By: Tony Hagen @oncobiz
Source: ONCLive.com
The dramatic surge in hospital merger and acquisition activity that gobbled up oncology practices by the score is losing steam as a result of numerous policy and legislative acts, and this is creating a climate of uncertainty in terms of revenue generation, according to Michael L. Blau, JD, of Foley & Lardner. The repercussions of these changes are affecting not just the prospects for independent oncology practices but also the ability of inner-city and charity-care hospitals to continue serving low-income residents to the extent that they have in the past.
Since 2008, 423 individual cancer treatment sites have closed, often because of competitive pressures caused by policies and legislation that favored large hospital treatment centers, and another 658 community cancer centers were acquired by or became affiliated with hospitals, according to the Community Oncology Alliance. Many hospital acquisitions and alignments have been driven by shared-service agreements and co-management arrangements that allowed increased returns of up to 10% to 15%, Blau said in remarks at the 2018 Association of Community Cancer Centers 44th Annual Meeting and Cancer Center Business Summit, held in March in Washington, DC. Such margins will be much slimmer going forward, and some financial “downside” can be expected, he said.
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