National Oncology Practice Benchmark, 2011 Reporton 2010 Data
By Thomas R. Barr, MBA, and Elaine L. Towle, CMPE
Oncology Metrics, a division of Altos Solutions, Los Altos, CA
IntroductionThe National Practice Benchmark (NPB) was developed byOncology Metrics (Los Altos, CA), a team of professionals withmany years of experience in oncology practice management,surveys, and benchmarking. Benchmarking is widely recog-nized as the best, most efficient way to find opportunities toimprove your practice and then monitor progress after correc-tive action is taken. The NPB provides important and mean-ingful data for oncology practices to use in today’s challengingpractice environment.
Approximately 1,600 practice administrators, medical on-cologists, and other key staff members from 1,400 practicesacross the country were invited to participate in the 2011 NPB.Invitations were sent via e-mail, and the survey was completedentirely online. Practices were instructed to submit only onesurvey per practice. Respondents who completed the entire sur-vey received an electronic version of the survey report as well asa personalized report comparing their practices to the entiredata set on several key benchmarks. Additionally, the first 65participants to complete all applicable questions were eligiblefor a $25 gift card.
The 2011 NPB survey reflects data from calendar year 2010or the most recently completed 12-month accounting period.Practices were not required to complete all questions, and datafrom incomplete surveys are included in the final survey results.Data were submitted by hematology/oncology (HemOnc) sin-gle-specialty practices as well as by multispecialty practices. Atotal of 117 survey responses were submitted. Five were deter-mined to be duplicates and were discarded. The number ofresponses to individual questions varied. Responses were re-ceived from practices in 37 states. Six states—California, Flor-ida, Illinois, New York, Ohio and Pennsylvania—had 5 ormore practices respond.
All responses are included for the qualitative informationpresented in this report (demographics, operations, informa-tion systems). Level 1 quantitative benchmarks are reportedonly for practices that met specific exclusion criteria. To beincluded in the level 1 quantitative benchmarks, practices musthave submitted five key data elements: number of full-timeequivalent (FTE) HemOnc physicians, total revenue, cost ofgoods paid for (COGPF), number of new HemOnc patients inthe office setting, and number of new HemOnc patients in theinpatient hospital setting.
Criteria were then applied to exclude practices reporting:
• higher drug revenue than total revenue,• higher COGPF than total revenue, and
• drug revenue less than 0.5% or greater than 1.5% ofCOGPF.
A total of 37 practices with 340 FTE HemOnc physicians and430 FTE physicians met these criteria and are included in thelevel 1 analysis. Additional exclusions were applied to specificbenchmarks for data outside the range of credible results.
Level 2 benchmarks include measures of staffing, staffproductivity, laboratory, imaging, closed-door pharmacy,inventory, accounts receivable, and radiation oncology.These benchmarks are not limited to the level 1 inclusion/exclusion criteria; all practices that provided appropriatedata are included.
ConfidentialityOncology Metrics is committed to protecting the confidential-ity of individual practice data and makes a commitment to NPBparticipants: “All of the individual data that you provide in thesurvey are absolutely confidential and will never be disclosed.Access to the data file that Oncology Metrics creates from thissurvey will never be made available to any party. OncologyMetrics will create analytic reports including aggregated datafrom this survey but will always publish in a manner thatcompletely obscures the source of the data so that no readercan make any supported inference of data to any individualpractice.”
Understanding the NPB ReportNPB data are presented in an easy-to-understand format pri-marily using pie charts and bar graphs.
• Pie charts show the quantitative relationship of items in onedata series proportional to the sum of the items. The datapoints in a pie chart are displayed as a percentage of thewhole pie.
• Bar graphs illustrate comparisons among individual items.In horizontal bar graphs, categories are organized along thevertical axes and values along the horizontal axes. Verticalbar graphs are useful for showing data changes over a periodof time or for illustrating comparisons among items. Inthese vertical bar graphs, categories are typically organizedalong the horizontal axes and values along the vertical axes.
NPB data are generally presented in vertical bar graphs using25th percentile, 50th percentile (or median), average, and 75thpercentile. When interpreting these data, remember that a per-centile is a point on a scale below which a certain percentage ofresponses fall. For example, the 75th percentile is the point in a
Original Contribution
NOVEMBER 2011 SUPPLEMENT • jop.ascopubs.org 67sCopyright © 2011 by American Society of Clinical Oncology
distribution of data below which 75% of responses fall. Like-wise, the 25th percentile is the point below which 25% ofresponses fall. Note that a percentile may or may not corre-spond to a value judgment about whether it is good or bad. Theinterpretation of whether a certain percentile is good or baddepends on the context to which the data apply. In some situ-ations, a low percentile would be considered good—for exam-ple, number of days sales are outstanding. In other contexts, ahigh percentile might be considered good, such as the numberof new patients per FTE HemOnc physician.
Definitions are provided for the data elements presented inthis report. Data are presented on the basis of FTE HemOncphysician or FTE physician given that respondents representboth HemOnc single-specialty practices and multispecialtypractices.
Our goal in producing and presenting this is to providereaders with a valuable tool to manage today’s increasingly com-plex oncology practice. We have not attempted to draw conclu-sions from these data but would refer you to our article in theSeptember issue of Journal of Oncology Practice.1
Results of the National Oncology Practice Benchmark,2011 Report on 2010 Data, are presented here.
Respondent DemographicsAs previously noted, 117 responses were submitted to the 2011NPB. This is a marked decrease in survey participation, downfrom 193 responses in 20102 and 208 responses in 2009.3 Theauthors speculate that there may be complex contributing fac-tors for this decrease. The survey has grown in complexity andtakes considerable time to complete (particularly for first-timecontributors), and the decrease in participation may be causedby the complexity of the survey tool itself. We will consider thatissue when developing the 2012 survey on 2011 data. Addition-ally, with the competing priorities in today’s complex practiceenvironment, it is hard to find the time to complete the survey.Finally, we are seeing structural changes in the business organi-zation of practices, including transitions to the hospital or aca-demic setting. In both of these environments, quantitative datacan be much more difficult to collect.
