May 22, 2020
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Community oncology practices face merger pressure, declining visits since COVID-19

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Photo of Ted Okon
Ted Okon

Community oncology practices have long been a cornerstone of cancer care, allowing patients to receive specialized treatment near their homes, workplaces and families.

The Community Oncology Alliance — a nonprofit organization that advocates for community oncology practices and the patients they serve — estimates that nearly 55% of Americans living with cancer receive treatment in the community oncology setting.

Yet the alliance’s annual Community Oncology Practice Impact Report revealed a concerning trend: Since 2008, nearly 1,748 community oncology clinics and/or practices have closed, reported financial struggles, been acquired by hospital systems or undergone corporate mergers.

“Implementation of the Medicare Modernization Act, which fundamentally changed Medicare reimbursement and was later implemented by private payers, has put pressure on practices,” Ted Okon, MBA, executive director of the Community Oncology Alliance (COA), said in an interview with Healio. “Community practices are under pressure to either close their doors or close facilities, especially in rural areas.”

To avoid being acquired by hospitals and remain autonomous, many community practices have merged with one another. Okon said he considers this a positive development, particularly as the COVID-19 pandemic continues to put a strain on hospital time and resources.

“We are seeing the benefits that community oncology resources can offer during this COVID-19 crisis,” he said. “As the hospitals — particularly those in hot spots — are overrun with COVID-19, some have had to ask the independent practices to take their [patients with cancer].”

Okon spoke with Healio about the ongoing challenges that community oncology practices face, as well as those that have arisen due to the COVID-19 pandemic.

Question: How did you compile this report?

Answer: We gathered this information practice by practice. We get our data on acquisitions and mergers from many sources, from the news to our listservs. There are no false positives, if you will. There are only false negatives, meaning we might not have captured all of them.

Q: What have you observed in terms of hospitals acquiring community practices?

A: Over 85% of these hospitals are 340B hospitals. They have 340B drug discounts, which make cancer care — and specifically expensive cancer drugs — very profitable to these hospitals. They have an incentive to start programs, and the easiest way to start a cancer treatment program is to acquire an existing practice. The very interesting thing we started to see about 2 years ago is a big jump in practices merging with each other.

Q: Why have practices been merging with each other?

A: Frankly, they don’t want the hospital option. We’ve now had enough time for oncologists to see some cases of community practice-hospital mergers that have gone bad. These practices are saying, “Wait a minute. I want to stay independent.” The best way to do that is to merge with another independent practice. That way, you get volume and you’re competing in a world where hospitals are acquiring each other.

Q: What are the consequences of community practices being acquired by hospitals?

A: What oncologists have seen is, they lose their autonomy. They’re not making decisions and, in some cases, they have to abide by the way the hospital conducts its business. Physicians in general tend to be independent spirits, and a lot of oncologists look at that situation and say, “I want to be able to do my own thing, and not be part of a rigid system.”

Q: Do you think the acquisition of community practices by hospitals has an impact on the quality of patient care?

A: We do. Hospitals used to be pillars of the community, run very much by medical people. At some point, they transitioned to behemoths and, although there are some nonprofits, big behemoths function like for-profit corporations run by businesspeople. That absolutely has impacted care. I’m sure you’ve seen stories about large hospital systems very aggressively debt-collecting. These hospital systems have the advantage of for-profit tax breaks and subsidies, 340B discounts, and they’re aggressively going after patients — and, in some cases, their own employees. So, I think when the dollars become more important than the patient, you have a problem.

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Q: The Cancer Letter, citing data from Flatiron Health, reported sharp decreases in visits to community oncology practices due to the COVID-19 pandemic. What did the data show?

A: There has been a decrease in visits by new patients per week, from about 8,000 in early February to less than 5,000 at the end of April. Total patient visits declined dramatically after March, in the five-figure range. Patient visits that entailed chemotherapy decreased by up to 17% in the Northeast, and nonchemotherapy visits dropped across the U.S. by as much as 37%. Moreover, cancellations and no-shows nearly doubled overall and increased up to 80% in the Northeast.

Depending on where a practice is located, there are valid reasons for patients to be cautious. They have cancer and many are older — they are among the most susceptible individuals to COVID-19. You have patients who are afraid to come out of their house, or told not to come out of the house. There are patients who rely on public transportation, which is a problem in a big metropolitan area like New York, and those who are beholden to another family member to get them to appointments. Then there are concerns about social distancing.

Q: Telehealth has become an important tool during the pandemic for many medical specialties. How has it affected the delivery of community oncology care?

A: Telehealth has enabled oncology practices to have nontreatment visits with patients. This allows oncologists to monitor patients so they can possibly push back some types of treatment. Prior to the pandemic, telehealth was rigid in terms of how it could be used. Now, the need created by COVID-19 has brought it into widespread use.

Q: Could the reduction in patient visits to community oncology clinics, and any subsequent financial struggles, leave these practices more vulnerable to acquisition?

A: Yes. Some practices are more vulnerable than others; some may have already been under pressure and had financial difficulties. For some of these smaller practices, COVID-19 could be the straw that breaks the camel’s back. Conversely, there is the issue of people losing their jobs, and, therefore, losing their insurance. These patients may not be able to afford treatment. That will place more pressure on community oncology practices in terms of debt, finding patient assistance and similar issues.

Another thing we’re grappling with is what happens as the world comes back to some kind of normal, even if it’s a new normal. There are patients who aren’t getting diagnosed for one reason or another. They might not be getting preventive screenings or might not be seeing their primary care providers. So, we expect to see a wave. I don’t think it’s going to be a tsunami, but it may be a very powerful wave of patients who are just being diagnosed, and some may be sicker as a result of the delay. Practices have done an amazing job of keeping their facilities and providers COVID-19-free. They’ve adapted to keep their doors open so they can continue treating patients. However, what might happen to practices down the road is equally scary.

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Q: Does COA have a plan to help community oncology practices prepare for possible future challenges?

A: We have done more webinars and increased information-sharing through our listservs. Practices have shared best practices in terms of using telehealth and structuring clinic teams to minimize COVID-19 exposure. Additionally, because transportation is an issue, we set up a transportation fund with CancerCare, a philanthropic organization that provides assistance to patients with cancer. This fund allows patients in active cancer treatment to get medically safe rides to their treatment. We’re also trying to set up a financial assistance program with CancerCare.

The COA board and leadership are doing modeling to determine what we’ll face down the road and what practices will need to do operationally to handle it. This will help us determine what we need to do from a policy standpoint and what we should recommend to policymakers. We are running full steam ahead on these efforts. – by Jennifer Byrne

Reference:

The Cancer Letter. COVID-19 vs. community oncology: Flatiron’s data provides first damage assessment. Available at: cancerletter.com/articles/20200501_1/. Accessed May 21, 2020.

For more information:

Ted Okon, MBA, can be reached at Community Oncology Alliance, 1225 New York Ave. NW, Suite 600, Washington, DC 20005.

Disclosure: Okon reports no relevant financial disclosures.