Book Excerpt: Elements of a Successful Oncology Transaction

The conclusions and recommendations resulting from determining the business needs of the parties will provide a common understanding of the imperatives for alignment and help steer negotiations, particularly as the key deal points for an arrangement become finalized.

Some consideration should be given to the following aspects of alignment:

• How does this arrangement assist the aligned organization's overall vision for the future of how oncology care is delivered in its market?
• Does this arrangement support the hospital's broader physician alignment strategy?
• Will the arrangement facilitate greater clinical coordination and improve efficiency?
• Are provider needs for competitive compensation and stability addressed?
• Will this arrangement support the community need for oncology services and subspecialty care?
• What should a true partnership involve?
• Are physicians willing and ready to help lead the oncology service line?
• What are "deal breakers" from each party's perspective?

Understand Key Drivers
The incremental costs associated with hospital/physician alignment often require that parties identify additional revenue streams, either through increased volume or better reimbursement.