Insight into Health Care Consolidation and Industry Players

Michael Kolodziej, MD, from the Clinical Trials Transformation Initiative, discusses his thoughts before moderating a panel on health care industry consolidation at the 2023 CPC+CBEx annual conference.

Transcript:

Michael Kolodziej: My name is Michael Kolodziej. I’m a physician medical oncologist, I currently work as an advisor to ADVI Health, which is a DC-based policy and strategy consulting firm, and I’ve been there almost five years now, but as many viewers know, I worked for many years for US oncology as a practicing oncologist as well as a member of the leadership team, I ran oncology programs at Aetna for 4 years, and I was at Flatiron Health for a couple years, so I have done a little bit of everything.

What were you most excited for to share with attendees from your panel?

Michael Kolodziej: So first let me take a step back and commend the Journal of Clinical Pathways and Clinical Pathways Congress for inviting the Cancer Business Exchange to merge with them this year. I think that this is a great idea, and excellent marriage and I think that there are a lot of mutually interesting topics. So last year I spoke at the pathways congress, this year I am going to be on the other side of the aisle, on the business exchange side, and as we put together the panel I am moderating, we thought we would talk a little bit about how the landscape in oncology practices is changing and specifically about how we really don’t at all live in the era of mom and pop cancer shop anymore, we’re way past that I think, it’s a scary time and I think we’re going to talk about many different flavors of relationships that oncologists have an opportunity to take advantage of, why there’s fear, what the reality is, and ultimately how I think this can help practices to succeed, even thrive, and ultimately deliver better care to their patients.

How do you think leading health care providers will respond to health care consolidation?

Michael Kolodziej: Oh they hate hospital consolidation, are you kidding me? You know I think, we in this cancer business space, have been conditioned to think of hospitals as the big bad wolf. In fact, I was recently quoted as saying that “Hospitals are the most carnivorous animals on planet earth.” They have earned some of that reputation, but I think what’s interesting is that a lot of things have changed in the health care ecosystem that have forced hospitals to reconsider how they will partner with oncology practices and I hope we can get to that during the panel, but there is no doubt they hate hospitals, in every possible permutation they hate them.

What are some of the differences between nontraditional players and health systems?

Michael Kolodziej: So, a couple years ago, I shared a panel that was titled, tongue in cheek, “Who’s the Boss?”, a little TV show, you know, some of you guys are too young to remember that but, at any rate, so we talked about the fact that, you know, we sort of traditionally have had, the independent community oncology practice, then we had the big networks, like US oncology, and then we had hospital-based practices, those are sort of traditional, but now we have a whole bunch of other ones come into the playing field. So we’ve got Optum, big health plan, Optum is the single largest employer of physicians in America, not oncologists, but they do employ oncologists, but they’re the same single biggest employer of physicians, I read 70,000, 70,000 physicians, then we’ve got things like Kaiser Permanente, which ain’t that different, we will talk about that in the panel, ain’t that different from Optum if you really think about it. Then we’ve got these interesting third parties, venture capital, private equity, we’ve got, networks, I hesitate to call them startups, they are way more mature than startups, that are actually starting to employ physicians like Oakstreet Health, Village MD, to this point they don’t employ oncologists but they’re thinking about how to work with oncologists. So, those are the nontraditional guys, and I would say that all of them, all of them are very interested in oncology, it’s very interesting because it’s high profile, it’s high cost, and has the potential to be high margin, and that last one, that’s what makes them attractive to the nontraditional entrance into the space.

Who are the major players and disruptors in health care industry consolidation?

Michael Kolodziej: Well, I think we would be fools not to acknowledge that hospitals remain the primary driver of this. Something like 50%, plus or minus, of all oncologists in America currently are employed by hospital systems. Interestingly, if the Affordable Care Act had really kind of moved forward in the fashion that the Obama administration initially foreseen, we’d have seen the rise of ACOs, most of them hospital-based, and they would have all been sucking up oncology like nobody’s business, so you have to control those jobs. So, hospitals are number one. Number two, I think, if you ask me, opinion, payers. Payers are number two.

What will future challenges look like for major players and disruptors?

Michael Kolodziej: Look, I’m a capitalist. It’s okay to make money. I think, as a physician, as a registered democrat, making sure that people get good care, get taken care of appropriately, is really really important. So we need to somehow balance the profit motive, and I am not using that as a four letter word, I’m just not, being a successful practice, with being able to make sure we give the best possible care we can bring to our patients, and that is always going to be the ultimate challenge. These traditional, nontraditional entrants are just a means to an end. The end is successful survival of your practice and continuing to deliver good care.

Was there anything else you wanted to expand on?

Michael Kolodziej: I think it’s gonna be an interesting panel, there could be fireworks, very strong opinions here, I think ultimately we need to keep an open mind. We need to make sure that we recognize that we are all, we in this room, people attending this meeting for example, are all interested in succeeding, succeeding as a practice, but also succeeding as the stewards of society’s needs for good quality cancer care. We need to keep our patients in mind.