The Oncology Circle is a national benchmarking collabor-ative for oncology practices that was developed in 2002 andoperated by Oncology Metrics. Practices participating in theOncology Circle generally have four or more medical oncolo-gists; professional practice management including a physicianleader and executive director or practice administrator; andagree to share detailed practice data, usually extracted directlyfrom the practice management system and/or electronic medi-cal record (EMR) in a deidentified manner to protect confiden-tial patient information. Oncology Circle practices alsocomplete the NPB survey. In exchange, Oncology Metrics pro-vides detailed benchmark reporting to the practices at both thepractice and physician level and conducts two meetings a yearduring which data are presented and the Oncology Circle mem-bers share best practices. This year for the first time, OncologyCircle practices represent the majority of the practices in thelevel 1 quantitative benchmarks (75%). We believe this is be-
cause of the increasing complexity of the survey instrument andrecognize that we may need to transition more practices into theOncology Circle format to facilitate the collection and report-ing of this complex and important practice information.
The first seven figures present demographic information forthe survey respondents. Figure 1 shows the services providedby the practices. Nearly all of the reporting practices providemedical oncology and hematology services; three quarters of therespondents offer laboratory services and clinical research; and athird of the practices provide imaging, a closed-door pharmacy,genetic counseling, and radiation oncology services. This is sim-ilar to the services provided by practices responding to previousyears’ surveys.
Respondents were asked to provide the number of FTEHemOnc physicians in the practice (Fig 2) as well as the num-ber of FTE physicians in all specialties (Fig 3). For the purposesof the survey, an FTE physician is defined as a physician whospends four full days per week in clinic seeing patients and partof a fifth day on clinic business and who shares call equally withother physicians. The average number of FTE HemOnc physi-cians in the reporting practices is 7.9 and the average number ofFTE physicians is 9.8.
The number of clinical sites (Figs 4 and 5) and chemother-apy chairs (Figs 6 and 7) are additional indications of practicesize and were reported on an FTE basis. For example, a clinicalsite open five days per week is reported as 1.0; a site open threedays per week is reported as 0.6. Similarly, a chemotherapy
0.2 0.4 0.6 0.8 10
Surgical oncologyOther
Gynecologic oncologyRadiation oncologyGenetic counseling
Closed-door pharmacy
Clinical trialsLaboratory
Imaging
HematologyMedical oncology
Respondents Providing Service (%)
Figure 1. Services provided by practice (n � 108 practices).
No.
of F
TE H
emOn
c Pe
r Pra
ctic
e25th
Percentile50th
PercentileAverage 75th
Percentile
12
10
8
6
4
2
0
Figure 2. Number of full-time equivalent (FTE) hematology/oncology(HemOnc) physicians per practice (n � 54 practices, 427 HemOncphysicians).
68s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
chair used only one day per week is reported as 0.2; a chair thatis available five days per week but was not put in service untilJuly 1 is reported as 0.5.
Practice Operations and PlanningPractices were asked to describe current business structure froma list of four options: academic practice, physician-ownedpractice, hospital-owned practice, and other (Fig 8). Physi-cian-owned practices represent the majority of the survey re-spondents. Respondents were also asked how long they expecttheir current business structure to remain unchanged and via-
No.
of F
TE P
hysi
cian
s Pe
r Pra
ctic
e
25thPercentile
50thPercentile
Average 75thPercentile
12
14
10
8
6
4
2
0
Figure 3. Number of full-time equivalent (FTE) physicians per practice(n � 54 practices, 527 FTE physicians).
No.
of C
linic
al S
ites
Per P
ract
ice
25thPercentile
50thPercentile
Average 75thPercentile
4.04.5
3.53.02.52.01.51.00.5
0
Figure 4. Number of clinical sites per practice (n � 104 practices).
No.
of C
linic
al S
ites
Per F
TE H
emOn
c
25thPercentile
50thPercentile
Average 75thPercentile
0.6
0.7
0.5
0.4
0.3
0.2
0.1
0
Figure 5. Number of clinical sites per full-time equivalent (FTE)hematology/oncology (HemOnc) physician (n � 54 practices).
No.
of C
hem
othe
rapy
Ch
airs
Per
Pra
ctic
e
25thPercentile
50thPercentile
Average 75thPercentile
14
16
12
10
8
6
4
2
0
Figure 6. Number of chemotherapy chairs per practice (n � 100 prac-tices).
No.
of C
hem
othe
rapy
Ch
airs
Per
FTE
Hem
Onc
25thPercentile
50thPercentile
Average 75thPercentile
7
8
6
5
4
3
2
1
0
Figure 7. Number of chemotherapy chairs per full-time equivalent (FTE)hematology/oncology (HemOnc) physician (n � 54 practices).
86%
10%
3% 1%
Physician-owned practice
Hospital-owned practice
Other
Academic practice
Figure 8. Current business structure (n � 106 practices).
54%
11%
13%
22%
For the foreseeable future
For at least 5 years
For another year or so only
We are changing now
Figure 9. Responses to survey question “How long do you expectthis business structure will remain unchanged and viable?” (n � 106practices).
National Oncology Practice Benchmark, 2011 Report on 2010 DataNational Oncology Practice Benchmark, 2011 Report on 2010 Data
NOVEMBER 2011 SUPPLEMENT • jop.ascopubs.org 69sCopyright © 2011 by American Society of Clinical Oncology
ble. These results are presented in Figure 9. A comment fieldwas provided for this question, and comments included “cur-rently negotiating new contracts with payers,” “hospital buy-out in process,” “looking at joint ventures with hospitals,”“negotiating with hospitals,” and “planned merger for thisyear.”
A new question was added this year to ask survey respon-dents to rank the pressures that impact their business decisions(Fig 10). Four options were provided and described:
• Competitive Pressures (consider market competition)• Cost Pressures (consider drug costs, rent, staff costs, physi-
cian compensation, general operating costs, and so on)
• Payer Pressures (consider declining reimbursementrates, contracting, preauthorization/precertification re-quirements, retrospective denials, audits, underinsuredpatients, and so on)
• Other.
Almost one-third of those responding to this question includedcomments that are summarized in Table 1 and reflect a widerange of challenges facing oncology practices today.
Another new survey question was added to identify howdrugs are purchased or procured. Results are presented in Fig-ures 11 to 15 (n � 101 practices). Practices were instructed toestimate the dollar amount in each of five categories for the12-month period. The categories included:
• traditional buy and bill (the business entity purchases drugsand bills payers),
• 340B pricing,• specialty pharmacy/brownbagging (drugs are ordered through
a specialty pharmacy or preferred provider who delivers to thepatient who then transports to the office),
• specialty pharmacy/whitebagging (drugs are orderedthrough a specialty pharmacy or preferred provider andthen delivered directly to the practice), and
• drugs are not purchased by the practice.
