Jefferson’s turf war with Northeast Philly cancer doctors is ‘aggressive,’ experts say

For decades, doctors at Alliance Cancer Specialists provided well-regarded care to the community served by Torresdale Hospital in Northeast Philadelphia.

Alliance’s founder, Allen Terzian, helped bring radiation therapy to the hospital and leased space there for an infusion center for more than 25 years.

Then Thomas Jefferson University acquired Torresdale, as it expanded across the Philadelphia region. Jefferson wanted to buy Alliance shortly after the 2016 hospital acquisition, but Terzian said he and his partners declined.

This past summer, their relationship with Jefferson soured to the point that Jefferson revoked their right to admit and treat cancer patients at Torresdale. In response, the oncology practice filed an antitrust lawsuit that has drawn national attention for raising concerns about how far a hospital system can go in exercising its market power.

Jefferson said it was restricting cancer care at Torresdale to its own doctors to ensure “continuity of high-quality care.”

To Terzian and his colleagues, losing their ability to admit and treat cancer patients at Torresdale “is literally the opposite of continuity of care. They are destroying it,” Terzian testified in September during a federal court hearing in the case.

A federal judge sided with Jefferson, finding Alliance’s antitrust claims “lifeless.” Terzian and his partners lost their oncology-hematology privileges at Torresdale on Sept 16.

Caught in the middle are such patients as Michelle Innamorato’s 84-year-old mother, who has seen the same doctor at Alliance Cancer Specialists for a decade. She doesn’t want anyone other than that doctor, Moshe Chasky, to treat her mother at the hospital.

Now she fears that her mother will not have continuity of care at all.

“God forbid something would happen to my mom, and my mom had to be admitted into the hospital,” she said. “I think it’s doing a disservice to his patients overall.”

The Torresdale battle reflects turf wars between health systems and outside physicians over the control of patients — and the insurance payments that go with them. Still, Jefferson’s decision to block a practice that has been in the neighborhood for decades is particularly stark, experts said.

“That’s a very aggressive example of a hospital using its leverage,” said David Eagle, a New York oncologist who is also board vice president of a new advocacy group, the American Independent Medical Practice Association.

Hospitals have historically welcomed outside physicians as part of their medical staffs, but increasingly some are choosing to be more restrictive in certain specialties, such as cancer, said Dan Grauman, chief executive of Veralon, a Philadelphia health-care consulting firm.

“The treatment of cancer is an evolving area where treatment guidelines and protocols are constantly being revised, and it can be more difficult for hospitals to get independent physicians to agree and follow those same guidelines or protocols,” Grauman said.

At Torresdale, the care provided by Alliance doctors was considered top-notch, according to a veteran Jefferson primary care physician, who declined to be quoted by name because he was not authorized to speak publicly about his employer.

Jefferson Health Northeast, which includes Frankford, Torresdale, and Bucks County Hospitals, is the only part of the system of 13 acute care hospitals where outside oncologists have been shut out. That hasn’t even happened at Jefferson’s flagship academic center, Thomas Jefferson University Hospital in Center City.

It is unusual to see such a restriction at a community hospital, though not at academic centers.

The region’s leader in cancer care, the University of Pennsylvania Health System, restricts medical staff at its flagship teaching hospital, the Hospital of the University of Pennsylvania, to physicians with academic appointments, but Penn’s five other hospitals have outside oncologists on staff.

The arrangements across Philadelphia-area cancer centers vary. Temple’s Fox Chase Cancer Center has some outside oncologists on staff, but 90% of the care is provided by employed physicians, according to a bond filing. Cooper University Health Care’s contract with the M.D. Anderson Cancer Center requires all of Cooper’s oncologists to be employed.

Jefferson’s decision to exclude Alliance Cancer Specialists in favor of its employed Sidney Kimmel Cancer Center doctors makes sense for its business, experts say, especially at a time when Jefferson is struggling to make the finances work after its massive expansion from three to 18 hospitals.

Oncology is a lucrative segment of health care for hospitals and doctors because of its heavy reliance on high-cost chemotherapy and other drugs, the significant imaging needed to diagnose and monitor tumors, and surgeries to remove them, if necessary. Health systems want to keep as much of that business as possible.

In addition, a national drug discount program designed to strengthen safety-net hospitals — known as 340B — is a big factor in the financial importance of oncology to health systems, said Lawton R. Burns, a professor of health care management at the University of Pennsylvania’s Wharton School.

“That’s one of the few places where hospitals make money,” he said.

The savings, which can run up to 50% on some drugs, are not available to a physician group such as Alliance, which is not eligible for the 340B program.

The three Jefferson Northeast hospitals, including Torresdale, which operate under one license, became 340B hospitals in 2017, after Thomas Jefferson University acquired them, according to federal records. Jefferson did not respond to a request for details on how much money it saves through 340B.

Another financial reason for health systems to keep physician work in-house is that Medicare and private insurance pay hospitals significantly more for outpatient treatments than outside physician offices for the same services, experts said.

Torresdale Hospital opened in far Northeast Philadelphia in 1977 as a second location for Frankford Hospital, which was in an older part of the city. As a traditional community hospital, Torresdale relied heavily on outside specialists.

Among those specialists was Terzian, an oncologist who has practiced in Northeast Philadelphia for 35 years and is now president of Alliance. Terzian and his partners brought radiation therapy to Torresdale and built a substantial oncology practice through their relationship with the University of Pennsylvania, according to a court filing.

When Jefferson acquired Torresdale, Terzian was chief of oncology and Alliance’s center there had 18 chemotherapy chairs.

As the relationship between Jefferson and Alliance deteriorated, Jefferson canceled Alliance’s 25-year-old lease and evicted the practice in 2020 as the COVID-19 pandemic was starting. “We knew it was coming. We were able to buy a building and put in a cancer center,” Terzian said.

That new center, opened in December 2020, has 27 infusion chairs.

Jefferson, meanwhile, announced in February 2021 that it was opening a Sidney Kimmel Cancer Center location in unused space at Torresdale. Jefferson declined to say how much it spent on the center.

The final touch on that project is currently under construction: a canopy from the drop-off point to the entrance.

Even after Jefferson opened the Kimmel Cancer Center at Torresdale, in-house doctors continued referring cancer patients to Alliance, according to the practice’s legal filings.

But Jefferson started requiring its in-house doctors to fill out a form any time they referred a patient to a non-Jefferson physician explaining why. If doctors didn’t comply, they could lose part of their bonus, according to a copy of the fiscal 2023 incentive plan obtained by The Inquirer.

Finally, in late July, Jefferson sent Alliance a letter saying that the doctors would lose their privileges this fall, because the system decided to allow only its employed doctors to practice oncology at Jefferson Health Northeast.

Now, if an Alliance patient is hospitalized, Terzian and the other Alliance doctors can visit, but not much else.

Terzian described what it’s like now when a longtime patient in declining health is admitted to Torresdale on the Oct. 31 episode of Healthcare Unfiltered, a national podcast about medical issues aimed at physicians.

There has to be a discussion with the family members he has come to know about appropriate care, how aggressively to treat the patient, and whether hospice is appropriate for end-of-life care.

“That discussion will go on without you present, with people who don’t know the patient, who don’t know the family. It’s disgraceful,” he said.