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