Book Excerpt: Elements of a Successful Oncology Transaction
If the transaction includes medical oncologists that currently perform infusion therapy services outside the hospital, the parties should conduct a thorough assessment of 340B drug pricing eligibility to identify options that maximize the program's benefits. Organizations should at a minimum consider the following questions when evaluating 340B pricing:
- Does the hospital or an affiliated hospital within the system qualify for 340B?
- If the hospital participates in 340B, how large is the practice's chemotherapy program? How many medical oncologists are expected to participate?
- If the hospital participates in 340B, how can it increase its participation through partnerships with community oncologists? And how will the alignment model engage physicians in the program?
- How many qualifying patients (e.g., outpatients, patients with an established relationship with the provider) are expected to participate in the program? What is the expected economic gain?
Ensure Proper Due Diligence
The due diligence process is critical for every transaction and is typically conducted in an iterative fashion, wherein increasingly detailed information is requested from the group.
Questions about compensation typically are initiated early in the process. It is critical for the hospital to conduct a thorough assessment of the oncologists' current practice, understanding all revenue streams and expense drivers, before presenting a financial offer to the physicians. This process is important for any specialty acquisition; however, it is particularly important for oncology practices due to the complexities of the practices (e.g., large reliance on ancillary income).
- Readmissions: No Quick Fix to Costly Hospital Challenge
- How Top-Ranked MA Plans Earn Their Stars
- House Calls Key to Pioneer ACO Success
- How Telehealth Pays Off for Providers, Patients
- Ebola: Health Officials Try to Quell Front Line Fears
- Defensive Medicine Still Prevalent Despite Tort Reform
- 4 Ways to Lower the Cost to Collect from Self-Pay Patients
- 'Overtreatment' Debate Circles Back to Lung Cancer Screening
- How Hospitals Can Become 'Upstreamists'
- Partners HealthCare M&A Deal Under Scrutiny