User login
When he completed his fellowship at Fox Chase Cancer Center in Philadelphia, Moshe Chasky, MD, joined a small five-person practice that rented space from the city’s Jefferson Hospital in Philadelphia. The arrangement seemed to work well for the hospital and the small practice, which remained independent.
Within 10 years, the hospital sought to buy the practice, Alliance Cancer Specialists.
But the oncologists at Alliance did not want to join Jefferson.
The hospital eventually entered into an exclusive agreement with its own medical group to provide inpatient oncology/hematology services at three Jefferson Health–Northeast hospitals and stripped Dr. Chasky and his colleagues of their privileges at those facilities, Medscape Medical News reported last year.
said Jeff Patton, MD, CEO of OneOncology, a management services organization.
A 2020 report from the Community Oncology Alliance (COA), for instance, tracked mergers, acquisitions, and closures in the community oncology setting and found the number of practices acquired by hospitals, known as vertical integration, nearly tripled from 2010 to 2020.
“Some hospitals are pretty predatory in their approach,” Dr. Patton said. If hospitals have their own oncology program, “they’ll employ the referring doctors and then discourage them or prevent them from referring patients to our independent practices that are not owned by the hospital.”
Still, in the face of growing pressure to join hospitals, some community oncology practices are finding ways to survive and maintain their independence.
A Growing Trend
The latest data continue to show a clear trend: Consolidation in oncology is on the rise.
A 2024 study revealed that the pace of consolidation seems to be increasing.
The analysis found that, between 2015 and 2022, the number of medical oncologists increased by 14% and the number of medical oncologists per practice increased by 40%, while the number of practices decreased by 18%.
While about 44% of practices remain independent, the percentage of medical oncologists working in practices with more than 25 clinicians has increased from 34% in 2015 to 44% in 2022. By 2022, the largest 102 practices in the United States employed more than 40% of all medical oncologists.
“The rate of consolidation seems to be rapid,” study coauthor Parsa Erfani, MD, an internal medicine resident at Brigham & Women’s Hospital, Boston, explained.
Consolidation appears to breed more consolidation. The researchers found, for instance, that markets with greater hospital consolidation and more hospital beds per capita were more likely to undergo consolidation in oncology.
Consolidation may be higher in these markets “because hospitals or health systems are buying up oncology practices or conversely because oncology practices are merging to compete more effectively with larger hospitals in the area,” Dr. Erfani told this news organization.
Mergers among independent practices, known as horizontal integration, have also been on the rise, according to the 2020 COA report. These mergers can help counter pressures from hospitals seeking to acquire community practices as well as prevent practices and their clinics from closing.
Although Dr. Erfani’s research wasn’t designed to determine the factors behind consolidation, he and his colleagues point to the Affordable Care Act (ACA) and the federal 340B Drug Pricing Program as potential drivers of this trend.
The ACA encouraged consolidation as a way to improve efficiency and created the need for ever-larger information systems to collect and report quality data. But these data collection and reporting requirements have become increasingly difficult for smaller practices to take on.
The 340B Program, however, may be a bigger contributing factor to consolidation. Created in 1992, the 340B Program allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a 25%-50% discount.
Hospitals seeking to capitalize on the margins possible under the 340B Program will “buy all the referring physicians in a market so that the medical oncology group is left with little choice but to sell to the hospital,” said Dr. Patton.
“Those 340B dollars are worth a lot to hospitals,” said David A. Eagle, MD, a hematologist/oncologist with New York Cancer & Blood Specialists and past president of COA. The program “creates an appetite for nonprofit hospitals to want to grow their medical oncology programs,” he told this news organization.
Declining Medicare reimbursement has also hit independent practices hard.
Over the past 15 years, compared with inflation, physicians have gotten “a pay rate decrease from Medicare,” said Dr. Patton. Payers have followed that lead and tried to cut pay for clinicians, especially those who do not have market share, he said. Paying them less is “disingenuous knowing that our costs of providing care are going up,” he said.
Less Access, Higher Costs, Worse Care?
Many studies have demonstrated that, when hospitals become behemoths in a given market, healthcare costs go up.
“There are robust data showing that consolidation increases healthcare costs by reducing competition, including in oncology,” wrote Dr. Erfani and colleagues.
Oncology practices that are owned by hospitals bill facility fees for outpatient chemotherapy treatment, adding another layer of cost, the researchers explained, citing a 2019 Health Economics study.
Another analysis, published in 2020, found that hospital prices for the top 37 infused cancer drugs averaged 86% more per unit than the price charged by physician offices. Hospital outpatient departments charged even more, on average, for drugs — 128% more for nivolumab and 428% more for fluorouracil, for instance.
In their 2024 analysis, Dr. Erfani and colleagues also found that increased hospital market concentration was associated with worse quality of care, across all assessed patient satisfaction measures, and may result in worse access to care as well.
Overall, these consolidation “trends have important implications for cancer care cost, quality, and access,” the authors concluded.
