncologist. And this does have important implications for cancer outcomes such as cancer survival rates. And there's been a number of studies have shown that longer travel distance to a cancer treatment facility is associated with a lower likelihood of receiving guideline concordant cancer treatment and completing cancer care once diagnosed.
00;03;01;09 - 00;03;26;27
Alan Weil
So there are some higher risk factors for rural populations, but we're not focused on the risk factor so much today. We're really focused on, let's say you need cancer care. There are barriers to access. What you focused on in your study is participation in the 340B program. Now, we could have an entire episode on the structure of the 340B program, but that's not today.
00;03;26;29 - 00;03;41;08
Alan Weil
Can you just give our listeners enough of a sense of how 340B works so that they can understand why a hospital's participation in the program might have an effect on whether or not the hospital offers oncology services?
00;03;41;10 - 00;04;20;12
Kelsey Owsley
Sure. So the 340B program allows eligible providers to receive anywhere from a 25 to 50% discount off approved outpatient drugs such as chemotherapies and immunotherapies. Really, the goal of the 340B program is to allow providers to stretch their resources and to continue providing comprehensive patient services. And really with the high costs of oncology drug procurement, we hypothesized that that reduction in drug acquisition costs could allow hospitals to expand their oncology service offerings.
00;04;20;14 - 00;04;52;09
Alan Weil
So when we think about cancer care, there are a lot of high cost drugs involved. And basically what you're saying is if you reduce the price for the hospitals in acquiring those drugs, then there's presumably a motivation for them to offer those services. So let's start looking at the findings of your study. Tell us a little bit about how common oncology services were at the beginning of your study period and how it changed and how you saw the relationship with 340B.
00;04;52;11 - 00;05;30;13
Kelsey Owsley
So we did look just descriptively at the percent of hospitals that offered oncology services at the beginning of our study period, which was in 2011. We found that around 40% of rural hospitals offered oncology services, whereas the majority, almost 90% of urban hospitals, offered oncology services. And in our study we found that those hospitals that began participating in 340B were more likely to add oncology services relative to those hospitals that never participated in the program during our study period.
00;05;30;15 - 00;05;39;28
Kelsey Owsley
We found that those hospitals were about ten percentage points more likely to add oncology services relative to those hospitals, again, that never participated.
00;05;40;01 - 00;06;00;23
Alan Weil
I have to almost stop at the first sentence of your answer to that. So if I walk into a random hospital in an urban area, it's essentially certain that I could receive cancer care. But you're saying that at the beginning of this study, more than half of the hospitals I might walk into in a rural area, if I needed cancer care, they would not have been able to deliver that to me.
00;06;00;24 - 00;06;03;01
Alan Weil
Did I hear that right?
00;06;03;03 - 00;06;18;09
Kelsey Owsley
Exactly. And that's if a hospital is operating in a rural area. And we know that there are many rural areas that do not have hospitals, then that there have been many hospitals closing their doors in the past decade.
00;06;18;11 - 00;06;44;05
Alan Weil
So that's an incredibly large gap just at baseline and you start seeing some closing of that gap. Can you say a little bit more about the characteristics of those hospitals? So you're comparing hospitals that joined the 340B program at different times with those that didn't. Just scratch the surface a little more and go into some more characteristics of these hospitals, if you could?
00;06;44;08 - 00;07;11;18
Kelsey Owsley
Sure. So we did look at hospitals that were newly participating in the 340B program and whether or not they added oncology services or not. And we did find that those that added oncology services were more likely to be located in more affluent rural communities compared to those that did not. So they were more likely to be located in areas with a higher insurance rate.
00;07;11;19 - 00;07;19;17
Kelsey Owsley
They're more likely to be in states that expanded Medicaid as well as they were less likely to be public or critical access hospitals.
