Exploring the Quest for the “Secret Sauce” in Oncology on an Unequal Playing Field

Jeff Patton, MD, the CEO of the practice network OneOncology, said he had given up ever seeing reform of 340B, the government program that lets safety net hospitals to buy prescription drugs at discount and then bill insurers the full price, creating a profit stream unavailable to community oncologists.

But in September, The New York Times reported on the case of Bon Secours in Richmond, Virginia, in Patton’s home state. The health care giant had taken advantage of Richmond Community Hospital to quality for 340B, then stripped out the hospital’s specialists and equipment until it was a “glorified emergency room,” with no intensive care unit to care for patients with COVID-19 . Meanwhile, Bon Secours’ suburban facilities boomed—all billing off the lucrative drug program.

For Patton, the report was a sign that complaints about 340B from the Community Oncology Alliance are finally breaking through. “I’ve gone from hopeless to having some hope,” he said.

Patton relayed the Bon Secours episode on Friday during as he opened the OneOncology Physician Leadership Conference, a 3-day gathering in Nashville, Tennessee, of providers from the 15 practices that make up the growing network, which offers data analytics, clinical pathways, marketing, and administrative support to help community oncology compete in what Patton described as an uneven playing field.

“If health care were a free market, we would have already won,” he said, describing community oncology as the “low cost, high quality provider in cancer care.” Powerful forces work in favor of hospitals, from their status a major employer in rural areas to their lobbying clout. Patton explained that these advantages work against community oncology in many ways:

• When health systems buy up primary care physician practices, those patient referrals no longer flow to community oncology.
• Laws requiring price transparency, which should let low-cost providers compete, are hampered by “anti-steerage clauses” that hospitals put in payer contracts.
• Vertical integration, which has gained attention from the Federal Trade Commission, is allowing insurers to make more money from their associated pharmacy benefit manager. Practices are blocked from using lower-cost drugs or biosimilars due to rebate arrangements.
• Because of 340B, hospitals are financially rewarded for avoiding low-cost options, including biosimilars.

Meanwhile, Patton said, the headwinds continue for community oncology, which must absorb 7% inflation and a 4.5% pay cut under the most recent Physician Fee Schedule.

OneOncology, he said, is helping practices push back against all these trends. “In the past 2 years, we’ve doubled in size—our physician practice number, revenue, and earnings have gone up 50% year over year, despite the ugly forces out there,” Patton said.

A key to OneOncology’s success, he said, is helping practices grow within their markets and gain bargaining power with area payers. (Two OneOncology practices, Tennessee Oncology and Astera Cancer Care in New Jersey, have executed innovative value-based agreements with their respective Blue Cross Blue Shield insurers.) “If you can get dominant or close to dominant market share in your local practice, you can win,” Patton said.

OneOncology aids practices with physician recruiting, at a time when more medical oncologists are retiring than being trained. Patton highlighted rapid growth at Fort Worth-based The Center for Cancer and Blood Disorders and on Long Island, with New York Cancer and Blood Specialists.

He said the OneOncology philosophy rests on several core principles: a passion for clinical research, a commitment to value-based care, a data-driven approach that uses measures to drive improvement, and a belief that all discussions start with what makes sense from a clinical perspective.

“We’re doctors and care providers first,” Patton said, highlighting OneCouncil, a physician-led board that drives issues affecting clinical practice.

“We have an incredible value proposition to tell,” he said. Community oncology is decreasing hospitalization and driving down costs—just taking a patient from a hospital to a community clinic cuts infusion costs by two-thirds. Today, the challenge is helping practices meet compliance requirements while maintaining “that Mom and Pop feel” that patients prefer and delivering the most innovative treatments.

“That’s our secret sauce,” Patton said.

Lessons from government service. Patton welcomed Adam Boehler, the current CEO of Rubicon Founders who served in the Trump administration as head of the Center for Medicare and Medicaid Innovation (CMMI). Boehler, who previously founded the home health company Landmark Health, had never pictured himself in government. He was recruited by departing Obama administration officials for his ability to “align incentives.” On his watch, CMMI made important adjustments to the Oncology Care Model (OCM) and developed kidney care models.

Patton and Boehler discussed challenges with health care generally and the those that community oncologists face specifically. Boehler described the challenge of creating positive incentives, and then Patton asked about the transition to the Enhancing Oncology Model (EOM), proposed in July as a slimmed-down successor to the OCM. Specifically, Patton asked why there is a yearlong gap between the 2 models, which will cause quality reporting headaches for practices that may want to move from the OCM to the EOM. Is it just politics?

More likely, Boehler said, it’s a function of the transition—top staff in the White House are focused on issues such as Ukraine, not CMMI. Beyond that, models are not designed to be permanent fixtures. “If you rely too much on them… if all your economics were based on that, that's a bad idea. It's risky.”

Building around bundled payments makes sense in certain cases, but not in others, he said. In trying to solve problems it can often make sense to invest in a partner with aligned goals—Patton mentioned full-risk primary care. Boehler said primary care groups would be most interested in nephrology and oncology; when he was with Landmark, “we would always be interested in working with on oncologists, because we know where to stop.”

Patton asked what can be done to protect against “perverse incentives” that can exist under fee-for-service, or with situations such as 340B. Boehler offered some thoughts on “natural protections” when capitation is involved, where he said the government’s role is to “aggressively monitor” to protect against bad actors.

Why, Patton asked, is PBM reform so difficult? Why did it seem there was progress on reform, only to see those efforts fade?

The challenge, Boehler said, is that there is a risk that in the short term of a reform effort it would raise costs for seniors. “So, you can imagine, it's not something political administrations like, so it has to be timed, quite frankly, from a political perspective, before people will take that on. But it was pretty close.”