Strategies for Fighting Consolidation in Community Oncology

April 5, 2019

At the Community Oncology Alliance's 2019 Community Oncology Conference in Orlando, Florida, a panel discussed strategies for practices to collaborate and survive the recent wave of consolidation. Targeting employers is one solution.

The grim data in the 2018 Community Oncology Alliance (COA) practice impact report tell the story: since 2008, a total of 1653 practices have closed, been acquired by hospitals, or are struggling financially. This continues, COA says, despite the fact that cancer care delivered in the community setting is less expensive than that in a hospital.

How can community oncology practices fight back?

“We need different solutions for the market today,” said Jeffrey Patton, MD, the chief executive officer of Tennessee Oncology, as he started the discussion late Thursday at COA’s 2019 Community Oncology Conference in Orlando, Florida.

Patton, 3 other oncologists, and a pharmacist shared ideas on how collaboration is the key to survival, as academic medical centers and large hospital systems encroach on turf that was once the domain of community oncology.

Edward Licitra, MD, PhD, the chief financial officer and director of revenue cycle of the central New Jersey division of Regional Cancer Care Associates (RCCA), described the battle for market share in the state, where Penn Medicine has affiliated with a health system as far north as Princeton, New Jersey, and a large cancer hospital affiliated with a new medical school in Camden now carries the MD Anderson brand.

The wave of “vertical integration” is different from prior rounds of consolidation, Licitra said. “Community oncology is a tremendous value for all the reasons that we know,” he said. “It has not even tapped its full potential” from a contracting perspective or a translational scientific perspective.

“In order for us to survive, we need to figure out how the right people can come together, to leverage the scale and also leverage the expertise,” Licitra said. “If we don’t do that, there is very little chance that we will be able to survive.”

Sibel Blau, MD, medical director of Northwest Medical Specialties, PLLC, said that community oncology is essential in helping the country hold down healthcare costs. But practices have to work together, because individually, “we don’t have enough of a voice,” she said. “Now, we’re getting together and doing this.”

Her practice joined a “supergroup” that converted to a clinically integrated network (CIN), which she said allows the practices to maintain its independence while sharing ideas and expertise and purchasing clout. As a group, the CIN practices have a stronger seat at the table with payers.

For too long, Blau said, physicians let others take care of business. “We let big companies, with big influence, take advantage of us,” she said. By creating models like the CIN, Blau said, community oncology can fight vertical integration.

Blau agreed with panelist Steven D’Amato, BScPharm, executive director of New England Cancer Specialists in Maine, that collaborations can take many different forms. While New Jersey-based RCCA decided 8 years ago to bring radiation oncology and surgery into the practice, D’Amato’s group instead formed an independent practice association with these specialists.

Health is so complex, D’Amato said, that “It’s very important to collaborate with like-minded groups with the same vision. These collaborations are necessary independence and quality and value proposition.”

Stephen Orman, MD, is pursuing yet another model. Now retired from clinical practice, he is serving as chair of the inaugural board of the American Oncology Network LLC, an alliance that provides administrative support and ancillary services to keep community practices independent. He spoke of the importance of having groups that are physician-centered, with “physician-driven goals.”

The Value to Employers

The panel discussed how community oncology practice could position themselves to an emerging group of stakeholders who, like themselves, seeks a stronger voice in healthcare: employers. As they see their costs rise, employers are getting more involved in benefit design and in selecting where their workers seek care. “Like anything else, it’s a process,” Licitra said. “It’s not easy to go to a large employer and say, ‘We should have all your cancer patients.’”

Instead, community oncologist clinics are demonstrating value by offering infusion services for non-oncology therapies and doing this better and less expensively than competitors. Once employers and patients see this, they remember the experience.

“Let’s not forget about data,” D’Amato said, and both Orman and Blau agreed that having good data to make the case is essential. “You have to be prepared to show them,” Blau said.

Licitra said learning to demonstrate value was a reason RCCA participated in every value-based program that emerged in New Jersey. “Not because every one is good—we just have a lot to learn,” he said. “we have to collect data and understand, ‘what are the levers that we can push and pull on that make a difference?’”

The value of community oncology is in the relationships, he said. Nothing can replace the ability to pick up the phone and speak directly with the radiation oncologist or specialist who will be seeing a patient, and once a practice gets folded into a large institution, that element is lost.

The Prepared Will Survive

While aspects of value-based care have been frustrating, Licitra said the shift away from fee-for-service has changed the way practices do business. “We have changed physician culture and behavior and that’s one of the most difficult things to do,” he said. “We had people in practice 25 years who never thought about the economic consequences of what they did.”

Patton asked how—or when—community oncology’s role as a low-cost, high-value provider will become evidence to payers and patients alike. D’Amato said he believes younger consumers are savvier and will shop for healthcare services differently than their parents.

As 340B reform occurs and hospitals lose revenue, even those systems that have tried to buy out community oncology practices will look to practices for guidance on how to manage healthcare dollars efficiently, the panelists predicted.

Licitra likened the state of healthcare to the mortgage market right before the 2008 crash: it was irrational for people without jobs to get financing, and eventually what did not make sense fell apart. Much of happens in healthcare today is irrational. “It doesn’t make sense, until it doesn’t make sense,” he said. “Healthcare is going to be very similar. When the bubble does pop, it will be the people who have prepared who will consolidate the market in the right way.”