00;07;19;20 - 00;07;49;27
Alan Weil
So is the way to think about this that 340B offers some motivation to provide this care, but you sort of need to be in a context where that motivation is enough to tip the balance toward this being a good decision for the hospital. So if you're, if you're somewhere with a lot of uninsured people and they haven't expanded Medicaid, yes, you can get cheaper cancer drugs, but you still have a lot of people who can't afford them.
00;07;50;00 - 00;08;10;25
Alan Weil
If you're in a more affluent area, if there's more insurance coverage, if there's more Medicaid, then you look at sort of, you do the math and you say, okay, not only can we reduce the cost, but we also have a revenue stream on the other side. Is that sort of the way you think about, I know this was, you didn't interview a bunch of hospital administrators, but I'm just trying to understand sort of the mechanics and the dynamics here.
00;08;10;26 - 00;08;12;18
Alan Weil
Is that how you see it working?
00;08;12;21 - 00;08;38;26
Kelsey Owsley
Yeah, I do think that that's what's going on, that there is a lot of, you know, different market and hospital factors that go into the decision of whether to operate at or offer a service line. And I do think that the market that their serving, hospitals are going to consider that, you know, whether they're going to be able to generate enough revenue to justify that service line.
00;08;38;28 - 00;09;25;18
Alan Weil
Well, I want to talk to you a little bit more about sort of the policy implications here for 340B and maybe some other policy options. We’ll discuss those topics after we take a short break. And we're back. I'm speaking with Dr. Kelsey Owsley about access to oncology services in rural areas. The primary findings of this study are that when hospitals do take up the 340B program, they become more likely to offer oncology services.
00;09;25;20 - 00;09;52;11
Alan Weil
Earlier on, we discussed the really quite low baseline rates of coverage. And when I think about cancer care in general as a service line, I tend to think of it as highly profitable for hospitals. If you look around the country and you look at the data, there are certain service lines that are loss leaders and they're harder to find and ones that tend to be profitable and those tend to be easier to find.
00;09;52;13 - 00;10;13;21
Alan Weil
So I know earlier on already sort of expressed some surprise at the low baseline rates of offering cancer care at rural hospitals. But given the general profitability, is there anything more you can add about why this is not a common service in rural areas?
00;10;13;23 - 00;10;48;20
Kelsey Owsley
Yeah, so you're right. Oncology services are typically considered profitable for hospitals to offer, but we do know that some providers do report the high costs of oncology drugs being a barrier to providing oncology services. And I do think that this issue is exacerbated among rural hospitals because they have been in financial distress in recent years or are more likely to be in financial distress compared to other urban hospitals.
00;10;48;22 - 00;11;09;26
Kelsey Owsley
But they also have other challenges in attracting specialty providers, and we know a disproportionate number of oncologists practice in urban areas compared to rural areas. And again, there may just not be enough demand or need in the area to justify that service line being offered.
00;11;10;03 - 00;11;33;28
Alan Weil
So you need, as we know from again, many other areas of looking at hospitals, you need a critical mass of patients in order to attract providers in order for the investment to make sense. But I do want to spend a moment on that first part of the answer, as I understand it. There's sort of like a cash flow problem here, right? That drug acquisition occurs before you get reimbursed for it.
00;11;33;28 - 00;12;00;18
Alan Weil
And so even if there's a margin to be achieved when you administer the drugs, you have to procure them in advance and they can sit in stock where you're just, if you don't have the cash to keep them around, that can be a barrier. And that's probably a bigger burden for smaller hospitals and smaller rural hospitals, where cash flow may be more of an issue or just the patient volume is lower.
00;12;00;19 - 00;12;04;19
Alan Weil
Is that sort of part of the accounting dynamics here?
00;12;04;24 - 00;12;22;22
Kelsey Owsley
Yeah, I think that's exactly right. And I mean, oncology drugs are expensive for insurers and patients, but at the beginning of that process, at the dispensing line, hospitals have to be able to acquire them and purchase them as well.
