Strategic Planning by Oncology Practices Can Provide a Roadmap to a Thriving Future

Elaine Estes

July 2018, Vol 8, No 7 - Practice Administration, Strategic Planning


Strategic planning for oncology practices is more important today than ever before, with the oncology landscape rapidly evolving, driven by complex issues not encountered previously. For example, the emergence of value-based care has added new layers of complexity to cancer care, because clinical changes associated with team-based care and documentation and data-­tracking requirements are significant. Practices today are also tasked with finding ways to expand patient access to ancillary support services that improve satisfaction and outcomes, while also keeping costs down.

The competitive advantage given to hospital-based cancer facilities is also a concern, because those are typically reimbursed 40% to 60% more than community practices for the same service. Consequently, hospitals have been building and acquiring cancer centers at breakneck speed over the past decade, in search of enhanced revenue. This has caused a massive consolidation of oncology practices, and a significant migration of cancer care from community centers to the hospital setting.

The 340B drug program that enables many hospitals to buy cancer drugs at a discount gives them an even greater advantage. This market consolidation has caused increased difficulty for patients who need convenient access to care—navigating a vast hospital campus is not easy for a healthy person, much less for a patient with cancer undergoing treatment. In addition, the higher hospital reimbursement rates translate into increased costs for patients, adding financial burden and stress at a time when they should be concentrating on their health, not their pocketbooks.

Navigating through this volatile landscape has become increasingly challenging. As a result, it is imperative for oncology practices today to stay abreast of the changes occurring in oncology to succeed.

The US Oncology Network places a strong focus on strategic planning for its affiliated oncology practices. Although practices cannot control the local environment they operate in, they can control how they respond to it. Through thoughtful strategic planning, oncology practices can prepare for what is coming and capitalize on opportunities that will enable them to thrive.

Strategic Planning Can Drive Success

In simple terms, strategic planning is a process that defines a practice’s priorities and strategies for the foreseeable future and then allocates resources to enable the practice to execute those strategies.

Strategic planning can also help practices to succeed, by providing advantages that enhance key business, operational, and/or clinical areas.

Financial Benefits

Strategic planning and executing on priorities have definite financial benefits. For example, a large, 29-physician multidisciplinary practice in The US Oncology Network that has been in business for more than 40 years built its first strategic plan approximately 3 years ago. After executing on just one of its priorities, the practice anticipated adding approximately $2.8 million to its bottom line.

Another large multidisciplinary practice in the network created its strategic plan in 2015. Its first priority was launching an in-office dispensing oral drug program, because the use of oral drugs has increased significantly in recent years. Physician leaders believed that in-office dispensing would deliver less fragmented care, provide patients a convenient service, decrease costs, and improve adherence. In addition to achieving these goals, executing on the in-office dispensing priority opened up an exciting new revenue stream for the practice.

Establishing a Common Culture

Strategic planning can also play a role in creating unity and a common culture within a practice. It is very common today for oncology practices to merge to take advantage of the benefits that a larger organization can provide. When this occurs, it is common for employees from each individual practice to maintain their existing company culture, with differing ideas about what is most important.

Strategic planning sessions can bring people from the different practices together, unifying them around shared priorities and goals. During The US Oncology Network planning sessions, participants usually enter the room with their own ideas of what their practice should be doing, but by the end of the session, they leave as a more cohesive group committed to common goals. Differences may still exist, but a definite shift is evident in attitudes that fosters teamwork.

Program Benefits

Strategic planning is an excellent tool to drive initiatives and new programs. A good example is how The US Oncology Network used strategic planning to prepare for participating in the Oncology Care Model (OCM). When we first started working with different practices on strategic planning in 2015, the OCM had not yet started, but it was on our radar.

Many practices knew they wanted to participate but had no infrastructure in place to support it. Consequently, preparing for the OCM was a priority in the strategic plans of many of our affiliated practices. Since then, network-affiliated practices participating in the OCM have done an excellent job executing on this priority, adding critical services, infrastructure, and tracking tools.

Focusing on the OCM in our strategic plans led to success for our network on 2 different fronts. First, practices are offering a superior portfolio of services to their patients, providing enhanced care and support. Second, several practices parlayed the additional infrastructure and services developed for the OCM into value-­based agreements with commercial payers. This enabled the practices to offer enhanced services to more people in their communities rather than solely to Medicare OCM patients.

Strategic Planning Best Practices

Practices have good intentions when they develop a plan, but they often fail to provide the structure required to ensure its success. The following 5 steps are a few best practices for developing a strategic plan and bringing it to life:

  1. Set 1 day aside for all decision makers to come together, preferably off-site and with no interruptions, so that they can focus on building the plan. Participants may initially resist, but it is critical to make the planning session the sole priority for the day: do not merge the session into another meeting
  2. Build a roadmap for the next few years based on the outcomes from the planning session—set priorities, establish goals, outline your action plan, determine timelines, and assign owners to all activities. Without this level of detail, execution of the strategic plan will most likely fall by the wayside
  3. Set realistic timelines: initiatives may need to be prioritized rather than executed simultaneously, because of limited physician and staff time
  4. Dedicate the necessary financial and staff resources to execute the priorities
  5. Stick to the plan; new ideas brought forth after the plan is in place should be carefully reviewed.

Thrive with Strategic Planning

Community oncology practices can successfully navigate the evolving landscape with a well-thought-out strategic plan that provides a roadmap to the future. Practices that focus only on today’s priorities will be left far behind in this rapidly changing environment.

It is imperative to stay abreast of trends affecting oncology, as well as local market conditions, such as ­demographics, referral patterns, economics, and competition. This knowledge can provide the foundation for a dynamic strategic plan that empowers practices to respond to threats in their environment, as well as to opportunities that can help practices remain vibrant and viable in the future.