Payer mix information was requested from practices for ma-jor payer categories on both a charge and a payment basis(Figs 16 and 17). Payer categories and their survey definitioninclude:
• Medicare (include fee-for-service and health maintenanceorganization)
• commercial (include Blue Cross Blue Shield and all othercommercial payers)
• Medicaid (include fee-for-service and health maintenanceorganization),
• VA/Champus/Tricare (include any military payers, bothactive duty and retired), and
• self-pay.
Respondents were also asked to indicate the percentage of pa-tients on Medicare in their practice who did not have secondaryinsurance coverage (Fig 18) and were instructed to provideestimates if actual numbers were not available.
Practice Guidelines and Clinical PathwaysThe survey asked whether physicians regularly use practiceguidelines or clinical pathways in patient care (Fig 19). Prac-tice guidelines were defined as evidence-based recommenda-tions for treatment. Clinical guidelines were defined asstandard protocols for treating specific groups of patientswith cancer; standardization of care processes is a key ele-ment.
Additional questions were asked about the use of clinicalpathways, including the source of the pathways (Fig 20),whether the practice measures physician compliance with path-ways (Fig 21), and if not, why not (Fig 22). Several respondents
28%
31%
8%
33%
Competitive pressures
Cost pressures
Payer pressures
Other
Figure 10. Responses to survey question “What pressures are impact-ing your business decisions?“ (n � 102 practices).
Table 1. Respondent Comments Regarding Pressures Im-pacting Business Decisions
Comment
“Collaboration with hospitals”
“Concern for increased amounts for which patients are responsible”
“Economy”
“EMR and equipment needed to accommodate installation—scanners,computer upgrades, servers, new phone lines, etc.”
“Health care reform” and “regulatory requirements”
“Higher patient deductibles, copays, co-insurance”
“Inability to recruit new physicians”
“Internal decision making—compensation methodology, new providerrecruitment, NPP use, etc.”
“Internal structure dynamics”
“Organizing an oncology-specific infrastructure with a hospital-ownedpractice”
“Outside guidelines for treating patients”
“Payer and cost pressures are tied for importance”
“Overhead”
“Physician/hospital alignment”
“Prior authorizations and step therapy taking away the physicians’ ability totreat”
“Staffing: both physicians and nurses in short supply”
“Drug distributor system is broken and is the No. 1 reason our drug cost isincreasing; pressure to use specialty pharmacies”
“Uninsured and underinsured patients”
“The unknown”
Abbreviations: EMR, emergency medical record; NPP, nonphysician practitioner.
70s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
noted that they are just beginning to measure compliance orthat they plan to when EMR is implemented. One respondentnoted that it is “difficult to get all physicians to agree as agroup.”
Information Systems and Incentive ProgramsThe survey requested information from participating practicesabout the use of technology and participation in the Centers forMedicare and Medicaid Services incentive programs. Sixty-eight percent of respondents indicated that they generate pre-scriptions using an ePrescribing system (Fig 23), and 60%
Trad
ition
al B
uy
and
Bill
(%)
No. of Respondents10 20 30 40 50 60 700
< 1010-1920-2930-3940-4950-5960-6970-7980-8990-99
100
Figure 11. Percentage of drugs purchased using the traditional buy-and-bill method.
340B
Pric
ing
(%)
No. of Respondents0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.54.00
< 1010-1920-2930-3940-4950-5960-6970-7980-8990-99
100
Figure 12. Percentage of drugs purchased using 340B pricing.
Spec
ialty
Pha
rmac
y/Br
own
Bagg
ing
(%)
No. of Respondents2 4 6 8 10 12 140
< 1010-1920-2930-3940-4950-5960-6970-7980-8990-99
100
Figure 13. Percentage of drugs purchased using the specialty phar-macy/brown bagging method.
Drug
s N
ot P
urch
ased
by
Pra
ctic
e (%
)
No. of Respondents0 1 2 3
< 1010-1920-2930-3940-4950-5960-6970-7980-8990-99
100
Figure 15. Percentage of drugs not purchased by the practice.
46%
2%
5%
2%
45%
Commercial
Self-pay
Medicaid
VA/Champus/Tricare
Medicare
Figure 16. Payer mix on the basis of charges generated (n � 48practices).
39%
2%
5%
2%
52%
Commercial
Self-pay
Medicaid
VA/Champus/Tricare
Medicare
Figure 17. Payer mix on the basis of collected revenue (n � 48practices).
Spec
ialty
Pha
rmac
y/W
hite
Bag
ging
(%)
No. of Respondents2 4 6 8 10 12 14 16 180
< 1010-1920-2930-3940-4950-5960-6970-7980-8990-99
100
Figure 14. Percentage of drugs purchased using the specialty phar-macy/white bagging method.
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expect to receive an ePrescribing incentive payment for 2010(Fig 24).
In addition, practices were asked whether they currentlyuse an EMR system (Fig 25) and which EMR they use (Fig26). The survey also asked practices to indicate their readi-ness for the Medicare EMR incentive program in 2011 bychoosing one response to the statement: “To be eligible for afirst-year payment for the Medicare EMR incentive programin 2011, you must be a meaningful user of an Office of theNational Coordinator-Authorized Testing and CertificationBody– certified EMR by October 1, 2011.” Results are de-picted in Figure 27 and show that almost 40% of respon-
dents say they have a certified EMR and expect to receive anincentive payment for 2011.
Level 1 Quantitative BenchmarksReporting on level 1 quantitative benchmarks was limited topractices that submitted minimum data elements, including:
• number of FTE HemOnc physicians,• total revenue,• COGPF,
No.
of P
ract
ices
Re
porti
ng
Medicare Patients Without Secondary Insurance (%)
0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.08 0.10 > 10
98
10
76543210
Figure 18. Percentage of Medicare patients without secondary insur-ance coverage (n � 47 practices).
Prac
tices
Fol
low
ing
(pro
porti
on)
Guidelines
NoYes
Pathways
1.00.90.80.70.60.50.40.30.20.1
0
Figure 19. Responses to survey question “Do practice physicians reg-ularly use practice guidelines or clinical pathways in patient care?” (n �106 practices).
0 5 10 15 20 25 30 35
Innovent/US Oncology
UPMC
Hospital generated
Payer generated
P4
Other
Practice generated
No. of Practices Reporting Source
Figure 20. Source of clinical pathways (n � 80 practices). P4, P4Healthcare (Dallas, TX); UPMC, University of Pittsburg Medical Center(Pittsburg, PA).
