Consolidation Ripples Out From Florida

Meir Rinde
Published: Thursday, Dec 29, 2016
Alan Marks, MD

Alan Marks, MD

Florida is a leader in the consolidation trend, topping the nation in the number of practices that have closed, merged, or been acquired in recent years, according to the Community Oncology Alliance (COA). Most practices have affiliated with hospitals or joined large groups like Florida Cancer Specialists, one of the nation’s biggest physician-owned oncology networks.

Florida has changed so dramatically in part because it has a large population of older residents on Medicare, making providers particularly sensitive to CMS policy changes that reduce revenues, increase compliance costs, and increase consolidation pressures. After California it has the most cancer patients. In addition, seniors there are generally fitter and better able to tolerate treatment than in other places, further expanding the number of patients, said Alan Marks, MD, past president of the Florida Society of Clinical Oncology.

“Our seniors are healthier than the same age-group population in, say, New York,” Marks said. “We don’t think anything of taking an 85-year-old and giving them chemotherapy here in Florida, because chronologically they’re 85, but they’re out there playing golf and tennis and swimming, and physiologically they’re in their 60s.”

Yet many of the same pressures that eliminated small practices in much of Florida are present everywhere, such as high drug costs, declining reimbursements, more complex payment models, and younger physicians’ preference for employment rather than entrepreneurship. Large groups and networks are growing in Colorado, New Jersey, New York, Tennessee, and Texas. Oncologists continue to sell their practices to hospitals, and leading cancer centers are spreading their brands through joint ventures.

At the same time, variations in state laws and local markets result in diverse types of consolidation. In areas where size does not confer a significant advantage, small providers may remain independent for some time. While oncologists in some states are following Florida’s lead, in others they are taking a different path.

“At present, we are not seeing the same scale of consolidation elsewhere as we are seeing in Florida,” said Constantine Mantz, MD, chief medical officer at 21st Century Oncology, which has 144 centers in 17 states. However, “large oncology practices and networks will continue to grow throughout the country as physicians seek alignments with larger entities to better meet their operational needs.”

Competing for growth

Small practices are disappearing nationally due largely to hospital acquisitions. In the Sunshine State, however, a leading player is Florida Cancer Specialists (FCS), a physician-owned mega-group that has grown over three decades to 206 physicians and 100 offices. FCS practices are concentrated on the West Coast and in Central Florida around Orlando, with one in the Panhandle and none in Jacksonville or Miami.

21st Century Oncology, also based in Florida, has about 100 oncologists around the state, the majority of them radiation oncologists. US Oncology’s numbers have fallen over the years as some practices have ended their affiliations with the company, but it still has 26 oncologists along with other specialists. Other than FCS, the biggest independent practice group is Integrated Community Oncology (ICON) in Jacksonville, also known as Cancer Specialists of North Florida, with 31 oncologists at nine locations.

Jacksonville is one market that illustrates the competitiveness and volatility of oncology in Florida. Marks’ former practice, for example, was sold to Baptist Health System in 1992; bought back its independence in 2003; and became part of 21st Century in 2008, in order to satisfy payer requirements for access to radiation therapies. Last year, 21st Century’s Jacksonville group merged with the University of Florida Health (UF Health).

Baptist Health, meanwhile, wanted to rebuild its oncology program after losing Marks’ group, so it became a member of the MD Anderson network and opened a cancer center. The Mayo Clinic, which has had a presence in Jacksonville since 1986, acquired and then sold a local hospital, and created a cancer center complex. ICON was formed by physicians who left US Oncology about 15 years ago in response to changes in the company’s revenue-sharing system. The city of 870,000 residents now has four major oncology providers and no small groups, Marks said.

“Jacksonville is probably one of the most competitive oncology markets there is,” said Marks, who retired in 2014.

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