Navigating the Consolidation Trend
In the face of mounting pressure to join hospitals, community oncology practices have typically relied on horizontal mergers to maintain their independence. An increasing number of practices, however, are now turning to another strategy: Management services organizations.
According to some oncologists, a core benefit of joining a management services organization is their community practices can maintain autonomy, hold on to referrals, and benefit from access to a wider network of peers and recently approved treatments such as chimeric antigen receptor T-cell therapies.
In these arrangements, the management company also provides business assistance to practices, including help with billing and collection, payer negotiations, supply chain issues, and credentialing, as well as recruiting, hiring, and marketing.
These management organizations, which include American Oncology Network, Integrated Oncology Network, OneOncology, and Verdi Oncology, are, however, backed by private equity. According to a 2022 report, private equity–backed management organizations have ramped up arrangements with community oncology practices over the past few years — a trend that has concerned some experts.
The authors of a recent analysis in JAMA Internal Medicine explained that, although private equity involvement in physician practices may enable operational efficiencies, “critics point to potential conflicts of interest” and highlight concerns that patients “may face additional barriers to both accessibility and affordability of care.”
The difference, according to some oncologists, is their practices are not owned by the management services organization; instead, the practices enter contracts that outline the boundaries of the relationship and stipulate fees to the management organizations.
In 2020, Dr. Chasky’s practice, Alliance Cancer Specialists, joined The US Oncology Network, a management services organization wholly owned by McKesson. The organization provides the practice with capital and other resources, as well as access to the Sarah Cannon Research Institute, so patients can participate in clinical trials.
“We totally function as an independent practice,” said Dr. Chasky. “We make our own management decisions,” he said. For instance, if Alliance wants to hire a new clinician, US Oncology helps with the recruitment. “But at the end of the day, it’s our practice,” he said.
Davey Daniel, MD — whose community practice joined the management services organization OneOncology — has seen the benefits of being part of a larger network. For instance, bispecific therapies for leukemias, lymphomas, and multiple myeloma are typically administered at academic centers because of the risk for cytokine release syndrome.
However, physician leaders in the OneOncology network “came up with a playbook on how to do it safely” in the community setting, said Dr. Daniel. “It meant that we were adopting FDA newly approved therapies in a very short course.”
Being able to draw from a wider pool of expertise has had other advantages. Dr. Daniel can lean on pathologists and research scientists in the network for advice on targeted therapy use. “We’re actually bringing precision medicine expertise to the community,” Dr. Daniel said.
Dr. Chasky and Dr. Eagle, whose practice is also part of OneOncology, said that continuing to work in the community setting has allowed them greater flexibility.
Dr. Eagle explained that New York Cancer & Blood Specialists tries to offer patients an appointment within 2 days of a referral, and it allows walk-in visits.
Dr. Chasky leans into the flexibility by having staff stay late, when needed, to ensure that all patients are seen. “We’re there for our patients at all hours,” Dr. Chasky said, adding that often “you don’t have that flexibility when you work for a big hospital system.”
The bottom line is community oncology can still thrive, said Nick Ferreyros, managing director of COA, “as long as we have a healthy competitive ecosystem where [we] are valued and seen as an important part of our cancer care system.”
A version of this article first appeared on Medscape.com.
When he completed his fellowship at Fox Chase Cancer Center in Philadelphia, Moshe Chasky, MD, joined a small five-person practice that rented space from the city’s Jefferson Hospital in Philadelphia. The arrangement seemed to work well for the hospital and the small practice, which remained independent.
Within 10 years, the hospital sought to buy the practice, Alliance Cancer Specialists.
But the oncologists at Alliance did not want to join Jefferson.
The hospital eventually entered into an exclusive agreement with its own medical group to provide inpatient oncology/hematology services at three Jefferson Health–Northeast hospitals and stripped Dr. Chasky and his colleagues of their privileges at those facilities, Medscape Medical News reported last year.
said Jeff Patton, MD, CEO of OneOncology, a management services organization.
A 2020 report from the Community Oncology Alliance (COA), for instance, tracked mergers, acquisitions, and closures in the community oncology setting and found the number of practices acquired by hospitals, known as vertical integration, nearly tripled from 2010 to 2020.
“Some hospitals are pretty predatory in their approach,” Dr. Patton said. If hospitals have their own oncology program, “they’ll employ the referring doctors and then discourage them or prevent them from referring patients to our independent practices that are not owned by the hospital.”
Still, in the face of growing pressure to join hospitals, some community oncology practices are finding ways to survive and maintain their independence.
A Growing Trend
The latest data continue to show a clear trend: Consolidation in oncology is on the rise.
A 2024 study revealed that the pace of consolidation seems to be increasing.
The analysis found that, between 2015 and 2022, the number of medical oncologists increased by 14% and the number of medical oncologists per practice increased by 40%, while the number of practices decreased by 18%.
While about 44% of practices remain independent, the percentage of medical oncologists working in practices with more than 25 clinicians has increased from 34% in 2015 to 44% in 2022. By 2022, the largest 102 practices in the United States employed more than 40% of all medical oncologists.
