Health

Cancer Centers of America Plan for Growth Through Partnerships

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Despite closing two out of five hospitals this year, American cancer centers are poised to grow, according to its CEO.

However, this will not come in the form of new hospitals. The Cancer Treatment Centers of America (CTCA), located in Boca Raton, Florida, are expanding beyond the three markets they currently serve, with up to 100 partnerships with healthcare providers in other regions such as Georgia and Iowa. over the “next two years,” said Dr. Pat Basu, who has served as CEO since 2019.

Experts warn that this strategy carries risks, especially for non-profit hospitals, which must ensure that partnerships with a for-profit company like CTCA do not conflict with their charitable missions. Hospitals also need to ensure that their patients are not burdened with large offline bills.

Reportedly a year ago CTCA sale study direct investment buyers. The CTCA did not deny the rumors at the time, but did not disclose much, suggesting only that it is exploring partnerships with like-minded organizations that could help serve more patients.

While the company did focus on joint ventures or mergers and acquisitions, CTCA “never actively considered a sale,” Basu said. “There is no explicit part in our growth plan that says the whole company is for sale or something.”

CTCA currently has hospitals and clinics in the regions around Atlanta, Chicago and Phoenix. Company sold his hospital in Philadelphia the Temple University health system and closed the object in Tulsa, Oklahoma, last month.

The CTCA has closed these hospitals because compensations in these markets are set by “local monopolies,” Basu said. Hundreds of patients who were treated in these hospitals now travel to CTCA centers in Chicago, Atlanta or Phoenix, he said.

“It’s sad for them and it’s sad for us, but at a certain level, in order to provide the quality of care they need, we need compensation to support it,” Basu said.

Basu said CTCA has had the opposite experience in the three remaining markets, where the company’s growth is in double-digit year-on-year terms. As a privately held company, CTCA is not required to disclose financial data such as revenue or earnings. Basu declined to provide any details about the company’s finances.

Directions deal

The Cancer Treatment Center of America partners with traditional emergency hospitals that offer dozens of specialties, giving their cancer doctors access to patients nationwide, either in person or through telemedicine, to improve their partners’ cancer treatment. Likewise, primary care physicians or orthopedic surgeons from other partner hospitals can provide services at CTCA facilities, Basu said.

“We talk to hospitals all the time and we can say, ‘We’ll do stem cell transplants, intraoperative radiation therapy and surgical procedures for you, but you guys will do it for simpler things like primary care and screening,” Basu said.

Before Howard County Regional Health Services contacted the CTCA, the hospital in Cresco, Iowa, did not offer any cancer care other than screenings such as colonoscopy and mammography, said Katie Ricks, the hospital’s chief medical officer.

Under the agreement, Regional refers cancer patients to CTCA, first checking to see if their insurance will cover in-network treatment. Regionale’s patients often travel to CTCA Hospital in Zion, Illinois, about an hour north of Chicago and five hours east of Cresco for an initial examination.

The rest of their treatment takes place primarily at Regional, where providers trained by CTCA administer chemotherapy infusions. Patients also see CTCA oncologists for telemedicine on a weekly basis, Rieks said.

The relationship is similar to the CTCA’s partnership with Iowa Cancer Specialists in Davenport, which directs patients to Zion Center for services that Davenport’s site does not offer, such as surgery and genetic counseling, said Amber Rankin, an Iowa cancer specialist practice administrator. … After the first visit to Illinois, she said, patients can continue treatment with Iowa cancer specialists and, through telemedicine, with the CTCA.

“It’s just a big benefit for patients, even though the distance can be quite difficult for them,” Rankin said. Despite this disadvantage, she said, it is still more convenient for patients than visiting several local service providers.

CTCA currently has seven affiliate partners, mostly in Iowa and Georgia, and the company hopes to forge 50 to 100 alliances over the next two years. In Georgia, the CTCA has entered into deals with Miller County Hospital in Colkitt, Dormini Medical Center in Fitzgerald and Georgia Bone and Joint in Newnan. In Iowa, the CTCA is associated with Howard County Regional Health Services, Iowa Cancer Specialists, and Iowa Specialty Hospital in Clarion. The company also partners with Iroquois Memorial Hospital in Watsek, Illinois.

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Special considerations

While hospitals often buy cancer rooms because they are lucrative, it would be “highly unusual” to treat, say, orthopedic patients at a cancer center, said Monique Lappas, CEO of Q Consulting Services, which specializes in healthcare. …

“I just don’t understand how and why they would want to partner with American Cancer Centers if there was not some kind of financial incentive, and then you will face all kinds of legal problems,” Lappas said.

When a not-for-profit hospital partners with a for-profit company, its leaders must carefully structure the agreement so that the activity is not perceived as being commercial and incompatible with the nonprofit’s charitable mission, said Richard Zall, chairman of King & Spalding’s Healthcare Operations and Regulatory Practice.

Under the terms of a classic tax-exempt hospital partnership, the CTCA will be required to operate in line with the hospital’s charitable mission, which includes treating patients who rely on Medicaid or Medicare.

“It could be changing their MO,” Zall said.

The partnership with the CTCA can be bad marketing for a hospital, especially a nonprofit, Lappas said.

“It takes away the public aspect of the hospital’s nonprofit business,” Lappas said. “It takes away the power of the community by supporting the community with community doctors. Instead, it is a large nationwide group that does business. “

CTCA selected patients based on their insurance coverage, according to a 2013 Reuters investigation. The CTCA has also been criticized for over-exaggerating the success of its treatments. Reuters also discovered CTCA used misleading statements about survival in advertising. In 1996, the CTCA settled with the Federal Trade Commission despite the allegations, he made false and unsubstantiated statements when advertising and promoting his medicinal products.

The CTCA notes that these incidents happened many years ago. CTCA believes that since then, the company has focused on quality, innovative delivery and patient satisfaction.

Basu said CTCA has successfully negotiated contracts with insurance companies. Previously, the company provided most of its services as an offline provider. Realizing that quality is about access, Basu worked to change that when he became CEO. About 92% of the company’s patients now have CTCA coverage in their provider networks, up from 40% a few years ago, he said.

“Previously, the company’s decision – when I was not here – for various reasons was not to do it,” Basu said. “This left some friction between the provider and the payer.”

In-network status has also led to an increase in doctors ‘visits without having to worry about their patients’ insurance coverage, Basu said.

Rankin said the expansion of insurance coverage prompted Iowa cancer specialists to partner with the CTCA. “We’re always doing research on benefits because we don’t want patients to hang around with this big bill,” she said. “This is very encouraging.”

CTCA is not legally obligated to contract with the same insurance companies as its hospital partners, Zall said, but hospitals are likely wanting to guarantee that to their patients.

“This is an important consideration when organizing these ventures,” said Hall. “It’s not necessary, but I think it could be a problem if you don’t.”

None of this prevents CTCA from ultimately selling to private equity. In fact, it could even raise the likelihood of a buyout, said Angela Humphries, chair of Bass Berry’s medical practice and co-chair of her healthcare private equity group.

“To be fair, this increased strategic alignment with hospitals and health systems would certainly make the company more attractive to direct investment,” she said.


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