Vertical Integration of Outpatient Cancer Care

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In the multifaceted world of oncological imaging, there is no shortage of sophisticated technology: The missing element is more likely to be old-school communication. Vertically integrating the specialties of radiology, medical oncology, radiation oncology, and surgical oncology is one strategy being used to facilitate physician communication. It may seem like a simple remedy, but reworking the medical culture is no small chore. From an overall perspective, coordinated treatment means less redundancy, less waste, better quality, and (ultimately) lower costs. Whether an organization is large or small, many of the same principles apply.
imagePaul S. Viviano
Paul S. Viviano, chair and CEO of Alliance HealthCare Services, Newport Beach, California, heads the largest provider of MRI and PET/CT services in the country, with 1,300 locations. In addition to owning more than 100 fixed-site imaging centers, 22 radiation-oncology centers, and a fleet of mobile imaging coaches serving clients in 46 states, Alliance HealthCare Services partners with hospitals to develop and operate imaging centers and, most recently, radiation-oncology centers. “From our strategic perspective, we do see a strong clinical linkage between PET/CT and MRI, to a lesser extent, and the provision of radiation oncology,” Viviano says. “Our goal is to provide care all along the continuum in partnership with hospitals.” Through investments in IT infrastructure, Alliance fosters a workflow that integrates diagnosis, treatment, and ongoing evaluation of patients by interfacing information, image, and treatment-planning systems between sites. Measures also are taken at each hospital where mobile PET/CT is provided to interface with all clinical information systems for the seamless delivery of care. “We do have a fair amount of IT infrastructure to make sure that whatever system the hospital has, we can plug into that,” Viviano explains. “It takes a lot of work because they are all different.” Why such a focus on integration? In short, it works particularly well in times of reduced cash flow.
imageShahab Dadjou
Considering the dramatic reductions for CT, MRI, PET/CT, and radiation therapy contained in the proposed 2010 Medicare Physician Fee Schedule (see sidebar, page 33), increased efficiency will be more important than ever next year. Clinical and business efficiencies will also go over well with accrediting agencies. “There is language in these proposed rules that would require imaging providers specifically to achieve accreditation levels and standards that will be developed by CMS, and that is a positive thing,” Viviano says. “The reimbursement pressures could adversely affect quality and, more important, access for patients.” While reimbursement levels may go down, Viviano estimates that volume growth for oncological imaging will probably grow 3% to 6% in 2010. In order to capture its share of this projected growth, Viviano reports, Alliance HealthCare Services will continue its strategy of partnering with hospitals. “Most people compete against hospitals, but our strategy is to meet their advanced diagnostic outpatient imaging needs and their radiation-therapy needs,” Viviano says. “The one strategy that will be most under pressure, going forward, will be partnering with referring physicians. That strategy is going to get more difficult due to legislative and regulatory attempts to narrow opportunities, and maybe even prohibit them.” Shahab Dadjou is vice chair and cofounder of Cancer Clinics of Excellence LLC, San Rafael, California, a cancer-care benefit-management company. He says that with changing reimbursement, declining incomes, and the prospect of health care reform, many physician specialties are in a near tailspin trying to secure their financial positions. According to Dadjou, the move toward vertical integration is largely a response to these realities and is also based on two interrelated elements: increased competition for patient referrals and physicians’ efforts to slow down the rate of income decline. With medical oncologists experiencing an estimated 40% decline in reimbursement over the past year, Dadjou notes, these clinicians are responding by adding radiation and imaging to their practices. He says, “Radiation oncologists are expecting a significant reimbursement cut in 2010, and they need to go after volume in a highly competitive market. Radiologists and imaging centers are eyeing both [medical oncology and surgical oncology] for increased referrals. What hasn’t changed is the classic tension among the three disciplines as to who will end up controlling the enterprise. Finances are driving most of this. Targeting access, quality, and outcomes will ultimately provide a more sustainable model for successful practices. In other words, good patient care can be profitable.” Vertical Transformation Concerns about quality, regulatory matters, health care reform, and demographics have all begun to influence the evolution toward vertical integration. When Dadjou adds up these influences (including regulatory changes), declining reimbursement again becomes inevitable. “The result is a new level of competition in communities where supply exceeds patient demand,” Dadjou says. “At the same time, hospitals have achieved greater success in influencing legislation, which further deteriorates physicians’ business operations.”