“The rate of consolidation seems to be rapid,” study coauthor Parsa Erfani, MD, an internal medicine resident at Brigham & Women’s Hospital, Boston, explained.
Consolidation appears to breed more consolidation. The researchers found, for instance, that markets with greater hospital consolidation and more hospital beds per capita were more likely to undergo consolidation in oncology.
Consolidation may be higher in these markets “because hospitals or health systems are buying up oncology practices or conversely because oncology practices are merging to compete more effectively with larger hospitals in the area,” Dr. Erfani told this news organization.
Mergers among independent practices, known as horizontal integration, have also been on the rise, according to the 2020 COA report. These mergers can help counter pressures from hospitals seeking to acquire community practices as well as prevent practices and their clinics from closing.
Although Dr. Erfani’s research wasn’t designed to determine the factors behind consolidation, he and his colleagues point to the Affordable Care Act (ACA) and the federal 340B Drug Pricing Program as potential drivers of this trend.
The ACA encouraged consolidation as a way to improve efficiency and created the need for ever-larger information systems to collect and report quality data. But these data collection and reporting requirements have become increasingly difficult for smaller practices to take on.
The 340B Program, however, may be a bigger contributing factor to consolidation. Created in 1992, the 340B Program allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a 25%-50% discount.
Hospitals seeking to capitalize on the margins possible under the 340B Program will “buy all the referring physicians in a market so that the medical oncology group is left with little choice but to sell to the hospital,” said Dr. Patton.
“Those 340B dollars are worth a lot to hospitals,” said David A. Eagle, MD, a hematologist/oncologist with New York Cancer & Blood Specialists and past president of COA. The program “creates an appetite for nonprofit hospitals to want to grow their medical oncology programs,” he told this news organization.
Declining Medicare reimbursement has also hit independent practices hard.
Over the past 15 years, compared with inflation, physicians have gotten “a pay rate decrease from Medicare,” said Dr. Patton. Payers have followed that lead and tried to cut pay for clinicians, especially those who do not have market share, he said. Paying them less is “disingenuous knowing that our costs of providing care are going up,” he said.
Less Access, Higher Costs, Worse Care?
Many studies have demonstrated that, when hospitals become behemoths in a given market, healthcare costs go up.
“There are robust data showing that consolidation increases healthcare costs by reducing competition, including in oncology,” wrote Dr. Erfani and colleagues.
Oncology practices that are owned by hospitals bill facility fees for outpatient chemotherapy treatment, adding another layer of cost, the researchers explained, citing a 2019 Health Economics study.
Another analysis, published in 2020, found that hospital prices for the top 37 infused cancer drugs averaged 86% more per unit than the price charged by physician offices. Hospital outpatient departments charged even more, on average, for drugs — 128% more for nivolumab and 428% more for fluorouracil, for instance.
In their 2024 analysis, Dr. Erfani and colleagues also found that increased hospital market concentration was associated with worse quality of care, across all assessed patient satisfaction measures, and may result in worse access to care as well.
Overall, these consolidation “trends have important implications for cancer care cost, quality, and access,” the authors concluded.
Navigating the Consolidation Trend
In the face of mounting pressure to join hospitals, community oncology practices have typically relied on horizontal mergers to maintain their independence. An increasing number of practices, however, are now turning to another strategy: Management services organizations.
According to some oncologists, a core benefit of joining a management services organization is their community practices can maintain autonomy, hold on to referrals, and benefit from access to a wider network of peers and recently approved treatments such as chimeric antigen receptor T-cell therapies.
In these arrangements, the management company also provides business assistance to practices, including help with billing and collection, payer negotiations, supply chain issues, and credentialing, as well as recruiting, hiring, and marketing.
These management organizations, which include American Oncology Network, Integrated Oncology Network, OneOncology, and Verdi Oncology, are, however, backed by private equity. According to a 2022 report, private equity–backed management organizations have ramped up arrangements with community oncology practices over the past few years — a trend that has concerned some experts.
The authors of a recent analysis in JAMA Internal Medicine explained that, although private equity involvement in physician practices may enable operational efficiencies, “critics point to potential conflicts of interest” and highlight concerns that patients “may face additional barriers to both accessibility and affordability of care.”
The difference, according to some oncologists, is their practices are not owned by the management services organization; instead, the practices enter contracts that outline the boundaries of the relationship and stipulate fees to the management organizations.
In 2020, Dr. Chasky’s practice, Alliance Cancer Specialists, joined The US Oncology Network, a management services organization wholly owned by McKesson. The organization provides the practice with capital and other resources, as well as access to the Sarah Cannon Research Institute, so patients can participate in clinical trials.
“We totally function as an independent practice,” said Dr. Chasky. “We make our own management decisions,” he said. For instance, if Alliance wants to hire a new clinician, US Oncology helps with the recruitment. “But at the end of the day, it’s our practice,” he said.
