UPMC is building up to 11 freestanding cancer centers in the region, several of which are joint ventures with independent hospitals, while WPA has forged a partnership that will combine cancer programs from its six hospitals with programs within seven other independent hospitals.

Both initiatives will significantly expand the availability of cancer care technology and resources in the region and both seek to increase the level of participation of patients from community hospital settings in clinical cancer trials.

Also at stake are cancer patient referral patterns by physicians in these community settings to UPMC’s and WPA’s tertiary and quaternary facilities, as well as the ability of both systems to recruit top oncologists.

The resulting competition may indeed improve access and quality of care for cancer patients in western Pa., but there is disagreement over whether it will also drive up costs and produce wasteful duplication of services.

UPMC’s Approach

UPMC Health System and the University of Pittsburgh Cancer Institute (UPCI) plan to construct nine new regional UPMC Cancer Centers, with two others under consideration, and plan to open the $104 million Hillman Cancer Center in Shadyside this summer, according to Antony J. Detre, UPMC Health System’s vice president of corporate development.

The new centers are slated to be established in the following locations, says Detre:

• John P. Murtha Pavilion, a consolidation of four UPMC medical and radiation oncology practices in the Johnstown area, with a projected capital investment of $9 million and an opening date this July.

• South Hills Health System (which has recently changed its name to the Jefferson Regional Medical Center), a radiation oncology joint venture with UPMC, projected to cost $4.5 million and open this July.

• St. Clair Hospital, which will lease land on which UPMC will build and own the center at a projected cost of $4.5 million for completion in October.

• Monroeville, a consolidation of two UPMC medical oncology practices and a new radiation oncology unit, projected to cost $7.5 million and open in November.

• Mountain View, a joint venture between UPMC and Latrobe Area Hospital consolidating four UPMC medical oncologist practices and one UPMC radiation oncologist, projected to cost $7.7 million and open in October.

• Allegheny Valley, a consolidation of two UPMC medical oncologist practices with one of its radiation oncologist practices, projected to cost $7.5 million and open in October.

• Horizon, a consolidation of two UPMC medical oncologist practices with one of its radiation oncologist practices, projected to cost $7.5 million and open next March.

• Heritage Valley and Moon, both joint ventures between UPMC and Heritage Valley Health System in which UPMC currently employs the radiation and medical oncologists who service that market area, with a projected cost for both locations of $9 million and scheduled openings in the first half of next year.

Two other UPMC Cancer Center locations under consideration, says Detre, including New Castle in Lawrence County and Uniontown Hospital.

To determine where to place the new centers, UPMC consulted with its community-based oncologists and with officials from the various hospitals over issues of market capacity, and service and equipment needs, says Detre.

Detre says that the new centers are part of UPMC’s strategy to improve access to care for cancer patients by eliminating the need for them to leave their communities and enabling local community hospitals that are currently losing money from decreased cancer care reimbursement to treat more patients locally. The most highly specialized types of radiation oncology that is not available at the centers, perhaps two to three percent of all types, would be available at the Hillman Cancer Center, Detre adds. Subspecialists from Magee-Women’s Hospital will also work at the centers, he notes.

The centers will consolidation more than 50 office-based medical oncology practices that currently exist as part of UPCI’s clinical network and employ 130 physicians and 15 radiation physicists, says Ronald B. Herberman, M.D., director of UPCI and president of the new cancer centers. Services at the centers will include radiation treatment and diagnostic technology such as linear accelerators for intensity modulated radiation therapy (IMRT), and PET/CT scanners, he notes.

IMRT is a technology that requires sophisticated physics for treatment planning, delivering more finely focusing doses of radiation therapy and sparing normal tissue, says Herberman, who notes that it is unusual to have such a technology available at community sites—generally only being seen at a limited number of cancer centers and academic medical centers.

Using a hub-and-spoke model, scans taken in the community settings will be fed via Internet connection to a centralized IMRT treatment planning center at the Hillman facility in Shadyside, which Herberman says will produce efficiencies by not having to duplicate treatment planning facilities at the individual centers. Further efficiencies of scale, he says, will come from UPCI’s ability to negotiate favorable prices for drugs and medical devices because of its large volume of patients—over 30,000 last year. Herberman is confident that that those efficiencies will offset the cost of building the network.

