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The Challenges Confronting Community Oncology in 2023

And how OneOncology is developing solutions to enable physician independence

After more than a decade of market pressures and headwinds that have led to the accelerated acquisition and closing of community oncology practices, today’s trends are indicating that this pressure is not going away. Community oncology groups will continue to face headwinds and unfavorable market dynamics as we approach 2023. Our primary mission is to enable community oncology groups of all sizes across the country to stay financially viable and independent. At OneOncology, we are closely monitoring the following headwinds, and investing in strategies and solutions that mitigate these challenges:

1. Market events and policy changes will lead to increased financial pressures for community oncology practices.
Between the return of sequestration, biosimilar ASP erosion, increased direct and indirect remuneration (DIR) fees and inflation, there are numerous factors that will negatively impact community oncology groups from a financial perspective. These compounding headwinds can drive upwards of 25% earnings decline, putting community oncology at greater risk of closure or hospital consolidation.

2. Government-driven value-based care programs are becoming more complex.
With the Oncology Care Model (OCM) ending and the Enhancing Oncology Model (EOM) starting, this presents a few challenges for practices. MEOS payments will be lower, and program requirements will be more challenging (e.g. required practice redesign activities). This means that even for groups that were successful in the OCM, participation in the EOM will not come without some additional investment; and then practices who were not already set up with the right infrastructure and resources for the OCM will have a higher barrier to overcome. Additionally, there is now mandatory downside risk, so it will be more difficult for practices to generate significant earnings in the EOM if they are not able to generate meaningful shared savings, especially because of the lower MEOS payments in this model.

3. Increasing market competition is being compounded with an increasingly difficult market to grow.
As hospital pressures increase, community oncology practices find themselves needing to bolster services and staffing to compete. This, in combination with the growing shortage of oncologists and APPs across the country (ASCO projects a shortage of more than 2,200 oncologists by 2025), has made it increasingly difficult to staff practices to be able to remain high performing and independent.

At OneOncology we are hyperaware of these challenges, and we are enhancing our services to enable community oncology practices to remain independent. Here is how we are supporting our practices with these issues:

Problem 1: Market events and policy changes will lead to increased financial pressures for community oncology practices

OO Solution: OneOncology enables community oncology practices to stay financially sound and viable via diversifying revenue streams through managed care support, pharma contracting and operational efficiencies, along with serving as a partner for capital support.

  • Data-driven strategies to diversify revenue streams: We provide our practices with access to a centralized, highly skilled analytics team and a platform to measure clinical quality, operations and performance metrics. This is leveraged for initiatives like driving the development of novel value-based payment programs and supporting managed care contract negotiation.
  • Capital Partner: We invest in our practices and serve as a strategic partner to align on the highest value use of capital, focusing on investments that serve patients, while also providing return on investment. Keeping practices financially viable by serving as a capital partner greatly de-risks the potential financial impact that will likely be caused by the return of sequestration, biosimilar ASP erosion, increased DIR fees and inflation in general. OneOncology has the financial flexibility to invest in growth even in downturn.

Problem 2: Government-driven value-based care programs are becoming more complex

OO Solution: OneOncology provides practices with extensive resources – from subject matter experts to operational support to analytics and reporting – to achieve success in these programs.

  • Extensive support and preparation for EOM: We are supporting all our practices in the EOM application process and hiring additional corporate resources to maximize performance. With this, we fully believe each of our practices can achieve meaningful savings under OneOncology; excellence in value-based contracting will be critical to diversity practice earnings away from drug margin, which is seeing current compression from the market pressures mentioned above.
  • Investment in Alternate Payment Models & Value Based Care: There is an increasing appetite from commercial payors and prevalence of value based or alternate payment models; that said, if community oncology does not have a seat at the table to drive design of these programs, this could be detrimental to practices. OneOncology is proactively investing in this space, and we partner directly with our practices to provide them with the market and practice-specific data and insights around their clinical practice, along with working with payors at a local and national level to present programs that reward community oncologists for the high-quality low-cost care they are providing.

Problem 3: Increasing market competition compounded with increasingly difficult market to hire and retain talent.

OO Solution: OneOncology invests in our practices from a clinical, staffing and growth standpoint to enable independence and ability to stay competitive against growing hospital and health system pressures.

  • Recruiting and growth support: OneOncology provides extensive recruiting services to our practices, recruiting and retaining not only medical oncologists and APPs, but also supporting with the hiring of non-oncology providers, business stakeholders, and then providing access to corporate resources to drive standard business operations. We also heavily invest in growth and operations efforts to scale our practices across their geographies, enabling success in highly competitive hospital markets: for example, we’re supporting many groups in building out the continuum of care through employing other specialties at our cancer centers, along with driving marketing and liaison efforts to serve more patients in their communities.
  • Investment in clinical innovation: Community oncology should be resourced to provide the most cutting-edge therapies to patients close to their home, like phase I research, precision medicine, theranostics, and efforts around expanding the continuum of patient care to other specialties. By enabling practices to provide these services, they can stay competitive in aggressive markets through offering high value care.

With the additional investments that OneOncology has made to protect community oncology practices from increasing headwinds in 2023, our practices are realizing success across growth efforts, clinical innovation and development of novel value-based care offerings, all of which is more than offsetting external pressures, and in turn, enabling our practices to remain independent and serving their patients close to home. And not only should practices expect to face real headwinds with negative financial impact in 2023, looming policy like the Inflation Reduction Act adds long-term uncertainty. That is why now, more than ever before, it is critical for OneOncology to invest in our community oncology practices.

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