February 2013 Edition Vol.11, Issue 2
On October 11-12, 2012, oncology leaders gathered at the 2012 Cancer Center Business Summit at the Worthington Renaissance Hotel in Fort Worth, Texas. The Summit is a unique event focused on business innovations in community oncology. It is a forum that considers business, legal, reimbursement and market developments; and spotlights some of the most advanced thinking of industry leaders about emerging best models and practices for succeeding in the rapidly evolving marketplace for community-based cancer care. The theme of the 2012 Summit was Transitioning to Value Based Oncology: Strategies to Survive and Thrive. Following are Mr. Blau’s opening remarks, and a summary of options he outlined for community oncologists to remain independent in the evolving world of ACOs, medical homes, and risk-based payment arrangements.
The time has come to seriously re-examine our fragmented, expensive healthcare system and to innovate sustainable ways to cure its ills. Most healthcare executives are heeding this message. Their offices today are replete with talk of bold initiatives to re-imagine, re-design and re-build our system of “sick” care into the population health management system of the future. Community oncology also has the opportunity to make a significant contribution toward this goal by curbing variability and overutilization of cancer drugs and therapies; by changing physician incentives to select the most cost-effective treatments rather than the most profitable ones; by pro-actively monitoring patients to avoid ED visits and hospital admissions; and by eliminating futile end-of life services. If these things are done well, community oncology should have the opportunity to share in the resulting cost savings.
The pace for the change to population health management and value-based cancer care is unprecedented—and, there is a growing sense of urgency that the stakes are high, resources are constrained, and that the right investments need to be made now, before opportunities disappear or are claimed by others. The prospect of change of this magnitude can be exhilarating, innovative, and it can create new opportunities. But, it can also be unsettling. That is what many in community oncology report feeling today. They are concerned about reimbursement reductions for chemotherapy, radiation therapy and imaging; reduction in demand for elective services due to increased patient co-pays; being excluded from payer contracting networks because of the relatively high cost of oncology care; and losing referral sources as primary care physicians and other specialists align with specific networks. Other factors include the pressure to give up their practice autonomy and become employees of hospitals, strong multi-specialty groups or health systems; shift to use of mid-level providers practicing at the top of their license; whether payers will pay for the transformation to value-based care and personalized medicine or for new state-of-the-art drugs and technologies; and finally, the projected reduction in need for oncology care under stringent managed care systems that incent lower specialist utilization rates.
In the face of all these challenges, some community-based oncologists want to know what strategic options they have to remain independent, and to survive and thrive during the transition to the population health management system of tomorrow. At the Summit, we explored many options oncologists can consider, and their respective business, legal, and technological hurdles and challenges, as well their pros and cons, and costs. The following are some of the strategic options considered at the Summit:
At this important moment in healthcare, when so much is in flux, and new business models and solutions abound, the oncology sector has a solemn responsibility to really try hard to get it right—to forge the business models and relationships that will help define a new cancer care value proposition, and a sustainable healthcare system for the benefit of the patients it serves.
Michael L. Blau, Esq. is the Chair of the Industry Teams, including the Health Care Industry Team, at Foley & Lardner LLP, and is a Co-Founder and Co-Host of the Cancer Center Business Summit. He can be contacted at mblau@foley.com. Further information about the Cancer Center Business Summit is available at www.cancerbusinesssummit.com.Transitioning to Value Based Oncology: Strategies to Survive and Thrive
Transitioning to Value Based Oncology:
Strategies to Survive and Thrive
By Michael L. Blau, Esq.
Changes are transforming the healthcare landscape. These changes are being driven by the economy; and some would say, the social and moral imperative to reduce the unsustainable rate of growth of healthcare spending in this country. These costs make the United States the most expensive healthcare system in the world, and make healthcare unaffordable or inaccessible for far too many Americans. Oncology is responsible for its fair share of these rising costs accounting for up to 10% of all healthcare expenditures by some estimates. In addition, oncology costs are growing faster than many other healthcare components due to expensive new drugs, expensive new molecular diagnostics, and expensive new robotic technologies and therapeutic technologies, like proton beam therapy.
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