46% 54% No
Yes
Figure 21. Response to survey question “Do you routinely measurephysician compliance with clinical pathways?” (n � 61 practices).
0 2
Too busy
Other
EMR does not provide this functionality
Too complicated
Not important to our practice
Physicians don't want to know
4 6 8 10 12
No. of Practices Reporting Reason
Figure 22. Reasons given for not measuring compliance with clinicalpathways (n � 37 practices). EMR, electronic medical record.
32%
30%
38%
No
Yes, ePrescribing is part of our EMR system
Yes, we use a stand-alone ePrescribing program
Figure 23. Responses to survey question “Do you generate prescrip-tions using an ePrescribing system?” (n � 107 practices). EMR, elec-tronic medical record.
72s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
• number of new HemOnc patients in the office, and• number of new HemOnc patients inpatient in the
hospital.
Criteria were then applied to exclude practices reporting:• higher drug revenue than total revenue,• higher COGPF than total revenue, and• drug revenue less than 0.5% or greater than 1.5% of
COGPF.
A total of 37 practices with 340 FTE HemOnc physicians and430 FTE physicians met these criteria and are included in thelevel 1 analysis. Additional exclusions were applied to specificbenchmarks for data outside the range of credible results.
HemOnc ProductivityNew patient flow into a practice continues to be an importantmeasure of productivity and an essential tool for strategic plan-ning. In the past, we have asked practices to report the numberof new patients on the basis of codes for consultation and newpatient services. Medicare no longer recognizes the consultationcodes that have historically been used to report these services,and because of this, coding patterns are no longer a reliablesource for this information. This year, we asked practices toreport the number of new patients by specialty (radiation on-cology or HemOnc) and by place of service (office or inpatienthospital) and did not specify that they report on the basis ofspecific codes. A new patient is defined as one who has notreceived services in the practice in the last three years. Thenumber of new patients per FTE HemOnc physician is re-ported in aggregate in Figure 28 and by site of service (office vhospital) in Figure 29. Similar to last year’s results, approxi-mately two thirds of the new patients are seen in the officesetting.
In addition to reporting new patients, practices were alsoasked to report on the number of established patient visits in theoffice and in the hospital setting according to codes; office visitsincluded codes 99212 to 99215, and hospital visits includedcodes 99217 to 99220, 99221 to 99223, 99231 to 99233,99234 to 99236, 99238 to 99239. Data are reported in aggre-gate (Fig 30) and by site of service (Fig 31). Data are not col-lected or reported on an individual code basis.
In the 2010 benchmarking work that was completed for theOncology Circle practices, data were collected for individualcodes and converted to work relative value units (wRVU) forproductivity reporting. In that work we include the physicianwRVUs for all services billed in 2010 in the Oncology Circlepractices and determined that 6,000 wRVU is the standardwork output for one FTE HemOnc physician.
Revenue and ExpenseIn the survey instrument, revenue was defined as cash collec-tions for the 12-month period as reported on the practice’sprofit and loss statement and further described as all moneyreceived by the business entity during the year for any services,regardless of when that service was provided. Total revenue isthe same as gross income as reported on a cash basis financialstatement and includes all collected revenue for the period,medical revenue plus nonmedical revenue. Nonmedical reve-nue is defined as total collected revenue for the period for ser-vices other than the provision of medical care. Examples include(but are not limited to) research revenue, medical directorships,publication revenue, interest income, and so on. Total revenueper FTE HemOnc physician and total medical revenue (totalrevenue less nonmedical revenue) per FTE HemOnc physicianare presented in Figure 32. Revenue mix by service line is pre-
60%
40%
No
Yes
Figure 24. Responses to survey question “Do you expect to receive anePrescribing incentive payment for 2010?” (n � 107 practices).
64%
36%
No
Yes
Figure 25. Responses to survey question “Does your practice currentlyuse an electronic medical record?” (n � 108 practices).
0.05 0.10 0.15 0.20 0.300
Varian (ARIA)Elekta (IMPAC)
Altos (OncoEMR)Other
Homegrown EMRAllscripts (Misys)
NextGenEpic
Centricity (GE Healthcare)SOAPware
Rabbit RecordsIntellidose
IntegrateCentricity and Intellidose
0.25
Practices Using EMR (%)
Figure 26. Electronic medical record (EMR) system used by surveyrespondents (n � 68 practices).
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0.10 0.15 0.30 0.35 0.450
My EMR is unlikely to meet certification in 2011; I will not be eligible for an incentive payment.
My hospital/health care system controls the EMR decision and
these questions are not relevant.
I do not anticipate implementing an EMR in 2011.
I have a certified EMR and anticipate payment.
I am actively looking to acquire a certified EMR to be eligible in 2011.
I plan to begin participation in 2012.
0.400.250.200.05
Practices Reporting Plan (%)
Figure 27. Plans for participation in the Medicare electronic medical record (EMR) incentive program in 2011 (n � 106 practices).
No.
of N
ew P
atie
nts
Per F
TE H
emOn
c
25thPercentile
50thPercentile
Average 75thPercentile
350
400
300
250
200
150
100
50
0
Figure 28. Number of new patients per full-time equivalent (FTE)hematology/oncology (HemOnc) physician (n � 37 practices).
No.
of N
ew P
atie
nts
Per F
TE H
emOn
c
25thPercentile
50thPercentile
Average 75thPercentile
350
400 OfficeHospital
300
250
200
150
100
50
0
Figure 29. Number of new patients per full-time equivalent (FTE)hematology/oncology (HemOnc) physician by site of service (n � 37practices).
No.
of E
stab
lishe
d Pa
tient
Vi
sits
Per
Hem
Onc
25thPercentile
50thPercentile
Average 75thPercentile
4,0004,500
3,5003,0002,5002,0001,5001,000
500
0
Figure 30. Number of established patient visits per full-time equivalenthematology/oncology (HemOnc) physician (n � 37 practices).
No.
of E
stab
lishe
d Pa
tient
Vi
sits
Per
Hem
Onc
25thPercentile
50thPercentile
Average 75thPercentile
3,000
3,500 OfficeHospital
2,500
2,000
1,500
1,000
500
0
Figure 31. Number of established patient visits per full-time equivalenthematology/oncology (HemOnc) physician by site of service (n � 37practices).
74s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
sented in Figure 33. Total operating expense is defined as totalpractice expense less physician compensation (W-2 salary).This is reported per FTE physician in Figure 34.