Given the high proportion of Medicare patients in western Pa.—as high as 80 percent at some of the new cancer center sites—Herberman is concerned that proposed changes in Medicare reimbursement for some treatments, particularly for chemotherapy, may not be sufficient to cover the cost of that care. Nevertheless, Herberman maintains, UPMC will not be losing money on its cancer center sites and will be proactively marketing to cancer patients outside of the region.

The centers also make a large portion of UPCI’s clinical research protocols available to patients in the community setting, Herberman notes, without them having to come to the Hillman Center. UPMC will train a number of oncology nurses to serve as clinical research coordinators to educate physicians at the centers about the clinical trials available, to proactively inform patients about the potential value of clinical trials and to encourage participation in the trials as an option for more innovative treatments, says Herberman. The outreach effort, he adds, will include clinical trial print material to each new patient and videotapes played in waiting rooms at the centers.

UPMC hopes to leverage its large volume of cancer patients in other ways. UPMC Health System, through its Pittsburgh Clinical Research Network, is forming preferred partnership arrangements with pharmaceutical companies whereby UPMC agrees to conduct a certain minimum number of trials per year and to accrue a certain number of randomized patients, rather than contracting on an individual trial basis, Herberman explains. In return, the pharmaceutical company makes available a pipeline of new agents at the earliest stages and UPMC physicians are given the opportunity to develop the majority of protocols jointly with pharmaceutical company scientists for the use of those agents. So far, UPMC has secured such a contract with Eli Lilly & Co., which is offering annual funding for trials of over $1 million, and the cancer institute expects to have six more contracts in the next three or four months, says Herberman.

UPCI expects the combination of its Hillman Center and its large clinical programs and trials facilitated by its new network of cancer centers to grow its clinical volume by 15 to 20 percent a year over the next two or three years through aggressive recruitment of oncologists and cancer researchers and a growth in patient referrals from outside of western Pa., Herberman notes. The institute has recruited over 50 major new faculty in the last three years, two-thirds of them physicians, and hopes to recruit another 25 to 30 over the next few years, he adds.

As part of an ongoing recruitment rivalry with West Penn Allegheny, UPCI two years ago had scored a major victory by luring away from Allegheny General Hospital (AGH) the region’s largest group of oncologists, headed by Stanley Marks, M.D.

West Penn Allegheny’s New Cancer Network

Earlier this year, West Penn Allegheny had announced two of its own radiation oncologist recruitments away from UPCI—David S. Parda, M.D., who had previously been at AGH, and Russell Fuhrer, M.D., who headed radiation oncology at UPMC Shadyside.

In late February, the West Penn Allegheny Cancer Institute (WPACI) announced that it is recruiting Michael J. O’Connell, M.D., a high-profile colorectal oncologist, from the Mayo Clinic to head its new $30 million cancer center adjacent to AGH, which is scheduled to open in June. O’Connell worked as the Mayo Clinic’s deputy director for clinical affairs and also headed the North Central Cancer Treatment Group, a cooperative group of 20 community health centers, including the Geisinger Clinic in Danville, that performs clinical trials sponsored by the National Cancer Institute.

WPACI’s new cancer center will integrate in a single location a variety of services, including digital mammography, MRI and PET scanning, which should shorten the turnaround time for such services, according to Norman Wolmark, M.D., who is director of oncology for WPA, as well a chair and principal investigator for the National Surgical Adjuvant Breast and Bowel Project (NSABP), a national cooperative group based at AGH. The new facility will also house disease-specific centers for breast, colorectal and lung cancers; digestive and urological neoplasms; and neuor-oncology, Wolmark adds.

Wolmark says the new center was a necessary upgrade to treat the significant volume of patients within the Allegheny system, and he notes that the surgical oncology program at AGH has seen an increase in patient referrals, despite the departure of Mark’s group to UPCI. The center was planned back in 1997, but was put on hold because of the AHERF bankruptcy, Wolmark notes.