Davey Daniel, MD — whose community practice joined the management services organization OneOncology — has seen the benefits of being part of a larger network. For instance, bispecific therapies for leukemias, lymphomas, and multiple myeloma are typically administered at academic centers because of the risk for cytokine release syndrome.
However, physician leaders in the OneOncology network “came up with a playbook on how to do it safely” in the community setting, said Dr. Daniel. “It meant that we were adopting FDA newly approved therapies in a very short course.”
Being able to draw from a wider pool of expertise has had other advantages. Dr. Daniel can lean on pathologists and research scientists in the network for advice on targeted therapy use. “We’re actually bringing precision medicine expertise to the community,” Dr. Daniel said.
Dr. Chasky and Dr. Eagle, whose practice is also part of OneOncology, said that continuing to work in the community setting has allowed them greater flexibility.
Dr. Eagle explained that New York Cancer & Blood Specialists tries to offer patients an appointment within 2 days of a referral, and it allows walk-in visits.
Dr. Chasky leans into the flexibility by having staff stay late, when needed, to ensure that all patients are seen. “We’re there for our patients at all hours,” Dr. Chasky said, adding that often “you don’t have that flexibility when you work for a big hospital system.”
The bottom line is community oncology can still thrive, said Nick Ferreyros, managing director of COA, “as long as we have a healthy competitive ecosystem where [we] are valued and seen as an important part of our cancer care system.”
A version of this article first appeared on Medscape.com.
When he completed his fellowship at Fox Chase Cancer Center in Philadelphia, Moshe Chasky, MD, joined a small five-person practice that rented space from the city’s Jefferson Hospital in Philadelphia. The arrangement seemed to work well for the hospital and the small practice, which remained independent.
Within 10 years, the hospital sought to buy the practice, Alliance Cancer Specialists.
But the oncologists at Alliance did not want to join Jefferson.
The hospital eventually entered into an exclusive agreement with its own medical group to provide inpatient oncology/hematology services at three Jefferson Health–Northeast hospitals and stripped Dr. Chasky and his colleagues of their privileges at those facilities, Medscape Medical News reported last year.
said Jeff Patton, MD, CEO of OneOncology, a management services organization.
A 2020 report from the Community Oncology Alliance (COA), for instance, tracked mergers, acquisitions, and closures in the community oncology setting and found the number of practices acquired by hospitals, known as vertical integration, nearly tripled from 2010 to 2020.
“Some hospitals are pretty predatory in their approach,” Dr. Patton said. If hospitals have their own oncology program, “they’ll employ the referring doctors and then discourage them or prevent them from referring patients to our independent practices that are not owned by the hospital.”
Still, in the face of growing pressure to join hospitals, some community oncology practices are finding ways to survive and maintain their independence.
A Growing Trend
The latest data continue to show a clear trend: Consolidation in oncology is on the rise.
A 2024 study revealed that the pace of consolidation seems to be increasing.
The analysis found that, between 2015 and 2022, the number of medical oncologists increased by 14% and the number of medical oncologists per practice increased by 40%, while the number of practices decreased by 18%.
While about 44% of practices remain independent, the percentage of medical oncologists working in practices with more than 25 clinicians has increased from 34% in 2015 to 44% in 2022. By 2022, the largest 102 practices in the United States employed more than 40% of all medical oncologists.
“The rate of consolidation seems to be rapid,” study coauthor Parsa Erfani, MD, an internal medicine resident at Brigham & Women’s Hospital, Boston, explained.
Consolidation appears to breed more consolidation. The researchers found, for instance, that markets with greater hospital consolidation and more hospital beds per capita were more likely to undergo consolidation in oncology.
Consolidation may be higher in these markets “because hospitals or health systems are buying up oncology practices or conversely because oncology practices are merging to compete more effectively with larger hospitals in the area,” Dr. Erfani told this news organization.
Mergers among independent practices, known as horizontal integration, have also been on the rise, according to the 2020 COA report. These mergers can help counter pressures from hospitals seeking to acquire community practices as well as prevent practices and their clinics from closing.
Although Dr. Erfani’s research wasn’t designed to determine the factors behind consolidation, he and his colleagues point to the Affordable Care Act (ACA) and the federal 340B Drug Pricing Program as potential drivers of this trend.
The ACA encouraged consolidation as a way to improve efficiency and created the need for ever-larger information systems to collect and report quality data. But these data collection and reporting requirements have become increasingly difficult for smaller practices to take on.
The 340B Program, however, may be a bigger contributing factor to consolidation. Created in 1992, the 340B Program allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a 25%-50% discount.
Hospitals seeking to capitalize on the margins possible under the 340B Program will “buy all the referring physicians in a market so that the medical oncology group is left with little choice but to sell to the hospital,” said Dr. Patton.
“Those 340B dollars are worth a lot to hospitals,” said David A. Eagle, MD, a hematologist/oncologist with New York Cancer & Blood Specialists and past president of COA. The program “creates an appetite for nonprofit hospitals to want to grow their medical oncology programs,” he told this news organization.
Declining Medicare reimbursement has also hit independent practices hard.
