Hear cancer survivor Tim Day talk increasing treatment expenses
Hear from cancer survivor Tim Day as he talks his diagnosis and the rising cost associated with UIHC’s purchase of Mission Cancer.
- The sale of independent oncology practice Mission Cancer + Blood in Iowa reflects a national trend of higher costs after practices are acquired by hospital systems.
- Research shows that when large hospital networks buy independent clinics, patient prices often increase without a corresponding rise in care quality.
- The trend is receiving bipartisan attention in Congress.
Tim Day was determined to bring a positive attitude to his treatment after a scary stage 4 cancer diagnosis in 2019. But he learned soon enough he’d need to bring a lot of money, too.
Aggressive prostate cancer, already metastasized, meant surgery, chemo and other wildly expensive hormone therapy drugs, one that billed out to his insurance at $14,500 a month. Monthly bills he paid just for the hormone therapy drugs amounted to a hefty car payment. Day lost track of his out-of-pocket expenses when they reached around $26,000 within the first two years ― not at all unusual in a state like Iowa with surging cancer diagnoses, a growing survivor population, rising insurance premiums and health-care prices.
Seven years later, the 67-year-old Iowa resident feels immense relief and gratitude knowing he’s in remission. Prostate-specific antigen, or PSA, tests for the cancer marker that once read off the charts now come back undetectable.
“It feels fantastic,” Day said.
But after the University of Iowa Health Care’s system purchased the Des Moines metro’s largest independent oncology practice, Mission Cancer + Blood, the price for the life-saving injections Day needs to keep the cancer at bay rose fivefold.
That’s made him consider all the patients in Iowa whose lives stand to be upended because they can’t afford those higher bills. UIHC, a state-run nonprofit, has said it’s building a statewide cancer-care network. Day wants to know: At what cost?
“Where is the empathy and compassion to the patient?” he asked. “At what point in time did it become such a for-profit business model?”
Gov. Kim Reynolds and some members of the Iowa Board of Regents, which oversees the state’s public universities, including the University of Iowa, were surprised to learn from a July Watchdog column that Iowans have faced substantially higher bills since UIHC purchased Mission Cancer and its clinics for $280 million. Across the health care industry, prices have increased for patients, insurers and employers as giant hospital networks have more frequently bought up independent clinics, new research on such sales nationally shows.
“What the evidence suggests is that this is going to make health care more expensive for the folks in Iowa and contract the Iowa economy,” said Zack Cooper, director of the Health Care Affordability Lab at Yale University. “And where does all the money go? It goes to the oncologists selling their practices and the leaders of the hospitals who are buying. They’re going to tell a story about better health care and the evidence just doesn’t support that.”
Cooper co-led the study, released last year. It looked at 276 physician-run practices that merged with hospitals or health systems from 2008 to 2016 and found hospital ownership of physician practices increased 71.5% nationwide during that period. The share of physicians working for hospitals nearly doubled in that span.
It also compared the prices charged post-acquisition with those of practices that remained independent, finding physician prices rose by 15.1% following the practices’ integration with hospital systems. That increase “substantially” exceeded what would be expected from any efficiency improvements. The sales “harm both consumers and end payers of health care services by increasing the cost of care without generating commensurate increases in quality,” the researchers concluded.
Hospital acquisition becoming the costly norm
Mission Cancer’s higher prices after its acquisition by UIHC are demonstrative of a national acceleration in health care spending over the past two decades. It nearly doubled to $4.5 trillion in 2023 from $2.5 trillion in 2000 in inflation-adjusted dollars, 2024 research from Cooper and others found. The hospital industry, which accounts for about 30% of all health care spending, has experienced more price growth than any other sector of the U.S. economy.
That growth “is a leading driver of income equality,” Cooper said. “The good news is people are starting to talk about it.”
Buyouts like Mission’s are getting bipartisan attention in Congress and from the Trump administration.
Oncology practices have been a target of so-called vertical integration because the acquisitions can be so profitable to hospital networks.
Around 60% of cancer patients now receive infused cancer drugs in hospital outpatient settings, according to UnitedHealthcare Group. That Minnesota-based conglomerate, the largest health care company in the world by revenue, has said moving appropriate cancer infusions to independent physician offices could reduce costs by about 35%, saving employers and commercially insured patients an estimated $12 billion annually while maintaining the same standard of care.
Prices for services are typically higher in hospital outpatient departments than in doctors’ offices. Since the sale at the end of 2024, UIHC has tacked hospital facility fees onto Mission Cancer bills at clinics far from the hospital, angering patients.
Day’s experience underscores the difference that makes.
He used to pay $140 quarterly for a blood test, injection of the hormone-suppressing drug Lupron, and an office visit. After Mission’s billing changed to the UIHC system last summer, his cost, after insurance, shot up to more than $740.
The $2,960 he stood to be billed over the course of a year for four visits was not covered by his $3,500 insurance deductible. Wellmark Blue Cross Blue Shield also was billed much more.
Oncology drugs become a profit center
In expanding with Mission, UIHC also can capitalize on drug-price markups through a federal initiative called the 340B Drug Pricing Program.
Started in 1992 to help safety net health care providers serve poor and uninsured patients, the 340B program requires manufacturers of drugs covered under Medicaid to provide a discount on outpatient drugs to providers, including enrolled hospitals and federal-grantee clinics.
