The times have never been better for local hospitals to expand outpatient cancer treatment programs Jul-6, 2009 Cancer is already the leading cause of mortality for adults under age 85, and is expected to unseat cardiovascular as the number one killer overall in the next year or so. Our friends at Sg2 Health Care Intelligence (http://www.sg2.com/) project that total cancer discharges will grow seven percent annually over the next 10 years with most of the increase in volume and revenues from the outpatient side. That compares with about one percent growth for cardiovascular and 1.7 percent for all service lines.
Technology and payment changes are also driving outpatient cancer volume - and development opportunities for hospitals. Improved chemotherapy and diagnostics make outpatient treatment possible for more and more patients. Even bone marrow transplants are going outpatient. Advances in radiation oncology reduce treatment times, allowing higher patient throughput and return on investment in expensive equipment. New construction materials and techniques reduce the cost of building specialized facilities for linear accelerators.
At the same time, Medicare and other payers are cutting reimbursement for freestanding physician-run facilities. The result? Doctors who once might have become your competitors are now motivated to be your partner. The combination of economies of scale and higher payment for hospital affiliated facilities are compelling.
For non-academic hospitals the major opportunity is in the "big four" cancers - breast, prostate, colon and lung. It may not even be necessary to develop an inpatient program as 90 percent of services are now outpatient. Patients prefer, and are more likely to comply with, outpatient treatment offered in patient-centered facilities close to home - particularly in areas where the nearest specialty center may be hours away.
Still, it takes skill and hard work to translate these opportunities into a sustainable outpatient cancer facility. New construction or even a build-out in an existing facility requires permits from local governments, compliance with national standards, specialized functional and space planning, and expertise in designing and constructing medical facilities. Efficiently organizing these tasks is often beyond the capabilities of hospital managers.
Then there's financing. It can be complicated, especially if physician partnerships are involved. Outside expertise in structuring ownership and lease deals is a necessity in most cases. External facilities management, especially for freestanding centers, may also be advantageous.
To a large extent, developing a successful cancer care center depends on your partners. Support from at least one physician recognized as a clinical oncology leader is key. It may be best to focus on one clinical area first and add others as you attract more physicians and develop expertise.
Equally important is a development partner who can bring you and your physicians together to generate a plan that gets the facility built and operating on time and on budget. At Lillibridge we've designed, built and structured ownership deals for literally thousands of outpatient medical services, and we currently manage hundreds.
Our newest cancer center, built from the ground up, will open in Decatur, Ill., this fall. This freestanding facility is owned by a local physician group and will house diagnostic and therapeutic services run by the community hospital. It's expected to make both major cancer players in this growing urban market. Give us a call and we'll help you assess your own cancer care opportunities. | |  Howard Larkin
Writer and Editor
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howard@howardlarkin.com Tags: cancer care, outpatient cancer, healthcare finance, hospital-physician joint ventures, cancer center, oncology, facilty development, architecture, space planning, functional planning, market analysis, service area, cancer service volume, cancer center development, real estate development, Lillibridge. |