Over the past 15 years, compared with inflation, physicians have gotten “a pay rate decrease from Medicare,” said Dr. Patton. Payers have followed that lead and tried to cut pay for clinicians, especially those who do not have market share, he said. Paying them less is “disingenuous knowing that our costs of providing care are going up,” he said.
Less Access, Higher Costs, Worse Care?
Many studies have demonstrated that, when hospitals become behemoths in a given market, healthcare costs go up.
“There are robust data showing that consolidation increases healthcare costs by reducing competition, including in oncology,” wrote Dr. Erfani and colleagues.
Oncology practices that are owned by hospitals bill facility fees for outpatient chemotherapy treatment, adding another layer of cost, the researchers explained, citing a 2019 Health Economics study.
Another analysis, published in 2020, found that hospital prices for the top 37 infused cancer drugs averaged 86% more per unit than the price charged by physician offices. Hospital outpatient departments charged even more, on average, for drugs — 128% more for nivolumab and 428% more for fluorouracil, for instance.
In their 2024 analysis, Dr. Erfani and colleagues also found that increased hospital market concentration was associated with worse quality of care, across all assessed patient satisfaction measures, and may result in worse access to care as well.
Overall, these consolidation “trends have important implications for cancer care cost, quality, and access,” the authors concluded.
Navigating the Consolidation Trend
In the face of mounting pressure to join hospitals, community oncology practices have typically relied on horizontal mergers to maintain their independence. An increasing number of practices, however, are now turning to another strategy: Management services organizations.
According to some oncologists, a core benefit of joining a management services organization is their community practices can maintain autonomy, hold on to referrals, and benefit from access to a wider network of peers and recently approved treatments such as chimeric antigen receptor T-cell therapies.
In these arrangements, the management company also provides business assistance to practices, including help with billing and collection, payer negotiations, supply chain issues, and credentialing, as well as recruiting, hiring, and marketing.
These management organizations, which include American Oncology Network, Integrated Oncology Network, OneOncology, and Verdi Oncology, are, however, backed by private equity. According to a 2022 report, private equity–backed management organizations have ramped up arrangements with community oncology practices over the past few years — a trend that has concerned some experts.
The authors of a recent analysis in JAMA Internal Medicine explained that, although private equity involvement in physician practices may enable operational efficiencies, “critics point to potential conflicts of interest” and highlight concerns that patients “may face additional barriers to both accessibility and affordability of care.”
The difference, according to some oncologists, is their practices are not owned by the management services organization; instead, the practices enter contracts that outline the boundaries of the relationship and stipulate fees to the management organizations.
In 2020, Dr. Chasky’s practice, Alliance Cancer Specialists, joined The US Oncology Network, a management services organization wholly owned by McKesson. The organization provides the practice with capital and other resources, as well as access to the Sarah Cannon Research Institute, so patients can participate in clinical trials.
“We totally function as an independent practice,” said Dr. Chasky. “We make our own management decisions,” he said. For instance, if Alliance wants to hire a new clinician, US Oncology helps with the recruitment. “But at the end of the day, it’s our practice,” he said.
Davey Daniel, MD — whose community practice joined the management services organization OneOncology — has seen the benefits of being part of a larger network. For instance, bispecific therapies for leukemias, lymphomas, and multiple myeloma are typically administered at academic centers because of the risk for cytokine release syndrome.
However, physician leaders in the OneOncology network “came up with a playbook on how to do it safely” in the community setting, said Dr. Daniel. “It meant that we were adopting FDA newly approved therapies in a very short course.”
Being able to draw from a wider pool of expertise has had other advantages. Dr. Daniel can lean on pathologists and research scientists in the network for advice on targeted therapy use. “We’re actually bringing precision medicine expertise to the community,” Dr. Daniel said.
Dr. Chasky and Dr. Eagle, whose practice is also part of OneOncology, said that continuing to work in the community setting has allowed them greater flexibility.
Dr. Eagle explained that New York Cancer & Blood Specialists tries to offer patients an appointment within 2 days of a referral, and it allows walk-in visits.
Dr. Chasky leans into the flexibility by having staff stay late, when needed, to ensure that all patients are seen. “We’re there for our patients at all hours,” Dr. Chasky said, adding that often “you don’t have that flexibility when you work for a big hospital system.”
The bottom line is community oncology can still thrive, said Nick Ferreyros, managing director of COA, “as long as we have a healthy competitive ecosystem where [we] are valued and seen as an important part of our cancer care system.”
A version of this article first appeared on Medscape.com.
