Independence Versus Survival

OncLive Chairman,

Mike Hennessy

It can be tough running a community-based oncology practice. Hospitals are expanding their oncology operations, there is a shortage of oncologists—particularly business-minded oncologists—and public and private payers have made it more difficult to get paid. Some practices find a way to overcome these obstacles, and some do not. Indeed, according to the Community Oncology Alliance, 380 community clinics have closed and 609 practices have been acquired by hospitals since 2008.

For an Albuquerque, New Mexico, practice with 40 years of community involvement, this year spelled its last as an independent. Hematology Oncology Associates was bugeted by every adverse condition mentioned above—and then some. The practice members cannot be faulted for lack of innovation or grit. Even in the past 2 years, they had joined the Oncology Care Model (OCM) from CMS—an indication of their resolve to keep up with the times. But that only added to their information technology expense. It also added complexity as the practice struggled toward off fierce competition from local hospital systems. And there were still many other challenges to making it in a rapidly changing marketplace.

The end solution was one in which the practice lost its independent status, although its hard- working administrators managed to retain employment for a large proportion of their staff and obtain payment for much of their asset base. They merged with a hospital—a decision unpalatable to many physicians but one that proved to be the invention that came from necessity.

This month, Oncology Business Management^TM (OBM) is pleased to include the reflections of Kari Young, CPA, former executive administrator for Hematology Oncology Associates, on the battle to remain independent. In her column, she discusses the numerous pressures that converged on the Albuquerque practice and how it responded. It is a fascinating account—a blow-by-blow description—of confrontation with numerous marketplace challenges that threatened to overwhelm the practice. Fortunately, the planners and decision makers were able to engineer a merger solution that took away their independence but gave them strength as part of a larger, dominant marketplace entity.

It is an account that will resonate with many oncologists and oncology administrators who have been through and may still be wrestling with these very same issues.

Until the OCM came along, practices were partially blind in their attempts to follow patients through the healthcare system. They didn’t know, for example, which outside clinics or hospitals their patients were visiting, and they didn’t know how much in care costs these ancillary care encounters were racking up. The OCM made practices responsible for failure to control unnecessary hospital admissions or use of emergency departments. Although CMS leaned hard on practices to supervise their patients’ care more closely and bring down costs of care, it gave them an effective tool to accomplish this.

Practices have begun to receive large deposits of Medicare claims data specific to their patients. This information may tell them, for example, that Patient A went to Hospital C over the weekend and received services for a de ned ailment in the amount of $5600. There is a lot a practice can do with that kind of information. They can tell whether they could have managed that condition themselves, whether their staff was on the ball in handling that patient, and whether the hospital made the right decision to admit.

This month’s OBM^TM is filled with much more insightful, helpful coverage of the oncology business environment. Thank you for reading!