Drug Cost, Revenue, and MarginDrug revenue (Fig 35) is defined as total collected revenue fordrugs purchased and provided by the practice. COGPF (Fig 35)is defined as the total of all money paid for drugs in the report-ing period less rebates or other cost reductions received in thesame period. Drug margin (Fig 36) is drug revenue less COGPFand is calculated and reported for all drugs and all payers.Trends in drug revenue as a percentage of total revenue and
Reve
nue
Per H
emOn
c ($
)
25thPercentile
50thPercentile
Average 75thPercentile
5,000,000
6,000,000 Total revenueTotal medical revenue
4,000,000
3,000,000
2,000,000
1,000,000
0
Figure 32. Total revenue and total medical revenue per full-time equivalent hematology/oncology (HemOnc) physician (n � 37practices).
8%
5%
2% 2% 2%
8%
8%
65%
Drugs
Infusion
Imaging
Laboratory
Nonmedical
Closed-door pharmacy
Radiation
Evaluation and management
Figure 33. Revenue mix by service line (n � 37 practices).
Oper
atin
g Ex
pens
e Pe
r FTE
Phy
sici
an ($
)
25thPercentile
50thPercentile
Average 75thPercentile
3,500,000
4,000,000
3,000,000
2,500,000
2,000,000
1,500,000
500,000
1,000,000
0
Figure 34. Total operating expense per full-time equivalent (FTE) phy-sician (n � 37 practices).
Drug
Rev
enue
and
COG
PF
Per F
TE H
emOn
c ($
)
25thPercentile
50thPercentile
Average 75thPercentile
3,500,000
4,000,000
3,000,000
2,500,000
2,000,000
1,500,000
500,000
1,000,000
0
Drug revenueCOGPF
Figure 35. Drug revenue and cost of goods paid for (COGPF) perfull-time equivalent (FTE) hematology/oncology (HemOnc) physician(n � 37 practices).
Drug
Mar
gin
(% o
f tot
al re
venu
e)
25thPercentile
50thPercentile
Average 75thPercentile
0.12
0.14
0.10
0.08
0.06
0.04
0.02
0
Figure 36. Drug margin as a percentage of total revenue (n � 37practices).
Drug
Rev
enue
(%
of t
otal
reve
nue)
2005 2006 2007 2008 2009 2010 2011
0.80.7
0.9
0.60.50.4
0.1
0.30.2
0
Figure 37. Drug revenue as a percentage of total revenue from 2005through 2010.
Drug
Mar
gin
(% o
f tot
al re
venu
e)
0.25
0.20
0.15
0.10
0.05
02005 2006 2007 2008 2009 2010 2011
Figure 38. Drug margin as a percentage of total revenue from 2005through 2010.
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drug margin as a percentage of total revenue are presented inFigures 37 and 38.
Level 2 Quantitative BenchmarksLevel 2 benchmarks include measures of staffing, staff produc-tivity, laboratory, imaging, closed-door pharmacy, inventory,accounts receivable and radiation oncology. These benchmarks
are not limited to the level 1 inclusion/exclusion criteria; allpractices that provided appropriate data are included.
Staffing and ProductivityStaffing information was collected and reported in categories aspresented in Table 2. Staffing information is reported per FTEphysician for some categories such as executive staff and billingstaff, which support all specialties in a multispecialty practice.
All staff/physicianHemOnc staff/HemOnc
No.
of F
TE S
taff
12
10
8
6
4
2
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 39. All staff and all hematology/oncology (HemOnc) staff perfull-time equivalent (FTE) physician and FTE HemOnc physician, re-spectively (n � 39 practices).
All staff/physicianHemOnc staff/HemOnc
Staf
f Sal
ary
Expe
nse
($) 600,000
500,000
400,000
300,000
200,000
100,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 40. Pay for all staff per full-time equivalent (FTE) physician andpay for hematology/oncology (HemOnc) staff per FTE HemOnc physi-cian (n � 33 practices staff all, 36 practices staff all HemOnc).
No.
of F
TE N
onph
ysic
ian
Prac
titio
ners
Per
FT
E He
mOn
c
0
0.05
25thPercentile
50thPercentile
Average 75thPercentile
0.06
0.04
0.03
0.02
0.01
Figure 41. Number of full-time equivalent (FTE) nonphysician practitio-ners per FTE hematology/oncology (HemOnc) physician (n � 36 prac-tices).
Annu
al C
ompe
nsat
ion
($)
75,000
95,000
100,000
25thPercentile
50thPercentile
Average 75thPercentile
85,000
90,000
80,000
Figure 42. Annual compensation per full-time equivalent nonphysicianpractitioner (n � 32 practices).
Table 2. Staffing Categories and Definitions
Category Definition Figures
Staff all All staff working in all departments/specialties in the practice; includes nonphysician practitioners; doesnot include physicians
39, 40
Staff all HemOnc All staff in the HemOnc line of business in the practice; includes nonphysician practitioners; does notinclude physicians
39, 40
Nonphysician practitioners Includes nurse practitioners and physician assistants working the HemOnc line of business 41, 42
Executive staff Includes all executive and senior management staff in all departments/specialties in the practice, all staffmembers who report to the physician executive or the board, and nonphysician practitioners; doesnot include physicians
43, 44, 45
Chemotherapy administrationstaff
Includes all staff responsible for drug purchasing, mixing, delivery to patients, and management of theseprocesses; reported on an FTE basis including percentage of time all staff members spend on theseactivities
46, 47, 48, 49
Billing staff Includes all staff in the billing and collecting process in the practice for all departments/specialties; doesnot include patient financial advocates
50, 51, 52
Patient financial advocate Includes all staff in the patient financial advocate or financial counseling process in the practice for alldepartments/specialties
53, 54
Research staff Includes all staff performing clinical research and research clerical support; does not include physicianresearch time
55, 56
Laboratory staff Includes all laboratory staff employed by the practice 57, 58
Imaging staff Includes all imaging staff employed by the practice 62, 63
Abbreviations: FTE, full-time equivalent; HemOnc, hematology/oncology.
76s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
No.
of F
TE E
xecu
tive
Staf
f Per
FTE
Phy
sici
an
0
0.1
0.3
0.4
0.5
0.6
25thPercentile
50thPercentile
Average 75thPercentile
0.2
Figure 43. Number of full-time equivalent (FTE) executive staff per FTEphysician (n � 40 practices).