<!--$RCSfile: InCopy_agile.xsl,v $ $Revision: 1.35 $-->
<!--$RCSfile: drupal.xsl,v $ $Revision: 1.7 $-->
<root generator="drupal.xsl" gversion="1.7"> <header> <fileName>168538</fileName> <TBEID>0C050BC9.SIG</TBEID> <TBUniqueIdentifier>MD_0C050BC9</TBUniqueIdentifier> <newsOrJournal>News</newsOrJournal> <publisherName>Frontline Medical Communications</publisherName> <storyname/> <articleType>2</articleType> <TBLocation>QC Done-All Pubs</TBLocation> <QCDate>20240625T133917</QCDate> <firstPublished>20240625T134638</firstPublished> <LastPublished>20240625T134638</LastPublished> <pubStatus qcode="stat:"/> <embargoDate/> <killDate/> <CMSDate>20240625T134638</CMSDate> <articleSource/> <facebookInfo/> <meetingNumber/> <byline>Alicia Ault</byline> <bylineText>ALICIA AULT</bylineText> <bylineFull>ALICIA AULT</bylineFull> <bylineTitleText/> <USOrGlobal/> <wireDocType/> <newsDocType>News</newsDocType> <journalDocType/> <linkLabel/> <pageRange/> <citation/> <quizID/> <indexIssueDate/> <itemClass qcode="ninat:text"/> <provider qcode="provider:imng"> <name>IMNG Medical Media</name> <rightsInfo> <copyrightHolder> <name>Frontline Medical News</name> </copyrightHolder> <copyrightNotice>Copyright (c) 2015 Frontline Medical News, a Frontline Medical Communications Inc. company. All rights reserved. This material may not be published, broadcast, copied, or otherwise reproduced or distributed without the prior written permission of Frontline Medical Communications Inc.</copyrightNotice> </rightsInfo> </provider> <abstract/> <metaDescription>The Alliance story is a familiar one for independent community oncology practices,</metaDescription> <articlePDF/> <teaserImage/> <teaser>The number of community practices acquired by hospitals nearly tripled from 2010 to 2020, according to a report from COA.</teaser> <title>Oncology Mergers Are on the Rise. How Can Independent Practices Survive?</title> <deck/> <disclaimer/> <AuthorList/> <articleURL/> <doi/> <pubMedID/> <publishXMLStatus/> <publishXMLVersion>1</publishXMLVersion> <useEISSN>0</useEISSN> <urgency/> <pubPubdateYear/> <pubPubdateMonth/> <pubPubdateDay/> <pubVolume/> <pubNumber/> <wireChannels/> <primaryCMSID/> <CMSIDs/> <keywords/> <seeAlsos/> <publications_g> <publicationData> <publicationCode>oncr</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>pn</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>ob</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>chph</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>endo</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>fp</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>im</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>hemn</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>skin</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> </publicationData> <publicationData> <publicationCode>nr</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> <journalTitle>Neurology Reviews</journalTitle> <journalFullTitle>Neurology Reviews</journalFullTitle> <copyrightStatement>2018 Frontline Medical Communications Inc.,</copyrightStatement> </publicationData> <publicationData> <publicationCode>mdsurg</publicationCode> <pubIssueName/> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> <journalTitle/> <journalFullTitle/> <copyrightStatement>2018 Frontline Medical Communications Inc.,</copyrightStatement> </publicationData> <publicationData> <publicationCode>GIHOLD</publicationCode> <pubIssueName>January 2014</pubIssueName> <pubArticleType/> <pubTopics/> <pubCategories/> <pubSections/> <journalTitle/> <journalFullTitle/> <copyrightStatement/> </publicationData> </publications_g> <publications> <term canonical="true">31</term> <term>25</term> <term>23</term> <term>6</term> <term>34</term> <term>15</term> <term>21</term> <term>18</term> <term>13</term> <term>22</term> <term>52226</term> </publications> <sections> <term canonical="true">27980</term> <term>39313</term> </sections> <topics> <term canonical="true">278</term> <term>31848</term> <term>292</term> <term>192</term> <term>198</term> <term>61821</term> <term>59244</term> <term>67020</term> <term>214</term> <term>217</term> <term>221</term> <term>238</term> <term>240</term> <term>242</term> <term>244</term> <term>39570</term> <term>27442</term> <term>256</term> <term>245</term> <term>271</term> <term>263</term> <term>210</term> <term>38029</term> <term>178</term> <term>179</term> <term>181</term> <term>59374</term> <term>196</term> <term>197</term> <term>37637</term> <term>233</term> <term>243</term> <term>250</term> <term>49434</term> <term>303</term> <term>340</term> </topics> <links/> </header> <itemSet> <newsItem> <itemMeta> <itemRole>Main</itemRole> <itemClass>text</itemClass> <title>Oncology Mergers Are on the Rise. How Can Independent Practices Survive?</title> <deck/> </itemMeta> <itemContent> <p>When he completed his fellowship at Fox Chase Cancer Center in Philadelphia, Moshe Chasky, MD, joined a small five-person practice that rented space from the city’s Jefferson Hospital in Philadelphia. The arrangement seemed to work well for the hospital and the small practice, which remained independent.</p> <p>Within 10 years, the hospital sought to buy the practice, <a href="https://alliancecancer.com/">Alliance Cancer Specialists</a>.<br/><br/>But the oncologists at Alliance did not want to join Jefferson.<br/><br/>The hospital eventually entered into an exclusive agreement with its own medical group to provide inpatient oncology/hematology services at three Jefferson Health–Northeast hospitals and stripped Dr. Chasky and his colleagues of their privileges at those facilities, <a href="https://www.medscape.com/viewarticle/997959">Medscape Medical News reported last year</a>.