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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.

    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.

      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.

        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.