00;12;22;24 - 00;12;54;07
Alan Weil
So the 340B program is under a lot of criticism. And again, you should feel free to talk about it more generally if you like. But for the purposes of our conversation, I am curious, is your sense from this work and the other work you've done and looked at that at least in this area, 340B seems to be achieving one of its goals, which is to expand access to care for people who otherwise might not have it.
00;12;54;09 - 00;13;43;28
Kelsey Owsley
I think our study does find suggestive evidence that the 340B program does allow rural hospitals to sustain oncology services and to continue offering comprehensive patient services to vulnerable rural populations. But at the same time, we do know that there have been a number of studies when they are looking at all hospitals, including urban hospitals, that do find that the 340B program does not allow hospitals or providers to expand and services to vulnerable patient populations, and that providers typically are using the program to maximize profit rather than expanding their service lines.
00;13;44;00 - 00;14;06;02
Kelsey Owsley
And so I do think that that should obviously be considered in policy discussions. But I, I do think that this study provides some evidence that we should consider the benefits of the 340B program to vulnerable rural hospitals and possibly even other hospitals in financial distress like public hospitals.
00;14;06;05 - 00;14;32;17
Alan Weil
Well, that's very helpful and very interesting. I wonder also if there are other thoughts you have based on your work or others about other dimensions of policy that could help improve access to cancer care in rural areas. After all, you mentioned a huge gap at the outset, and although 340B did have a positive effect, the numbers are still low relative to urban areas.
00;14;32;17 - 00;14;40;07
Alan Weil
Maybe they will always be somewhat lower, but are there other steps we could take to improve access to care in rural areas?
00;14;40;10 - 00;15;18;26
Kelsey Owsley
Yeah, I definitely think there's a number of things that we can do to move that needle to close the gap. I think one of the biggest things, especially for patients that are still in the workforce and eligible for Medicare, is expanding the availability of affordable health insurance coverage outside of employment, as well as ensuring paid sick leave for workers so that when they are diagnosed with cancer or another serious illness, they can take that time off work, If not leave the workforce to ensure they're able to receive the care that they need.
00;15;18;29 - 00;15;46;21
Alan Weil
Yes, it does seem like, and we didn't even touch on the causes for higher risk factors and that are not so much about cancer care, but about just trying to bring about closing some of the gaps in cancer mortality and morbidity in rural areas relative to urban areas. So it does seem like we need a multidimensional strategy both on the care side and on the prevention side.
00;15;46;23 - 00;16;11;17
Alan Weil
As we come to a close, I want to say it's a great pleasure to be able to have this conversation with you just shortly after we learned you were are about to receive the outstanding dissertation award from Academy Health at the annual meeting coming up quite soon. So congratulations on that. And I understand that the study we published isn't directly drawn from that award winning dissertation.
00;16;11;17 - 00;16;20;03
Alan Weil
But if you'd like to put this paper in the context of your broader work with your dissertation, I'd love to hear that.
00;16;20;05 - 00;16;55;25
Kelsey Owsley
Sure. Yes. Thank you. So my dissertation was focused on the 340B program, more generally looking at unprofitable service lines and whether the hospitals were able to cross-subsidize those. The savings from the 340B program to expand services such as mental health services and behavioral health as well as obstetric care. And so this was an extension of that work that I completed during my dissertation.
00;16;55;28 - 00;17;20;01
Alan Weil
Well, it's great to be able to be an outlet for your work and to catch you at this early point in your career and be able to advance people's awareness of it. Dr. Owsley, thank you for the research you've conducted here, for explaining it so clearly, for taking on an issue that really is critical if we want to improve health outcomes in this country.
00;17;20;03 - 00;17;23;13
Alan Weil
Thank you for being my guest today on “A Health Podyssey”.
00;17;23;16 - 00;17;28;19
Kelsey Owsley
Thank you so much. It is great to speak with you.
00;17;28;21 - 00;17;32;14
Alan Weil
Thanks for listening. If you enjoyed today's episode, I hope you'll tell a friend
00;17;32;16 - 00;17;36;27
Alan Weil
about “A Health Podyssey”.