As managed care grows, oncologists will have to decide who to
"bond" with, then learn how to develop financially sound
contracts with their new partners, Lee E. Mortenson, DPA, said
at the 1995 Oncology Symposium of the Association of Community
Cancer Centers (ACCC).
Oncologists can bond with other physician groups, hospitals, or
university programs. Or they can choose to associate with one
of the carve-out organizations that are managing physician practices
across the country, said Dr. Mortenson, ACCC executive director.
In a carve-out, practice management organizations acquire physician
practices, then contract with managed care plans to provide just
one piece of patient care, such as medical oncology and radiation.
The carve-out organization sometimes strikes a deal with an area
hospital to rent beds for inpatient oncology treatment.
Currently, carve-out organizations are maintaining relationships
with hospitals, although eventually they may become competitors.
Right now, the organizations are concentrating on signing up physicians,
particularly the major oncology practice in a large market area.
In the future, they may add laboratory, chemotherapy, x-ray, and
other services to offer an integrated oncology practice, he said.
Physicians wishing to participate in these new practices will
need to develop a managed care bid. The "classic way"
to do this is to look at the population demographics, number of
cases currently under treatment, and previous experience of insurance;
then calculate the likely number and types of cases that will
be treated in the future, Dr. Mortenson said.
But this method doesn't guarantee the anticipated return. Physicians
need to learn how to "manage their managed care contracts"
to ensure they get the margin expected, he said.
He gave this advice:
Develop site-specific, stage-specific global management costs
that include hospital costs, outpatient costs, radiation oncology,
and medical oncology.
Review your contract on an ongoing basis. "Look at the original
bid, discounts, and financial projections. Then examine what you
actually had in terms of patients and expenses," he said.
This will require monitoring of costs and results-including length
of stay and survival rates-by cancer site.