imageFred Gaschen
Dadjou says that the move toward integration has encouraged hospitals to buy up private radiology practices. If the trend continues, could the future of private practices be in jeopardy? He is confident that there will always be room for private-practice radiologists, but private entities must either expand their scope and gain significant efficiencies or accept more hospital-only contracts. When it all shakes out, Dadjou predicts, private imaging centers may see a substantial decrease in numbers through closures and/or consolidations. Much will depend on the ability of cancer-care centers to give patients what they want, and that usually means vertically integrated care. In an ideal world, patients would be sent to a cancer center by their primary care physicians. As Fred Gaschen, executive vice president, Radiological Associates of Sacramento Medical Group Inc (RAS), Sacramento, California, explains, “The medical oncologist might then say, ‘I want to bring in a surgical oncologist right now,’ and would walk down the hallway and bring in the surgical oncologist. After that, the treatment program would probably include radiation oncology, and the radiation oncologist would pay a visit. That is the ideal world, where everything is under one roof.” As one of the few radiology practices in the country that still includes radiation oncology, RAS is in a better position than many radiology practices to participate in the vertically integrated delivery of cancer care. The practice built a radiation-oncology center in a private building on a medical campus, where it collaborates with a medical-oncology practice that built a suite directly behind the RAS facility. In fact, Gaschen’s vision for the practice includes creating a virtual cancer-center model that would encompass all seven radiation-oncology sites. “There are more groups like us that are starting to look at the complete package,” Gaschen reports. For the moment, RAS is moving strategically to bring selected oncology specialists into the practice. It merged, earlier this year, with two urology practices, and it hired a thoracic surgeon and the region’s only gynecological surgical oncologist operating outside the University of California–Davis Medical Center. “Right now, the number-one cancer treated with radiation is prostrate cancer,” Gaschen notes. “The first point of contact is urology; therefore, we merged with two urology practices earlier this year.” Later this year, RAS will launch a screening program for the early detection of lung cancer, and it will collaborate with a pulmonologist to offer treatment options such as thoracic surgery and stereotactic body radiation. “I am not saying we will bring a pulmonologist into the practice,” Gaschen says. “Maybe we will, but we are looking at treating this early.” Concerning whether the practice intends to add medical oncology, the next logical step, Gaschen says, “That is something we are considering, but I am not at liberty to discuss it at this point.” Those who make a serious commitment to vertical integration are able to bring together distinct services that all play roles in comprehensive oncological care. Charles Smith, PhD, vice president of cancer-center services and technology for US Oncology Inc, The Woodlands, Texas, agrees with Gaschen that everything is easier when experts are under the same roof, or at least nearby. “When the radiation oncologists and medical oncologists are in the same practice and down the hall from each other, it fosters consistent access and open discussions,” Smith says. “From the patients’ perspective, having access to those imaging resources in the same facility where they are getting their radiation treatments and/or medical-oncology treatments is a one-stop opportunity. Doing all those services under one roof typically consolidates what would be two or three separate copayments into a single copayment. We can better control office costs as well.” Cancer-care Services Ten years ago, when US Oncology was born out of a merger between two cancer-care companies, the oncology community was highly fragmented, with a multitude of independent providers. A decade later, US Oncology and organizations like it have made a significant impact on the market, resulting in a more integrated national network of oncology providers. US Oncology claims a network of more than 1,200 radiation oncologists, hematologist/oncologists, medical oncologists, and surgeons, the majority of whom are medical oncologists. Among the services and products that the company offers its client members are state-of-the-art imaging and therapeutic technology, an electronic medical record, evidence-based medicine pathways, management of clinical trials, drug-distribution services, a specialty pharmacy, billing services, and CME. In short, it provides the full menu of business, administrative, and support services required to provide cancer-care services in a community. The company also develops some of the centers and does physician recruiting. Vivek Kavadi, MD, practices radiation oncology at Texas Oncology, The Woodlands, an outpatient cancer-center affiliate of US Oncology that offers comprehensive services (with the exception of surgery) such as radiation oncology, medical oncology, pharmacy, chemotherapy infusion, laboratory services, and diagnostic imaging (including CT, PET, and imaging related to radiation-therapy planning). Kavadi also serves as medical director for radiation oncology with US Oncology. “Vertical integration means different things to different people,” Kavadi says. “Depending on the structure of a practice, there may be more or less collaboration. Vertical integration really means that you are looking at all the different services or different specialties that would be involved in taking care of patients.” Since cancer patients now are taken care of by representatives of multiple specialties, vertical integration is more important than ever, Kavadi says. “It is hard to provide the best quality if all of the different components are acting independently,” he emphasizes. “Coordination of care is absolutely critical to providing the best quality. The quest for quality drives vertical integration.”
