The ACCC 47th Annual Meeting & Cancer Center Business Summit (AMCCBS) took place virtually, March 1-5. The Summit serves the prominent thought leadership forum and annual conference on matters of policy, business strategies, business models, hospital alignment, and best business practices in community oncology.You can also review our additional AMCCBS focused blogs on “Moving Forward Under the Biden Administration” and “The 2021 ‘Level Set’ in the Sprint to Value-Based Care” by clicking the available links.
Foley Partner Adria Warren, along with Curtis Bernstein (Principal at Pinnacle Healthcare Consulting), Josh Eaves (Senior VP, Strategic Partnerships and Acquisitions at Alliance Oncology), and Brad Prechtl (CEO at American Oncology Network, LLC), explored the newest trends and opportunities available to community providers and hospitals in oncology transactions.
In discussing the economic environment for oncology transactions, Mr. Eaves noted that it seems hard to say whether or not in a given marketplace you’re gaining market share riding the tide of demographic market growth, tempered with the fact that you haven’t seen the growth come through in the revenues. What is clear across the current marketplace is that future values are driven by the past and demographic growth is balanced by changes in the marketplace, and the aging population is the biggest growth driver across care setting.
The speakers discussed the implications of the new rules, reimbursement pressures and other drivers of value-based care. Ms. Warren noted that from a legal perspective, there is an ongoing push toward value-based care, overlaid with increasing financial pressures around site-neutrality and drug pricing/transparency. Innovations in technology and reimbursement and increased experience and adoption of telehealth solutions under the pandemic are expected to contribute to this evolution, very clearly a silver-lining coming out of the pandemic. The speakers agreed, however, that it will take time to play out, and that what makes sense at the macro level often conflicts with local market dynamics.
In terms of valuation indications, company specific risks is a driver (inverse) of multiples such as money coming into market (e.g., private equity group, General Atlantic, investing $200 million to create OneOncology), reduction in supply creating demand (e.g., number of community oncology clinics declined 10% between 2018 and 2020), trends in reimbursement on future potential cash flow, and changes in treatment patterns effect on demands for services (e.g., proton centers and immunotherapy). What is evident is that this is a very exciting time in cancer care, the way care is delivered and how those get taken into account on a valuation perspective. In terms of the future and moving forward, there is an expectation that providers will be thinking strategically about the long term and how to address all the legal issues coming from these market trends.
Foley Partner Holden Brooks provided high-level basics of antitrust from compliance and a business-planning point of view, noting that antitrust regulation will be an increasingly important dynamic to understand from a business perspective. Why is it important to pay attention now? Ms. Brooks pointed to:
What is the aim of State and Federal Antitrust laws? The laws were put in place to:
In January 2021, the FTC announced a retrospective reconsolidation, covering 15 states. The FTC is requesting claims data and contract information from major payors. The study is backward looking for the years 2015 to 2020. The data will help the FTC assess the impact of physician and hospital/health system consolidation during this period.
With increased affiliation and consolidation among providers, what are the Antitrust risks in the provider space?
Counsel can help manage risk associated with the process and the results. The return on investment (ROI) of Antitrust awareness and compliance training versus litigation, is significant.
After a successful virtual conference, the ACCC 48th Annual Meeting & Cancer Center Business Summit is planning to be held in person in Washington, D.C. in March 2022!