Oncology:- a new Cardiology? the cancer care business!

A High-Margin Specialty The appeal of oncology as a lucrative business proposition is undeniable. As the industry circles say, "Oncology is the new cardiology; investments are flowing into it." Industry estimates suggest that major healthcare players typically derive 12-14% of their annual revenue from oncology services, and the EBITDA contribution is often even higher due to the high-margin nature of this specialty. "It's a new cash cow,". This has led many healthcare groups to explore aggressive expansion plans, with some even considering hiving off oncology as a separate business vertical to drive focused growth and unlock greater valuations. These are some of the conversations I often hear in the healthcare business circles.

But is the allure of Oncology true?, unlike cardiology, Oncology is quite a complex business and challenging disease to treat. Its spectrum is wider from Prevention to Palliation with each having a separate business case and operational structure. The trauma is existential and it's financially ruinous. And you must know that a radiation machine is not a Cath-lab to churn out revenues. Radiation is just one of the parts with limited scope of revenues maxing out at Rs2cr to 3Cr with a single machine even in the best of the cancer centres. Albeit with the highest margin contribution. It’s the most capital-intensive and heavily regulated part of oncology where enormous innovation is taking place. You have #protonradiation #Flash #Cyberknife #Gamma #PETproton #Carbontherpay. All are available in the country.

With Prevention and Palliation non-existent in the country, Oncology is largely left as a combination of 3 different specialties supported by specialized diagnostic services. Medical oncology, Radiation oncology and most importantly Surgical oncology. Since 70% of cancers are solid organ cancer so all the 3 specialties are essentially needed at different stages. So, the unique combinatorial need for triumvirate specialists is just one dimension of the complexities which sets oncology apart from any other specialty. This dimension alone has wider implications on the oncology business, its operating structure, its financials, and most importantly on the clinical outcomes of the disease, survival, and survivorship. Blood malignancies (cancers) are roughly 30% that have different structural needs and hardly require Radiation or surgical specialties.

The follow-up care: - it’s the only specialty where follow-ups account for more than 15% of the revenue. This necessitates cancer hospitals to have an elaborate operational structure with Cancer teams requiring training, orientation, and familiarity in oncology lingo with Enough, Right and Just communication skills vital for cancer care (cancer communications are a complex topic that I will discuss some other day). So, Cancer hospitals need to invest a lot in post-treatment follow-up surveys, quality of life assessment, side effects management, regular updates, and screening protocols.

Technology & Treatment: - Another challenge is the continuous evolution of cancer treatments with precision, predictive and targeted therapies driving personalized treatment is altering the way treatment is delivered in oncology. Innovation in the technological landscape from medical, operation to monitoring technology is another dimension for cancer hospitals to tackle and remain viable. Technology and Treatment have now become the new forces of change impacting the way the business of oncology happens.

Medical oncology, earlier known only for dreaded chemotherapy, has undergone a transformative change with Precision, Predictive and Targeted therapies. The newer treatments with better safety profiles are taking medical oncology out of the hospitals to Day-Care oncology centres known as Precision oncology clinics. As the more technology & treatments evolve the more medical oncology will migrate out of the hospitals. Lately, the bulk of medical oncology is being practiced in oncology Daycare centres, and the trend is quite encouraging in India. More than 70 oncology Day-care centres are already successful and 100 more are being launched. All the leading Healthcare chains; Medanta, Fortis Healthcare, Max Healthcare and Apollo hospitals have already taken the lead and aggressively expanding in the metros where commute is costlier & longer. Mumbai Oncology Centre: a chain of Oncology Day Care centres has established 18 centres across Maharashtra and MP. ?Only critical care medical oncology is now part of the main hospitals. Medical Oncology is following the Dialysis business way. Hospitals will optimize their space for higher ARPOB work instead.

The days of general cancer surgery are long gone. Onco-surgeries are now very specialized with robotic technology taking over with organ-specific surgical programs with a very detailed and nuanced ecosystem that brings great clinical outcomes. This again requires a specialized focus and investment into every cancer program its anchors. We already have seen the newer concepts of DMGs/ CMTs, Breast Cancer Clinic, Rectal Cancer centers, GI cancer clinics etc. so, Organ organ-specific specialization with robotics will be the future of Onco-surgeries.

A successful surgical oncology program is quite an essential & basic requirement for a successful Radiation program as radiation is largely dependent for its patients on strong Onco-surgical referrals, less on medical oncology given that 80% of the cancers detected in India in stage 3 or 4th. And India doesn’t have the concept of a standalone Radiation oncology centre like the USA and Europe. The reasons are multiple going from regulatory architecture, and patient referral to financial viability and rentals. No healthcare player has even experimented with it hitherto. Radiation oncology with all #proton #photon #electron and #Carbontherapy #cyberknife #tomotherapy # too is organ-specific focused with entire ecosystem and specific modalities for cancer in moving and non-moving organ treatments like #SRS, #SBRT, #IMRT, #IGRT, #Flash therapy. Delivering treatment through these modalities requires a lot of clinical expertise and monitoring to bring about great clinical outcomes. Mind you! Radiation is a capital-heavy specialty, and the capacity is fungible making it a challenging business specialty.

Medical oncology coming out of hospitals will force a hybrid business model whose dynamics may potentially solve the accessibility, availability and affordability of cancer treatments mediated greatly by technology. These Oncology Day-Care centres will further serve as the information, awareness, and screening centres for oncology, currently the biggest challenge in detecting cancer early program, especially Breast, Cervical and Head & Neck cancers. The Surgical and Radiation oncology continue to remain within the walls of bigger hospitals. So, this hybridization of the oncology business will further set it apart from other specialties.

Indian healthcare is largely curative healthcare which is already grappling with the increasing burden of chronic diseases, cancer, amongst all, remains a formidable challenge and yes, its business is unlike cardiology.

?