Putting in Longer Hours for World-Class Care

Oncology Business News®, July 2016,

Ventura County Hematology Oncology Specialists opened its doors 45 years ago and has long occupied a comfortable niche in its local market.

Lynn Kong, MD

Ventura County sits right next to Los Angeles County, but it often seems a world away. The latter’s 10 million residents support some of the nation’s largest cancer conglomerates, while the former’s 840,000 people support no oncology practice larger than Ventura County Hematology Oncology Specialists—an independent partnership with five doctors and three offices.

Ventura County Hematology Oncology Specialists (HOS) opened its doors 45 years ago and has long occupied a comfortable niche in its local market. The only other substantial independent oncology practice nearby specializes in serving HMO patients, and the county medical center accepts many Medicare patients and patients without coverage. HOS has thus been able to attract many local patients with either traditional insurance or Medicare.

Now, for the first time ever, the practice faces competition from a big-name behemoth. The University of California at Los Angeles (UCLA) has recently opened an oncology office with two doctors in the city of Ventura.

“UCLA obviously has more name recognition than we ever will, but we have deeper roots in this community, stronger relationships with referring doctors, more offices for patients, and a wider array of treatments to offer locally,” said Lynn Kong, MD, a partner who has been at HOS for more than 20 years.

“We haven’t really seen any reduction in our new patient referrals since they opened six months ago, and—although we’re obviously going to keep a close eye on them—we feel good about our ability to weather the challenge. . . . Despite the relative absence of competition in western Ventura, this practice has worked hard to continually improve care; and that has earned us a lot of recognition, along with the right to participate in cutting-edge programs.”

HOS maintains Quality Oncology Practice Initiative (QOPI) certification from ASCO. Its doctors have also secured accreditation from the American College of Surgeons’ Commission on Cancer for the oncology programs they run at St. John’s Regional Medical Center in Oxnard and Community Memorial Hospital in Ventura. The practice was an early participant in the CMS Physician Quality Reporting System and the electronic health records-meaningful use (EHR-MU) initiative, which is designed to speed the transition to electronic records. Participation in those programs, along with the QOPI certification, helped convince CMS to pick the Ventura County group to participate in the Oncology Care Model (OCM), a 5-year pilot improvement program led by the Center for Medicare & Medicaid Innovation.

The goal of the OCM is to pay healthcare providers in ways that give them a financial incentive to improve care coordination, appropriateness of care, and access to care for chemotherapy patients. The program gives providers a per-beneficiary-per-month payment and the potential for performance-based payments, which are designed to encourage practices to improve care while spending less to provide it. (Participation was to begin on July 1, slightly after the interviews for this story.)

Like many successful independents, HOS offers its patients access to clinical trials. The practice has actually been working on such research with academic hospitals and pharmaceutical companies for decades now, but it is looking to participate in even more trials because stories about the success of immunotherapy have sparked patient interest in experimental treatments. Another feature that HOS shares with many successful independents is an in-house pharmacy for both chemotherapy and outpatient medication. As drug prices have increased and payer formularies have become more restrictive, the practice has shifted from a model of stocking treatments to a model of ordering treatments as needed; but its pharmacy operation still saves many patients the trouble of driving to a separate pharmacy and generates extra revenue for HOS. There are, of course, some services that a five-physician practice cannot offer in-house. HOS does not perform surgery, radiation, or imaging. Patients who need such diagnostic and treatment tools need not travel far, however. They are referred to the oncology departments at St. John’s Regional Medical Center or Community Memorial Hospital—which, again, are overseen by HOS doctors.

HOS, working in conjunction with its hospital partners, will treat any common cancer except acute leukemia, which gets referred to tertiary care facilities in Los Angeles. “A lot of new patients will come in, get tested and ask what treatment we propose. Then, they will go down to whatever they believe to be the best cancer hospital in LA—or sometimes the country—and they’ll get a secondgy opinion about what treatment they should receive.

Then, when they hear the famous hospital recommend the exact same treatment that our doctors recommend, they come back and receive their treatment here, much closer to home,” said Marissa Rivera, the administrator at HOS.

“Our physicians do the work to keep up with the research,” Rivera said. “Any small practice can provide world-class care for most patients. It’s just a matter of making the effort and doing extra work.”

Small practices need to put in that extra work, largely because their physicians and staff members cannot specialize nearly as much as their counterparts at large organizations. A single physician at MD Anderson can focus on a single tumor type and leave the rest to colleagues. HOS voluntarily adds to the extra work by offering extra services designed to attract extra patients and satisfy existing patients. The decision to maintain three offices, for example, requires extra staffing and complicates life by multiplying landlords, electric bills and everything else. Patients typically save just a few minutes from having a shorter drive to each appointment—the offices are less than 10 miles from each other.

Another new service that has justified extra labor costs is financial counseling. Many of the practice’s patients, even well-insured ones, had expressed surprise about the personal expense associated with cancer care in this time of rising deductibles and co-payments. A fair percentage of them were struggling to pay the unexpectedly high bills. The practice responded by hiring a counselor who gives patients up-front cost estimates and helps them budget for those costs. In cases where patients cannot afford to pay for care, the counselor looks for public or private assistance programs that can provide loans or grants.

“Out-of-pocket costs used to be low enough that virtually all of our insured patients could cover them. What’s more, reimbursement rates were high enough that we could offer direct assistance to those patients who could not pay in full,” Kong said. “Unfortunately, we just don’t have that flexibility anymore. Reimbursement rates have fallen just as legislation has intentionally forced patients to pay more of their own medical bills. Our counselor helps us continue getting necessary care to patients without bankrupting ourselves.” Kong and her partners would love to improve profits by merging with other independent practices and translating the increased operational efficiency and bargaining power into lower business costs. Unfortunately, aside from a decision to add a sixth doctor as of August, the partners see no obvious way to grow. The only other independent practice in the immediate area—the practice that handles HMO patients—doesn’t appear to be a good fit. Mergers with practices in more distant locales such as Santa Barbara or the Valley present logistical difficulties.

“The combination of mountain ranges and terrible traffic make it hard to get around. Places that are practically next door on the map can take more than an hour in the car. If we merge with any practice outside the immediate area, it’s going to be hard avoiding things like 90-minute drives for doctors who are on-call at a hospital far from home,” Kong said. “Still, we are always exploring options. A five-doctor or six-doctor practice simply cannot be as efficient as a larger operation. If we can find an intelligent way to expand, we’d love to do it.”