By Deirdre Saulet, Practice Manager
Hospitals and health systems across the country are facing unsustainable margins. In fact, 60% of hospitals are projected to be in the red by 2025 if they don't improve productivity or reduce costs—and traditional cost-cutting levers, such as supplies and labor, won't be enough to keep most organizations afloat.
While the transition away from free-for-service reimbursement models and increased provider accountability for cost and quality has made an impact across all service lines, oncology programs are in a uniquely perilous position due to 340B cuts and increased scrutiny from payers over cancer treatment outcomes and costs. As a result, your cancer program will need to revamp its investment strategy to stay competitive and financially sustainable.
Join me for a webconference on Thursday, Feb. 8 where I'll share more strategies for responding to today's mounting margin pressures—and keep reading to learn five imperatives for making oncology program investments that will keep you ahead of the pack.
Imperative 1: Align with your organization's goals
Before committing to a new investment, you'll need to have a firm grasp on your organization's goals for both the short- and long-term. To ensure you're aligned with these goals, answer these 5 questions:
- What are my health system's strategic priorities this year?
- How does my health system define high-quality care?
- What metrics will be used to track performance?
- How will this investment contribute to improved performance?
- How strong is the evidence that this investment will reduce costs and/or improve outcomes?
Take the case of clinical pathways, online platforms that guide physicians to select the best-fit treatment for an individual patient based on efficacy, toxicity, and cost. When Aetna partnered with New Century Health to provide physicians with clinical decision tools and data analytics, it projected that, despite the unique treatment needs of cancer patients, oncologists would be able to adhere to pathways for 80% of their patients. This would generate savings of about 10% just in chemotherapy costs per patient treated on pathway.
Imperative 2: Define your population and patient needs
Once you have a good understanding of your organization's expectations, you'll need to look to your patient community to evaluate which—and how many—patients would benefit from the investment and how it would impact their outcomes.
After identifying this, the next step is ensuring you are able to quantify the impact of the new investment on your patients' needs and measure its ROI to illustrate its value to your organization.
Imperative 3: Assess market dynamics
Your organization doesn't exist in a vacuum, so your next imperative is to understand how—or if—your potential investment would differentiate your organization from the competition. Do other organizations in your area already offer the service? Or does the investment seize a previously untapped opportunity?
You should also consider how the investment would affect the behavior of referring physicians in your market, whether or not the investment would improve your reputation with the general public, and whether it would position your organization as a "high-value" provider to your market's payers and employers. (For instance, just 25% of Oncology Roundtable members report using clinical pathways for medical oncology, which could represent an opportunity in some markets to demonstrate your value to payers).
Imperative 4: Assess physician support
The cost and clinical benefits of any new investment are attainable only if you're able to secure buy-in from clinicians. Securing a physician champion to act as the face of the initiative is one way to build support, but you'll also need to identify all physicians who will be critical to the success of the investment and survey their attitudes toward the investment.
For example, your leadership may see clinical pathways as a tool to provide more cost-effective, streamlined care—but physicians may see it as additional steps added to their workflow, diminished decision-making ability, and questions over their development. That's why spurring conversations to increase buy in is so crucial to success.
Imperative 5: Evaluate resource availability
Now that you've analyzed your own organization, your community, your market, and your physicians, it's time to consider your budget. What is the cost of the investment—and the infrastructure to support it? And will the future reimbursements ensure that you'll see a return on your investment?
ROI is not guaranteed—and you may find that the investments you need to remain competitive in your market don't necessarily pay for themselves. This is often the case for support services, such as survivorship and navigation. In this case, consider whether or not grant-based or philanthropic funding can help defray the costs.
Next, get more strategies to maximize revenue capture, contain cost growth, and more
Join me for a webconference on Thursday, Feb. 8 to learn what you'll need to do to develop a new margin management strategy that will ensure your organization's financial sustainability. I'll highlight key strategies, including maximizing revenue capture, containing cost growth, and providing financial support to patients.Register Now