imageVivek Kavadi, MD
The evolution of cancer care also is a driving force in the integrated approach to care. “Few cancer patients get only one treatment,” Kavadi says. “We know the trend is toward more complex, individualized therapies, so you cannot provide that in the best way if a patient has to hear one decision, then go to another person for another decision, and all of these things are happening independently. In those environments, physicians can coordinate activities by calling each other and talking, but that level of coordination is substantially different than what we have in our setting, where all those different individuals are practicing side by side, and there is real-time interaction and real-time patient decision making.” Radiology’s Role Kavadi acknowledges that Texas Oncology owns imaging technology (primarily PET and CT systems) at its more than 100 cancer-treatment locations throughout Texas, New Mexico, and Oklahoma. It also deploys echocardiography in some locations because ejection fraction can be compromised by certain chemotherapy drugs, requiring monitoring on a regular basis. “We provide diagnostic imaging in a very focused way that is oncology centered,” Kavadi reports. “CT and PET scanning are central to monitoring treatment response. We are not in the outpatient imaging business, and we are not recruiting patients for other imaging.” While Texas Oncology formerly included several radiologists within its practice, those radiologists have since moved on to join a larger radiology practice in Dallas. That practice now provides professional services for the majority of Texas Oncology’s sites, Kavadi reports. “Professional interpretations are always done by a licensed radiologist, often someone who is subspecialty specific,” he says. “I believe there are one or two practices in US Oncology with radiologists who are part of the practice, but in the majority of cases, those radiologists are on contract to provide those interpretations.” Nonetheless, oncology networks are poised to earn a growing percentage of the technical reimbursement for oncological imaging. The Tumor Board In the hospital setting, tumor boards play a key role in integrated cancer care. In that setting, Gaschen reports, RAS radiologists and radiation oncologists are accustomed to participating in thoughtful collaboration with medical oncologists, hematologists, and surgical oncologists, all in one room, to consider the best course of treatment. In the outpatient setting, however, incorporating the concept of tumor boards within a vertically integrated structure does not always mean that all parties are in the same room. Kavadi accesses the US Oncology network of more than 1,200 physicians in various oncological specialties via email, in what he calls a virtual tumor board. “If any physicians within our network come across cases about which they need to have additional information, they can pose question to any group of physicians, or the whole group, and they may get anywhere from 10 to 15 responses,” Kavadi reports, adding that he accesses the network several times a week, at a minimum. Moving forward, Kavadi says, US Oncology plans to formalize its tumor board by building a more robust oncology portal available to its physicians, offering the ability to share more data, including images and pathology slides, while protecting patient confidentiality. With everyone on the same team and working toward the same goal, is leadership within the vertical structure a necessity for success? It depends on the team, but Dadjou has definite opinions as to who should be at the top of the vertical structure. “We have medical oncologists serve as the quarterbacks for the multidisciplinary medical team, and they choose and manage the most appropriate course of treatment,” Dadjou says. “Creating this unique role engages all other related disciplines to work as a team to manage patient care and outcomes.” The Big Unknown A heated debate on health-care reform all but consumed Washington, DC, in July and August. Things eventually cooled down when Senate Majority Leader Harry Reid (D–TX) made the announcement that the Senate would not pass a health-reform bill before the August congressional recess. New discussions on Senate/House compromise legislation will resume on September 8, when Congress reconvenes. When legislators return to Washington, attention will probably shift back to cost, with House officials trying to convince moderate Democratic colleagues that new revenues and savings can cover what some experts estimate to be a $1 trillion to $1.5 trillion price tag over the next decade. Smith believes that lawmakers are likely to decide on a plan that drives medical imaging further in the direction of vertical integration. With the stated goal of reform being to cover the uninsured and contain spiraling costs, it is unlikely that reimbursement levels will go up; this trend calls for greater practice efficiencies. “For people without integrated structures across multiple disciplines, and for smaller providers, survival is going to be difficult as reimbursement declines,” Smith says. “The trend toward larger groups is probably going to continue. Health care reform potentially will have sweeping changes, and I think that containing costs and increasing efficiencies, while at the same time offering high-quality patient-care solutions through integrated care, will be a big part of succeeding under a new system.” Dadjou is not optimistic that health care reform will create change in the way that health care is provided. If lawmakers combine their goal of covering the uninsured with a renewed focus on improved care coordination, US residents could benefit. “I am not convinced, however, that government-run programs will offer a viable solution,” he says. Dadjou rejects the idea that integration, in and of itself, is cutting against private practice. Instead, he blames primarily the unknown elements of major reform. “Integration alone is not disrupting private practice,” he says. “To a large extent, physicians’ sense of instability and unpredictability about the future is causing a shift to hospital-based relationships or mergers with larger groups.” At Texas Oncology, Kavadi predicts that no matter what happens in health care reform, the future could look a lot like the past, with radiologists asked to provide higher quality at lower costs. “If you are working in an environment that puts pressure on reimbursement, it forces you to reorganize and become more efficient,” he says. “For those reasons, I think vertical integration makes sense. We have felt this for many years within our group. Certainly, for the past 15 years, we have been closely integrated, and we felt that was the right way to take care of patients.” Greg Thompson is a contributing writer for Radiology Business Journal. 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