In addition to opening a new cancer center, WPA is forming a cancer network with three regional health systems, collaboratively linking the cancer programs at its six hospitals (West Penn, Allegheny General, Forbes Regional, Suburban General and Alle-Kiski—all in Allegheny County, and Canonsburg General—in Washington County) with cancer programs at:

• Conemaugh Health System (Memorial Medical Center and Miners Medical Center—both in Cambria County, and Meyersdale Hospital and Windber Medical Center—both in Somerset County).

• Somerset Hospital.

• Westmoreland Health System (Westmoreland Regional Hospital and Frick Hospital—both in Westmoreland County).

The partnership is intended to enhance the scope and type of services available in communities served by those health systems, providing their patients access to WPA’s cancer protocols and clinical trials, including NSABP and other cooperative group trials, and access to WPACI’s subspecialists on an as-needed basis, says Charles O’Brien, president and CEO of West Penn Allegheny Health System.

Similar to UPMC’s plans, the WPA partnership will facilitate uniform clinical trials at the community institutions by offering the management support of WPA clinical data coordinators who will work directly with community physicians and patients to help evaluate patient eligibility for clinical trials and protocols, and to explain trial details to patients—time-consuming tasks that Wolmark says have been the most inhibitive steps to trial enrollment.

The partnership will also make available to the community institutions a common tumor registry and a common Institutional Review Board, Wolmark adds.

O’Brien expects that the enhanced access to major clinical trials afforded by a large network of cancer programs will enhance WPA’s ability to recruit top oncologists and he indicates that that ability was part of the rationale for creating the partnership.

A larger patient base for trials can also bring in more grant revenue. "From a support standpoint," says Wolmark, "being able to come in as a network is certainly more compelling than coming in as an individual institution and would make us more competitive for developing a network-based protocol system."

Wolmark also notes that WPACI, through the NSABP and other cooperative groups, has access to the pipelines of major pharmaceutical companies who are developing novel treatments for use regionally and nationally. He adds that the institute has just developed a Phase II program at the national level and will be providing it on a regional level.

It was the initiative of the community institutions that led to the creation of WPA’s cancer care partnership, rather than WPA trying to entreat them to become part of a network, Wolmark maintains. The prospect of greater participation in national cancer trials by their physicians and patients is attractive to the community institutions, as is the enhancement of information exchange and physician education opportunities.

A number of the participating hospitals have worked together for some time and were looking for options to enhance their relationships with a tertiary/quaternary hospital, says John M. Moryken, Conemaugh Health System’s executive for development and marketing. "UPMC has an ‘own it or don’t participate’ model. We are a freestanding, successful health system and don’t see a need to go in that direction," he notes, adding that Conemaugh’s flagship Memorial Medical Center has enjoyed an 11 percent annual growth in patient volume over the last two years and is profitable on operations.

Westmoreland Health System was attracted to the WPA partnership model’s approach of supporting cancer services in the community using existing sites and services and locally governed health care providers, says its CEO Joseph J. Peluso.

Network members look forward to enhanced collegiality among medical oncologists and radiation therapists across institutions, who will meet at least quarterly to discuss administrative and clinical issues, says Moryken. Network members will also discuss opportunities for common programs and will be an integral part of protocol development, notes Wolmark.

Capital funding to community institutions from WPA Health System is not a specific component of the partnership. Memorial Medical is building an IMRT center to open in the fall, notes Moryken, who says that each member of the WPA cancer care network will fund its own capital needs. Memorial hopes to staff the IMRT center with full-time AGH physicians and is currently in discussions with them to work out the details of the arrangement, says Moryken.

Westmoreland Regional Hospital is also installing its own IMRT facility, expected to open by April, and is also funding it themselves, notes Sam Raneri, Westmoreland Health System’s vice president of clinical support services. There may be opportunities in the future to explore the possibility of joint service or equipment support between Westmoreland and WPA, says Peluso.

Four years ago, AGH built the Somerset Cancer Center across from Somerset Hospital, and continues to operate it, bringing top-level physicians to the community, says Michael J. Farrell, CEO of Somerset Hospital. The new network partnership ties in the Conemaugh and Westmoreland systems and provides cross-coverage of physicians across institutions, he adds.

From a competitive standpoint, the WPA cancer care partnership may be seen as a tactical necessity to preserve patient referral patterns that could otherwise be lost to the UPMC system through their freestanding community cancer centers.

