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Visits to oncologists up, but profit per patient is on the decline

Visits to oncologists up, but profit per patient is on the decline

ABSTRACT: Data also suggest a shift in revenue from Medicare fee-for-service to Medicare Advantage plans.

SAN FRANCISCO—New patient visits to oncologists increased by 22% over the past 3 years; however, oncologists’ average profit per patient fell by 91%. These were among the key findings of Onmark’s 2008 “Office-Based Oncology Benchmarking Survey,” which measures m operational and financial benchmarks among community-based oncology practices.

Survey results indicated that between 2005 and 2007, the average number of oncologists per practice increased by 48% (from 2.9 to 4.3). Meanwhile, there was a 22% increase in the average number of new patient visits per oncologist (from 300 to 388) and a 29% increase in the average number of established patient visits (from 3,481 to 5,139).


Revenue per oncologist per patient varied over the survey years, averaging $4,464 in 2005, $5,250 in 2006, and $4,082 in 2007. However, the average profit per oncologist per patient decreased steadily, from $937 to $654 to $89—amounting to a 91% drop over the 3-year period.

Survey results also indicated that the percentage of oncologists’ total payor revenue accounted for by Medicare Advantage plans rose from 2% to 20% over the 3-year period, while the percentage collected from traditional Medicare fee-for-service programs fell by 16%. Drug costs accounted for 61% of a practice’s budget in 2005 but 79% in 2007; the percentage made up by costs for “other” items fell from 26% to 6%.

“In 2005, the entire industry had to come to terms with a significant decrease in the reimbursement for drugs administered in oncology clinics,” said Onmark vice president and general manager Mike Cunningham, PharmD, in a press statement. “This change required oncologists to adjust the way they traditionally conducted business and re-evaluate what financial success meant. As our survey shows, even 3 years later, we are still seeing the effects these changes have had on the industry.”

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