Annu
al C
ompe
nsat
ion
($)
0
180,000200,000
25thPercentile
50thPercentile
Average 75thPercentile
160,000
80,00060,000
140,000120,000100,000
40,00020,000
Figure 44. Annual compensation per full-time equivalent executive staff(n � 39 practices).
Annu
al C
ompe
nsat
ion
($)
0
250,000
300,000
25thPercentile
50thPercentile
Average 75thPercentile
100,000
200,000
150,000
50,000
With radiationWithout radiation
Figure 45. Annual compensation per full-time equivalent executive staffin practices with (n � 13 practices) and without (n � 26 practices)radiation oncology.
No.
of C
hem
othe
rapy
Adm
inis
trato
rsPe
r FTE
Hem
Onc
0
2.0
25thPercentile
50thPercentile
Average 75thPercentile
2.5
1.5
1.0
0.5
Figure 46. Number of chemotherapy administration staff per full-time equiv-alent (FTE) hematology/oncology (HemOnc) physician (n � 44 practices).
Annu
al C
ompe
nsat
ion
($)
0
70,00080,000
25thPercentile
50thPercentile
Average 75thPercentile
40,000
60,000
20,00010,000
50,000
30,000
Figure 47. Annual compensation per full-time equivalent chemothera-py administration staff (n � 42 practices).
No.
of I
nitia
l Inf
usio
nsPe
r FTE
Che
mot
hera
pyAd
min
istra
tor
0
200
600
800
1,000
1,200
25thPercentile
50thPercentile
Average 75thPercentile
400
Figure 48. Number of initial infusion services per full-time equivalent(FTE) chemotherapy administration staff (n � 37 practices).
No.
of I
nitia
l Inf
usio
ns
Per C
hem
othe
rapy
Cha
ir
0
300
25thPercentile
50thPercentile
Average 75thPercentile
350
250
200
150
100
50
Figure 49. Number of initial infusions per chemotherapy chair (n � 38practices).
No.
of F
TE B
illin
gSt
aff P
er F
TE P
hysi
cian
0
0.4
0.8
1.0
1.2
1.4
25thPercentile
50thPercentile
Average 75thPercentile
0.2
0.6
Figure 50. Number of full-time equivalent (FTE) billing staff per FTEphysician (n � 40 practices).
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Annu
al C
ompe
nsat
ion
($)
32,000
40,000
42,000
25thPercentile
50thPercentile
Average 75thPercentile
36,000
38,000
34,000
Figure 51. Annual compensation per full-time equivalent billing staff(n � 39 practices).
Colle
cted
Rev
enue
($) 5,000,000
4,000,0004,500,000
3,000,0003,500,000
2,500,0002,000,000
1,000,0001,500,000
500,0000
Average25thPercentile
50thPercentile
75thPercentile
Figure 52. Collected revenue per full-time equivalent billing staff (n � 40practices).
No.
of P
atie
nt F
inan
cial
Advo
cate
s Per
FTE
Phys
icia
n
0
0.15
0.300.350.400.45
25thPercentile
50thPercentile
Average 75thPercentile
0.05
0.20
0.10
0.25
Figure 53. Number of full-time equivalent (FTE) patient financial advo-cate staff per FTE physician (n � 40 practices).
Annu
al C
ompe
nsat
ion
($)
0
40,000
50,000
25thPercentile
50thPercentile
Average 75thPercentile
20,000
30,000
10,000
35,000
45,000
15,000
25,000
5,000
Figure 54. Annual compensation per full-time equivalent patient finan-cial advocate (n � 36 practices).
No.
of F
TE R
esea
rch
Staf
f Per
FTE
Phy
sici
an
0
0.1
0.3
0.4
0.5
0.7
25thPercentile
50thPercentile
Average 75thPercentile
0.6
0.2
Figure 55. Number of full-time equivalent (FTE) research staff per FTEphysician (n � 23 practices).
Annu
al C
ompe
nsat
ion
($)
0
70,000
25thPercentile
50thPercentile
Average 75thPercentile
40,000
60,000
20,000
10,000
50,000
30,000
Figure 56. Annual compensation per full-time equivalent research staff(n � 22 practices).
No.
of F
TE L
abor
ator
ySt
aff P
er F
TE P
hysi
cian
0
0.2
0.6
0.8
1.0
25thPercentile
50thPercentile
Average 75thPercentile
0.4
Figure 57. Number of full-time equivalent (FTE) laboratory staff per FTEphysician (n � 32 practices).
Annu
al C
ompe
nsat
ion
($)
0
40,000
60,000
25thPercentile
50thPercentile
Average 75thPercentile
50,000
20,000
30,000
10,000
Figure 58. Annual compensation per full-time equivalent laboratorystaff (n � 30 practices).
78s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
Labo
rato
ry R
even
uePe
r FTE
Phy
sici
an ($
) 90,000
70,00080,000
50,00060,000
40,00030,000
10,00020,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 59. Laboratory revenue per full-time equivalent (FTE) physician(n � 36 practices).
Labo
rato
ry S
taff
Expe
nse
Per F
TE P
hysi
cian
($) 40,000
30,00035,000
20,00025,000
15,00010,0005,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 60. Laboratory staff cost per full-time equivalent (FTE) physician(n � 29 practices).
Labo
rato
ry G
ross
Mar
gin
Per F
TE P
hysi
cian
($) 60,000
40,000
50,000
20,000
30,000
10,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 61. Laboratory gross margin per full-time equivalent (FTE) phy-sician (n � 31 practices).
No.
of F
TE Im
agin
g St
aff
Per F
TE P
hysi
cian
0
0.15
0.30
0.35
0.40
25thPercentile
50thPercentile
Average 75thPercentile
0.05
0.20
0.10
0.25
Figure 62. Number of full-time equivalent (FTE) imaging staff per FTEphysician (n � 16 practices).
Annu
al C
ompe
nsat
ion
($)
0
70,000
25thPercentile
50thPercentile
Average 75thPercentile
40,000
60,000
20,000
10,000
50,000
30,000
Figure 63. Annual compensation per full-time equivalent imaging staff(n � 15 practices).
Imag
ing
Reve
nue
Per
FTE
Phys
icia
n ($
)
350,000
250,000
300,000
150,000
200,000
100,000
50,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 64. Imaging revenue per full-time equivalent (FTE) physician (n �16 practices).
Imag
ing
Staf
f Exp
ense
Per F
TE P
hysi
cian
($) 25,000
15,000
20,000
5,000
10,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 65. Imaging staff cost per full-time equivalent (FTE) physician(n � 15 practices).
