Cancer programs report that their financial health is good or very good. Most are targeting staffing, purchasing, and patient throughput to reduce costs.

Respondents emphasized that they seek the "right" staffing or "flexible" staffing, and not necessarily a reduction in FTEs. Staffing is evaluated with regard to overtime, benefits, retirement program, and call pay.

Less than one-quarter (24 percent) of respondents indicated that their strategies to reduce costs include delaying IT improvements. This is down significantly from 42 percent in last year's survey.

Purchasing is managed aggressively, especially for chemotherapy drugs. Programs reviewed purchasing contracts, utilized just-in-time inventory, and considered using cheaper drugs.

Several respondents mentioned that financial strategy for their cancer program is skewed more toward increasing capacity and revenue than reducing costs. Cancer programs boost revenue through a wide range of strategies, with an emphasis on those that increase volume. Fifty-six percent of responding cancer programs have increased coding reviews to improve the percentage of claims that are submitted correctly, ensure that all services are billed, and increase revenue.

Revenue-Enhancement: In Their Own Words

"We did Six Sigma about 18 months ago. This program helped us increase value added and remove waste. Specifically, we improved the way patients flow through the system and reduced drug inventory."

"Oncology is a revenue-driven business, not a cost-driven business. It's all about increasing capacity."

"We are actually increasing costs because we are understaffed due to growth – but scrutinize that we have the RIGHT staffing."

"We are making sure that we are coding charts properly, that any service we provide is fully reimbursed, and we research denials."

Forty-six percent of respondents plan to expand their infusion center, including 20 percent that plan to expand to a satellite facility.

"Demand is driving our plans for expansion."

"We would like to catch folks on both sides of town so we don't lose them to another program."

Still, expansion and replacement plans for clinical technology appear to be limited--continuing the trend from last year. Across the line, the numbers of linear accelerators, ultrasound imaging machines, computed tomography scanners, magnetic resonance machines, and PET or PET/CT machines budgeted for purchase in the next fiscal year are down, both in the cancer center and on the hospital campus. Despite the fact that 51 percent of respondents cited new technologies and services as a way to increase revenues, IGRT and CyberKnife are the only areas of significant growth over the three years of this study.

Sixty-two percent of responding programs are increasing physician-to-physician liaisons. Expanding the number of employed or affiliated physicians can increase physician referrals to support the oncology service line.

Professional services agreements (PSAs) are increasing for medical and hematological oncologists. Advantages of PSAs for the hospital include 1) presence of dedicated oncologists on site, which facilitates development of the oncology service line without the constraints of insufficient supervision, and 2) control over oncologist services that is almost similar to control over employees. Moreover, PSAs offer the ability to offer a broad range of oncology services and depth of expertise.

"A lot of oncologists are trying to join the hospital because of economic pressures from Medicare. If they will be located here, we would have to make more infusion space."

"We are adding three hem oncs for the first time to compete with other oncology groups in town."

"PSAs have tied inpatient and outpatient services together better. We also have more control over nursing policies and procedures."

Cancer programs are seeing more patients who are referred for expensive drugs and need help affording their medication. Programs reported an increase in the percentage of their charges that are charity care.

Cancer programs continue to see an increase in the number of uninsured or underinsured chemotherapy patients.

The new standards include the provision of treatment and survivorship plans, palliative care services, genetics services, navigation programs and psychosocial distress screenings. Some programs are more prepared than others, but most anticipate that they will be challenged to maintain accreditation. Even the programs that feel prepared to meet the new accreditation standards expect that one or more of the criteria will require a substantial increase in resources – primarily nursing time. Members were mixed with regard to which services present the biggest challenge.

"Evaluating patients for psychosocial distress is one thing, but we need to have the resources to help these patients when we find them."

"Our biggest challenge will be to justify the cost of additional nursing. Genetics is reimbursed but survivorship and psychosocial distress screening – we can't bill for these in a way that will cover the cost of staff. As reimbursement dwindles, in reality we may have to choose between accreditation and being profitable."

"Most difficult is the treatment summaries and care plans. These are not in EMR and need to be done by hand—very time consuming."

Cancer programs reported serious concerns about accepting injectables from specialty pharmacies. The cancer program is expected to assume the costs of storing and handling, but is not able to bill for these costs. The cancer program faces greater challenges with regard to operations, reimbursement, patient safety and institutional liability.

Participation in the 340B drug discount program is on the rise, spurred by loosened eligibility criteria and increased discounts included in the Affordable Care Act. ACCC members who participated in follow-up interviews reported that the 340B program is a major contributor to profitability. Moreover, most respondents have seen an increase of local oncology practices seeking affiliation in order to access the economic benefits of the 340B program. The 340B program may contribute to the shift of more oncology therapy to the outpatient setting; however, members emphasized that this trend is occurring regardless of 340B participation.