<br/><br/><span class="tag metaDescription">The Alliance story is a familiar one for independent community oncology practices,</span> said Jeff Patton, MD, CEO of OneOncology, a management services organization.<br/><br/>A <a href="https://mycoa.communityoncology.org/education-publications/practice-impact-reports/2020-community-oncology-alliance-practice-impact-report">2020 report</a> from the Community Oncology Alliance (COA), for instance, tracked mergers, acquisitions, and closures in the community oncology setting and found the number of practices acquired by hospitals, known as vertical integration, nearly tripled from 2010 to 2020.<br/><br/>“Some hospitals are pretty predatory in their approach,” Dr. Patton said. If hospitals have their own oncology program, “they’ll employ the referring doctors and then discourage them or prevent them from referring patients to our independent practices that are not owned by the hospital.”<br/><br/>Still, in the face of growing pressure to join hospitals, some community oncology practices are finding ways to survive and maintain their independence.<br/><br/></p> <h2>A Growing Trend</h2> <p>The latest data continue to show a clear trend: Consolidation in oncology is on the rise.</p> <p>A <a href="https://ascopubs.org/doi/10.1200/OP.23.00748">2024 study</a> revealed that the pace of consolidation seems to be increasing.<br/><br/>The analysis found that, between 2015 and 2022, the number of medical oncologists increased by 14% and the number of medical oncologists per practice increased by 40%, while the number of practices decreased by 18%.<br/><br/>While about 44% of practices remain independent, the percentage of medical oncologists working in practices with more than 25 clinicians has increased from 34% in 2015 to 44% in 2022. By 2022, the largest 102 practices in the United States employed more than 40% of all medical oncologists.<br/><br/>“The rate of consolidation seems to be rapid,” study coauthor Parsa Erfani, MD, <a href="https://www.codman.org/provider/parsa-erfani-md/">an internal medicine resident</a> at Brigham & Women’s Hospital, Boston, explained.<br/><br/>Consolidation appears to breed more consolidation. The researchers found, for instance, that markets with greater hospital consolidation and more hospital beds per capita were more likely to undergo consolidation in oncology.<br/><br/>Consolidation may be higher in these markets “because hospitals or health systems are buying up oncology practices or conversely because oncology practices are merging to compete more effectively with larger hospitals in the area,” Dr. Erfani told this news organization.<br/><br/>Mergers among independent practices, known as horizontal integration, have also been on the rise, according to the 2020 COA report. These mergers can help counter pressures from hospitals seeking to acquire community practices as well as prevent practices and their clinics from closing.<br/><br/>Although Dr. Erfani’s research wasn’t designed to determine the factors behind consolidation, he and his colleagues point to the Affordable Care Act (ACA) and <a href="https://www.commonwealthfund.org/publications/explainer/2022/sep/federal-340b-drug-pricing-program-what-it-is-why-its-facing-legal-challenges">the federal 340B Drug Pricing Program</a> as potential drivers of this trend.<br/><br/>The ACA encouraged consolidation as a way to improve efficiency and created the need for ever-larger information systems to collect and report quality data. But these data collection and reporting requirements have become increasingly difficult for smaller practices to take on.<br/><br/>The 340B Program, however, may be a bigger contributing factor to consolidation. Created in 1992, the 340B Program allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a 25%-50% discount.<br/><br/>Hospitals seeking to capitalize on the margins possible under the 340B Program will “buy all the referring physicians in a market so that the medical oncology group is left with little choice but to sell to the hospital,” said Dr. Patton.<br/><br/>“Those 340B dollars are worth a lot to hospitals,” said David A. Eagle, MD, <a href="https://nycancer.com/people/dr_david_a_eagle">a hematologist/oncologist with New York Cancer & Blood Specialists</a> and past president of COA. The program “creates an appetite for nonprofit hospitals to want to grow their medical oncology programs,” he told this news organization.<br/><br/>Declining Medicare reimbursement has also hit independent practices hard.<br/><br/>Over the past 15 years, compared with inflation, physicians have gotten “a pay rate decrease from Medicare,” said Dr. Patton. Payers have followed that lead and tried to cut pay for clinicians, especially those who do not have market share, he said. Paying them less is “disingenuous knowing that our costs of providing care are going up,” he said.<br/><br/></p> <h2>Less Access, Higher Costs, Worse Care?</h2> <p>Many studies have demonstrated that, when hospitals become behemoths in a given market, healthcare costs go up.</p> <p>“There are robust data showing that consolidation increases healthcare costs by reducing competition, including in oncology,” wrote Dr. Erfani and colleagues.<br/><br/>Oncology practices that are owned by hospitals bill facility fees for outpatient chemotherapy treatment, adding another layer of cost, the researchers explained, citing <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/hec.3860">a 2019 Health Economics study</a>.