Moryken expects that Conemaugh’s participation in the cancer partnership will produce a net decline in the number of cancer patients referred out of the community because of the collaborative information exchange it will afford, including easier out-of-area consults for community-based physicians. The partnership does not include any conditions or agreements for patient referrals, Moryken adds.

UPMC oncologists who practice at the hospitals within the WPA cancer care network would risk alienating local physicians if they were to alter their referral patterns in response to UPMC’s new freestanding cancer centers, Moryken maintains. Conemaugh employs 60 to 70 primary care physicians and many other independent physicians use, and are loyal to, the Conemaugh system, he adds. Since UPMC oncologists rely on referrals from local primary care physicians, they have to manage those relationships, Moryken argues.

Peluso says he continues to welcome the two UPMC oncologists who see patients at Westmoreland Regional to remain on staff there, noting that they are well-established in the community.

Patient Boon v. Wasteful Duplication

One view is that the escalating competition between the UPMC and WPA cancer networks is bringing higher-quality cancer care to many more locations throughout western Pa. and therefore represents a great benefit for patients.

Most of the cancer centers that UPMC will open are being built in collaboration with independent community hospitals that are in need of upgraded equipment and facilities and have chosen to partner with UPMC to provide enhanced services to their communities, says Detre.

Other UPMC cancer centers are consolidations of UPMC physician practices already in the communities and represent a redirecting and enhancement of resources, says Herberman, who notes that the IMRT that will be available represents a significant improvement in radiation therapy.

The construction of WPA’s cancer center next to Somerset Hospital was more than justified by the growing number of new cancer cases in Somerset County each year, says Farrell, who believes that the volume of patients in Allegheny and surrounding counties can sustain cancer programs offered by both WPA and UPMC.

"I would like to give both of these systems the benefit of the doubt that they are going to improve care. When you’ve got that kind of competition, it’s generally good for consumers," says David Straight, executive director of the Employer’s Medical Access Partnership, a health care purchasing cooperative representing 150 employers in Cambria, Somerset and Bedford counties.

Another view is that the competition will produce unnecessary duplication of expensive services that is ultimately going to drive up the cost of care for patients and purchasers of health care. High-end technology like IMRT, for example—which is only sporadically available across the country—will soon be available at multiple locations in rural Pa.

Three of UPMC’s new centers will be virtual neighbors with WPA facilities: one in Johnstown will be 1.5 miles from Conemaugh’s Memorial Medical Center, one in Harrison Township will be less than two miles from WPA’s Alle-Kiski Medical Center, and one in Monroeville will be close to WPA’s Forbes Regional Hospital.

"We will continue to investigate and research to help us be assured that, whatever the strategies of these two health systems are, whether it is expansion or reconfiguration of existing cancer facilities for new uses, that it will not create unnecessary duplication and inherently raise the health care costs—along with no measurable enhancement in the quality of cancer treatment in the region," says M. Christine Whipple, executive director of the Pittsburgh Business Group on Health, a coalition of 36 large employers in the region.

Others in the business community are more skeptical. "Life-saving technological advances are good. The perceived advantages of having more satellite centers scattered all over hell’s half-acre needs to be examined," says Cliff Shannon, director of SMC Business Councils, representing 5,000 small companies in southwestern Pa.

Shannon is concerned that the cost of new cancer centers and new high-end equipment is going to be buried in the rate base that employers and employees pay for health insurance coverage. He projects that the cost of health coverage for point-of-service health plans in the region between 1998 and 2008 is going to double, taken as a percentage of salary corrected for three percent annual inflation. "That cost has to be weighed very carefully against what the real advantages for patients are," he adds, noting that he has seen no clear data that satellite oncological centers are going to improve patient outcomes.

Instead, Shannon says, the health care industry nationwide is being driven by the impulse of large health systems to try to gain or preserve market share by expanding their reach into the community level—a "devolution" of health care services from larger, high-volume centers of excellence to small community-based settings. The result, he says, is an "absurd number" of emergency helicopters, cardiac centers, MRIs, and now cancer centers in the region.

Yet another view is that, even if duplication of high-end cancer care raises costs, those costs would be still higher if only one health system controlled that care and could set its own price. Competition, even if duplicative and expensive, may be less costly than a monopoly.