Enrollees buy the drugs at deep discounts from pharmacies and bill insurance at market prices. Cancer drugs ― like Lupron, the one Day takes ― can be particularly profitable because they cost so much. Five of the 10 drugs most purchased in the 340B program in 2024 were used in oncology, according to the federal Health Resources and Services Administration.
Around 100 hospitals in Iowa, including MercyOne and Iowa Methodist Medical Center, take advantage of the federal 340B discount drug program. Mercy and Iowa Methodist also benefit from charging hospital facility fees, according to the Iowa Hospital Association.
Groups like the Iowa Primary Care Association and Iowa Hospital Association have said the 340B program offers vital funding to hospitals, buffering them against rising prescription costs, subsidizing emergency services and funding care for uninsured and underinsured patients.
That revenue comes to hospitals with few strings attached. Studies, policymakers and advocacy groups have raised concerns about oversight, transparency and accountability.
The $100 billion program also triggers higher health care costs, according to the U.S. Government Accountability Office. The Congressional Budget Office has found it encourages hospitals and providers to prescribe more drugs or select higher-cost medicines, and feed the shift of patient treatments toward more expensive hospital-owned facilities.
Concerns about its runaway growth spurred a bipartisan congressional group this summer to back legislation to revamp the system, including the SECURE 340B Act and the 340B Drug Pricing Integrity and Affordability for Patients Act.
Mission co-founder laments higher costs
Dr. Bob Shreck, a retired co-founder of Mission Cancer + Blood who did not benefit financially from its sale, said the higher facility fee charges under UIHC ownership for consultations, lab studies and the administration of chemotherapy drugs dramatically raise costs to insurers.
“Even if a private health insurance company elects to cover these charges, they then are forced to raise premium rates for everyone to cover the cost and risk, raising the cost of health insurance coverage statewide,” he said in a statement.
UIHC CEO Bradley Haws has contended Mission’s billing practices and facility fees are “not discretionary pricing decisions.”
“They are the result of federally established billing regulations that govern hospital-based outpatient departments across the nation. As an integrated hospital health system, UI Health Care, along with UnityPoint and MercyOne, are required to bill these services under the applicable federal framework,” he wrote in a letter to the governor in July.
But Shreck said outpatient clinics UIHC runs are not required to charge facility fees and have the option of forgoing them. “We should certainly encourage UIHC to do so,” he said.
When it comes to the facility fees, states have often taken the lead in making changes. About 20 states have enacted legislation to bring more restraint to outpatient facility fee billing, according to research at Georgetown University.
In July, the Centers for Medicare and Medicaid Services proposed a rule that would require site-neutral payments for some imaging services and slash Medicare payment rates for the discount drug program.
The Trump administration has pushed to rework the federal 340B drug discount program and better equalize payments between sites of care. CMS Administrator Dr. Mehmet Oz said the rule change, which, if approved, would go into effect in 2027, aligning drug payments with actual acquisition costs and removing site-of-care disparities that drive up costs for millions of seniors.
The higher costs Mission patients have faced in the last year have caused some to look elsewhere.
Ben Vallier, CEO of The Iowa Clinic, the metro’s only remaining independent multispecialty provider, said it has gained former Mission oncology and infusion patients.
Independent physician practices operate under a fundamentally different model than hospital-owned health systems, he said in a statement: “We do not charge hospital facility fees, and our focus is on delivering high-quality, coordinated care in the most appropriate and cost-effective setting for the patient.”
“Hospitals remain essential for patients who need emergency stabilization and inpatient care, but they do not need to be the default pathway when safe, high-quality care can be provided elsewhere,” Vallier said.
“Higher reimbursement for hospital-based services creates a financial incentive to keep care within higher cost hospital settings,” he said. “Hospital-owned health systems can participate in the same general types of value-based payment arrangements as The Iowa Clinic. However, changing established clinical pathways requires time, investment, and coordination across multiple services.”
Angry about their bills, patients go elsewhere
At least for a few months this year, Des Moines breast cancer survivor Judy Quick refused to pay her higher Mission bill.
Quick, 68, used to have a $67 copay for blood work and an office visit at Mission. This year, she was charged more than $704 for her blood test and $290 for the visit with her oncologist. And her insurer, Aetna, paid even more.
“It’s outrageous charging me that much for lab work,” she said.
She has since transferred her care to The Iowa Clinic.
Day also has refused to pay his higher Mission bills ― but he found a workaround, at least temporarily.
After he started receiving the much higher bills from UIHC last summer, he discovered an apparent loophole in its billing system that lowered his cost.
Today, he still gets blood drawn at the Mission location on Laurel Street in Des Moines, but he travels to another Mission clinic for his Lupron injections and office visits.
There, he said, he only has a co-pay, like he used to, and no hospital fees.
He knows some people can’t make that longer drive several times a year.
And that goes back to the question he has about the kind of statewide cancer network UIHC is creating.
“Are you really taking care of your patients if people have to do that?” he asked.
Lee Rood is an investigative reporter and editor who created the Reader’s Watchdog column in 2012 to find answers and accountability for readers on a range of topics, from public officials, the justice system, businesses and nonprofits. Reach her at lrood@registermedia.com, at 515-284-8549, on X at @leerood or on Facebook at Facebook.com/readerswatchdog.