<br/><br/>Another analysis, published in 2020, found that <a href="https://www.ebri.org/publications/research-publications/issue-briefs/content/cost-differences-for-oncology-medicines-based-on-site-of-treatment">hospital prices for the top 37 infused cancer drugs</a> averaged 86% more per unit than the price charged by physician offices. Hospital outpatient departments charged even more, on average, for drugs — 128% more for nivolumab and 428% more for fluorouracil, for instance.<br/><br/>In their 2024 analysis, Dr. Erfani and colleagues also found that increased hospital market concentration was associated with worse quality of care, across all assessed patient satisfaction measures, and may result in worse access to care as well.<br/><br/>Overall, these consolidation “trends have important implications for cancer care cost, quality, and access,” the authors concluded.<br/><br/></p> <h2>Navigating the Consolidation Trend</h2> <p>In the face of mounting pressure to join hospitals, community oncology practices have typically relied on horizontal mergers to maintain their independence. An increasing number of practices, however, are now turning to another strategy: Management services organizations.</p> <p>According to some oncologists, a core benefit of joining a management services organization is their community practices can maintain autonomy, hold on to referrals, and benefit from access to a wider network of peers and recently approved treatments such as chimeric antigen receptor T-cell therapies.<br/><br/>In these arrangements, the management company also provides business assistance to practices, including help with billing and collection, payer negotiations, supply chain issues, and credentialing, as well as recruiting, hiring, and marketing.<br/><br/>These management organizations, which include American Oncology Network, Integrated Oncology Network, OneOncology, and Verdi Oncology, are, however, <a href="https://www.drugchannels.net/2023/12/the-battle-for-oncology-margin-how.html">backed by private equity</a>. According to a <a href="https://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/Physician%20Practice%20Trends%20Specialty%20Report%202019-2022.pdf">2022 report</a>, private equity–backed management organizations have ramped up arrangements with community oncology practices over the past few years — a trend that has concerned some experts.<br/><br/>The authors of a <a href="https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2804123">recent analysis</a> in <em>JAMA Internal Medicine</em> explained that, although private equity involvement in physician practices may enable operational efficiencies, “critics point to potential conflicts of interest” and highlight concerns that patients “may face additional barriers to both accessibility and affordability of care.”<br/><br/>The difference, according to some oncologists, is their practices are not owned by the management services organization; instead, the practices enter contracts that outline the boundaries of the relationship and stipulate fees to the management organizations.<br/><br/>In 2020, Dr. Chasky’s practice, Alliance Cancer Specialists, joined <a href="https://usoncology.com/">The US Oncology Network</a>, a management services organization wholly owned by McKesson. The organization provides the practice with capital and other resources, as well as access to the Sarah Cannon Research Institute, so patients can participate in clinical trials.<br/><br/>“We totally function as an independent practice,” said Dr. Chasky. “We make our own management decisions,” he said. For instance, if Alliance wants to hire a new clinician, US Oncology helps with the recruitment. “But at the end of the day, it’s our practice,” he said.<br/><br/>Davey Daniel, MD — whose community practice joined the management services organization OneOncology — has seen the benefits of being part of a larger network. For instance, bispecific therapies for leukemias, lymphomas, and multiple myeloma are typically administered at academic centers because of the risk for cytokine release syndrome.<br/><br/>However, physician leaders in the OneOncology network “came up with a playbook on how to do it safely” in the community setting, said Dr. Daniel. “It meant that we were adopting FDA newly approved therapies in a very short course.”<br/><br/>Being able to draw from a wider pool of expertise has had other advantages. Dr. Daniel can lean on pathologists and research scientists in the network for advice on targeted therapy use. “We’re actually bringing precision medicine expertise to the community,” Dr. Daniel said.<br/><br/>Dr. Chasky and Dr. Eagle, whose practice is also part of OneOncology, said that continuing to work in the community setting has allowed them greater flexibility.<br/><br/>Dr. Eagle explained that New York Cancer & Blood Specialists tries to offer patients an appointment within 2 days of a referral, and it allows walk-in visits.<br/><br/>Dr. Chasky leans into the flexibility by having staff stay late, when needed, to ensure that all patients are seen. “We’re there for our patients at all hours,” Dr. Chasky said, adding that often “you don’t have that flexibility when you work for a big hospital system.”<br/><br/>The bottom line is community oncology can still thrive, said Nick Ferreyros, managing director of COA, “as long as we have a healthy competitive ecosystem where [we] are valued and seen as an important part of our cancer care system.”</p> <p> <em>A version of this article first appeared on <span class="Hyperlink"><a href="https://www.medscape.com/viewarticle/oncology-mergers-are-rise-how-can-independent-practices-2024a1000be3">Medscape.com</a></span>.</em> </p> </itemContent> </newsItem> <newsItem> <itemMeta> <itemRole>teaser</itemRole> <itemClass>text</itemClass> <title/> <deck/> </itemMeta> <itemContent> </itemContent> </newsItem> </itemSet></root>