Imag
ing
Gros
s M
argi
nPe
r FTE
Phy
sici
an ($
) 300,000
250,000
150,000
200,000
100,000
50,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 66. Imaging gross margin per full-time equivalent (FTE) physi-cian (n � 15 practices).
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Other staff categories, such as chemo admin staff, are reportedper FTE HemOnc physician. Figure 39 presents FTE staffcounts per FTE physician and FTE HemOnc physician. Figure40 presents total staff salary expense per FTE physician andtotal HemOnc staff salary expense per FTE HemOnc physi-cian. Staff salary information is also reported for specific staffingcategories (Figs 41 through 56).
Productivity measures are reported for two staffing catego-ries: chemotherapy administration staff and billing staff. Thenumber of initial infusions per FTE chemo admin staff is aproductivity measure for the chemotherapy suite. The numberof initial infusions is a count of the initial drug administrationcodes (as defined in the coding manual) billed by the practice
Clos
ed-D
oor P
harm
acy
Reve
nue
Per F
TE P
hysic
ian
($)
350,000
250,000
300,000
150,000
200,000
100,000
50,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 67. Closed-door pharmacy revenue per full-time equivalent(FTE) physician (n � 12 practices).
Clos
ed-D
oor P
harm
acy
COGP
F (%
of r
even
ue)
0
0.4
0.8
1.0
25thPercentile
50thPercentile
Average 75thPercentile
0.2
0.6
Figure 68. Closed-door pharmacy cost of goods paid for (COGPF) asa percentage of closed-door pharmacy revenue (n � 12 practices).
Clos
ed-D
oor P
harm
acy G
ross
Mar
gin
Per F
TE P
hysic
ian
($)
50,000
30,000
40,000
10,000
20,000
0Average25th
Percentile50th
Percentile75th
Percentile
Figure 69. Closed-door pharmacy gross margin per full-time equiva-lent (FTE) physician (n � 12 practices).
No.
of D
ays
0
4
89
25thPercentile
50thPercentile
Average 75thPercentile
21
65
3
7
Figure 70. Days a supply of drugs is on hand (n � 30 practices).
-0.10
-0.05
0
0.05
0.10
0.15
0.20
Chan
ge in
Dru
g In
vent
ory
(% o
f beg
inni
ng in
vent
ory)
25thPercentile
50thPercentile
Average 75thPercentile
Figure 71. Change in drug inventory as a percentage of beginninginventory (n � 31 practices).
No.
of D
ays
0
15
35
40
25thPercentile
50thPercentile
Average 75thPercentile
5
25
20
10
30
Figure 72. Days sales are outstanding (n � 30 practices).
47%
33%
20%
Standardradiation
IMRT
IGRT
Figure 73. Radiation oncology treatment mix (n � 13 practices). IMRT,intensity-modulated radiation therapy; IGRT, image-guided radiationtherapy.
80s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology
during the period and includes initial infusions, initial hydra-tion, and initial intravenous push services. Each patient re-ceiving infusion services is billed for only one initial drugadministration code; therefore, these codes become a surrogatefor the number of patients receiving infusion services. It is in-teresting to note that the average number of initial infusions perFTE chemotherapy administration staff has been 800 for thelast two years; this year, we see a sharp increase to an average of1,000 (Fig 48). This year for the first time, we also report thenumber of initial infusion services per chemotherapy chair as anadditional productivity measure (Fig 49); our data show anaverage of just more than 300 initial infusions per chair. In thebilling department, we report collected revenue per FTE billingstaff (Fig 52) as a productivity measure.
LaboratoryIn addition to the number of laboratory staff per FTE physician(Fig 57) and annual compensation per FTE laboratory staff (Fig58), we also report laboratory revenue per FTE physician (Fig59), laboratory staff cost per FTE physician (Fig 60), and lab-oratory gross margin (laboratory revenue less laboratory staffcost) per FTE physician (Fig 61).
ImagingWe report the number of imaging staff per FTE physician (Fig62) and annual compensation per FTE imaging staff (Fig 63),imaging revenue per FTE physician (Fig 64), imaging staff costper FTE physician (Fig 65), and imaging gross margin (imagingrevenue less imaging staff cost) per FTE physician (Fig 66).
Closed-Door PharmacyA closed-door pharmacy provides services to patients and em-ployees of the practice but is not available to the public at large.This year, 18 practices report that they operate closed-doorpharmacies and 12 practices provided financial data. Figure 67presents total revenue for the closed-door pharmacy per FTEphysician. Figure 68 shows the COGPF for the closed-doorpharmacy as a percentage of closed-door pharmacy revenue and
Figure 69 reports closed-door pharmacy gross margin (totalrevenue less COGPF) per FTE physician.
InventoryIn the last several years, most oncology practices have made aconcerted effort to decrease the inventory of drugs on hand.Figure 70 shows that the average days a supply of drugs is onhand for reporting practices in 2010 was just over 7 days. Figure71 presents the change in drug inventory as a percentage ofbeginning inventory with an average of 7% increase during theyear. Given that most chemotherapy drugs can be ordered,shipped, and received in 24 to 48 hours, there may be room todecrease the inventory on hand in many practices.
Accounts ReceivableDays sales outstanding is the time that it takes to collect frompayers (and patients) for services that have already been pro-vided. This is calculated by dividing net accounts receivable byaverage collections per business day. Figure 72 shows that theaverage days sales outstanding for 2010 is 32, which is un-changed from 2009.
Radiation OncologyThe NPB has collected data on radiation oncology services forseveral years, but reporting on meaningful benchmarks hasbeen difficult because of the variety of radiation practice modelsin the marketplace and inconsistency in the data reported. Thisyear, we collected data from 13 practices representing 40 radi-ation oncology physicians. Practices reported the number ofservices rendered and revenue collected in three categories:radiation treatment delivery (codes 77401 through 77416); in-tensity-modulated radiation therapy (77418); and image-guided radiation therapy (77421). Figure 73 presents thetreatment mix on the basis of codes reported for these services;Figure 74 presents the revenue mix.
Thomas R. Barr, MBA, is general manager of the Oncology Metricsdivision of Altos Solutions. He is a past president of the Administratorsin Hematology Oncology Assembly of the Medical Group ManagementAssociation (MGMA) and was an advisor to the MGMA 2000, 2001, and2003 Cost Survey for Hematology/Oncology Practices and the authorof the summary of key observations published by MGMA in the 2003report. Before founding Oncology Metrics, Barr was CEO and executivedirector of The Center for Cancer and Blood Disorders in Fort Worth,Texas. He is a past member of the Clinical Practice Committee ofASCO, serves on the Strategic Planning Committee of the Florida So-ciety of Clinical Oncology, and is widely published in the area of oncol-ogy measurement and management.
Elaine L. Towle, CMPE, is director of consulting services for the Oncol-ogy Metrics division of Altos Solutions. She has more than 25 years ofexperience in oncology practice management, and before she joinedOncology Metrics, she was practice administrator for a 15-providermedical oncology group practice. Towle is on the board of the NorthernNew England Clinical Oncology Society and is a member of the MedicalGroup Management Association (MGMA), ASCO and the Associationof Community Cancer Centers. She is a past president of the Adminis-trators in Oncology Hematology Assembly (AOHA) of MGMA andserved as a founding member of the ASCO/AOHA liaison committee.She currently serves as a consulting editor for Journal of OncologyPractice.
30%
61%
9%
Standardradiation
IMRT
IGRT
Figure 74. Radiation oncology revenue mix (n � 13 practices). IMRT,intensity-modulated radiation therapy; IGRT, image-guided radiationtherapy.
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Oncology Metrics, a division of Altos Solutions, develops informationproducts and services for the oncology community to help acceler-ate advancements in the treatment of cancer. Oncology Metrics hasbuilt networks of community-based oncology practices from which itgathers financial, operational, and clinical information and aggre-gates the information to provide a platform of knowledge-basedproducts and services. The cornerstone of Oncology Metrics’ ap-proach is to promote the discovery and adoption of best practices.Oncology Metrics’ customers include oncology care providers andall organizations involved in the quest to improve cancer diagnosisand treatment.
Accepted for publication on July 11, 2011.
AcknowledgmentWe thank those who committed the time and energy to participate in the2011 survey, contributed to this body of knowledge and enabled us toproduce this work.
Authors’ Disclosures of Potential Conflicts of InterestAlthough all authors completed the disclosure declaration, the followingauthor(s) indicated a financial or other interest that is relevant to thesubject matter under consideration in this article. Certain relationshipsmarked with a “U” are those for which no compensation was received;those relationships marked with a “C” were compensated. For a de-
tailed description of the disclosure categories, or for more informationabout ASCO’s conflict of interest policy, please refer to the AuthorDisclosure Declaration and the Disclosures of Potential Conflicts ofInterest section in Information for Contributors.
Employment or Leadership Position: Thomas R. Barr, OncologyMetrics, a division of Altos Solutions (C); Elaine L. Towle, OncologyMetrics, a division of Altos Solutions (C) Consultant or Advisory Role:None Stock Ownership: None Honoraria: None Research Funding:None Expert Testimony: None Other Remuneration: None
Author ContributionsConception and design: Thomas R. Barr, Elaine L. TowleAdministrative support: Thomas R. Barr, Elaine L. TowleCollection and assembly of data: Thomas R. Barr, Elaine L. TowleData analysis and interpretation: Thomas R. Barr, Elaine L. TowleManuscript writing: Thomas R. Barr, Elaine L. TowleFinal approval of manuscript: Thomas R. Barr, Elaine L. Towle
Corresponding author: Thomas R. Barr, MBA, 809 First St, NeptuneBeach, FL 32266; [email protected].
DOI: 10.1200/JOP.2011.000402
References1. Barr TR, Towle EL: Oncology practice trends from the national practice bench-mark, 2005 through 2010. J Oncol Pract 7:286-290, 2011
2. Barr TR, Towle EL: National oncology practice benchmark: An annual assess-
ment of financial and operational parameters—2010 report on 2009 data. J OncolPract 7:2s-15s, 2011
3. Towle EL, Barr TR: National practice benchmark: 2010 report on 2009 data.J Oncol Pract 6:228-231, 2009.
Commentary: Hard Times for Oncologists?
By J. Russell Hoverman, MD, PhD
In the face of a worldwide shortage at the end of World War I,the government increased the payment for wheat to an unprec-edented $2 per bushel. Ranchers and homesteaders, aided bynewly mechanized farm equipment, began turning over theprairie sod of the high plains of Texas, Oklahoma, Colorado,Kansas, and Nebraska to plant winter wheat. By 1919, 70 mil-lion acres were planted. By 1926, the market price for wheathad dropped, but with 2,000 acres planted, a farmer could stillmake more than the president. At the end of the decade, theprice for wheat plummeted. To pay notes and maintain income,more and more acres of marginal grassland were turned over.Even so, a dry land wheat farmer could still make a decent livingin the first years of the depression. Then, after 11 years of aboveaverage rainfall, the weather changed.1
The weather changed for community oncologists in 2007.As Barr and Towle2 note in the September issue of this Journal,the Medicare Prescription Drug, Improvement, and Modern-ization Act was signed in late 2003 to become effective in 2004.The critical component for oncologists was a change in thereimbursement methodology for chemotherapy drugs from us-ing average wholesale price to a newly defined average sales price(ASP), which would be effective in 2005. This represented a 1/4
to 1/3 or more decrease in net income on drugs. In 2004, therewas a one-time, one-year increase in reimbursement for infu-sion codes. The effects of ASP were somewhat mitigated in2005, and less so in 2006, by the Medicare DemonstrationProject. For 2005 to 2007, drug revenues were enhanced byvolume on erythroid stimulation agents (ESAs; epoetin alphaand darbepoetin). A progressive linking of commercial payerdrug fee schedules to the Medicare ASP schedule continuedthrough this period. Since 2007, when the US Food and DrugAdministration issued the black box warning, revenue from ESAsdropped steadily and may only now be bottoming out. Thesqueeze noted by the authors began in 2007 when all of thesealternative revenue sources went away (Fig 1 of that article).
The 2011 National Practice Benchmark3 documents theprofound effect these changes have had on community oncol-ogy. This is a report of primarily physician-owned oncologypractices (86%). In 2005, drug revenue accounted for 85% oftotal revenue. In 2010, this was 65% (Fig 37 of that article).Drug margin had fallen from 22% to 9% (Fig 38 of that article).The authors note that the surveyed practices are not necessarilythe same year over year; in fact, the number of respondingpractices has dropped from 208 in 2009 to 117 in the current
82s JOURNAL OF ONCOLOGY PRACTICE • VOL. 7, ISSUE 6S Copyright © 2011 by American Society of Clinical Oncology