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IU Health strikes deal with Central Indiana Cancer Centers

June 17, 2011

Indiana University Health has pulled a prominent practice of cancer physicians into its fold.

Central Indiana Cancer Centers sold its five facilities to IU Health and transferred its 150 employees to the Indianapolis-based hospital system. The 16 physicians in the practice will remain independent, but they have signed a service agreement with IU Health that pulls the two entities into a tight embrace.

Financial terms of the deal, which closed June 1, were not disclosed. But it is a big win for IU Health, as Central Indiana Cancer Centers has a well-established presence in Carmel, Fishers, Greenfield, Greenwood and the east side of Indianapolis.

Cancer services are key financially for hospitals because of the growing prevalence of the disease, and also because cancer patients often need surgery. IU Health now has more than 60 medical oncologists, not counting any of its radiation oncologists or cancer surgeons.

“They’ve been in the community for a long time, so they have developed quite a bit of those referral sources,” said Fuad Hammoudeh, administrator of cancer programs at IU Health.

Central Indiana Cancer Centers, established near Community Hospital-East in 1976, also had discussions with the three other major hospital systems in Indianapolis: Community, St. Vincent Health and Franciscan St. Francis Health.

“It was clear that IU Health provided an opportunity that was not only best for us but we hope is best for the patients of central Indiana,” said practice President Dr. Andrew Greenspan.

He said a partnership with a hospital became essential for Central Indiana Cancer Centers as hospitals have spent the past three years gobbling up physicians of all stripes—both primary care doctors and specialists. IU Health Physicians now employs more than 500 doctors and Community Health Network has more than 550.

“It begins to threaten our referral base,” said Greenspan, noting that cancer surgeons and primary care doctors tend to refer patients within the hospital system with which they are affiliated.

Central Indiana Cancer Centers now will do the same for IU Health, which makes the practice attractive. At the same time, IU Health’s ownership of the cancer facilities means they will receive higher reimbursement rates from health insurance plans for many services, such as infusion of chemotherapy drugs.

Central Indiana Cancer Centers also used to be part of U.S. Oncology, a Texas-based practice management network of cancer physicians that focuses on establishing and rigorously following guidelines for patient care.

“They’re a well-oiled, lean machine that practices very well,” said Dr. Patrick Loehrer, director of the IU Melvin and Bren Simon Cancer Center, which is filled with academic physicians, who tend to practice with less efficiency.

So Loehrer hopes the Central Indiana Cancer Center physicians can bring some of their guidelines to IU Health’s 19 hospitals around the state. Also, IU Health hopes to tap its academic expertise to inform any guidelines it develops with the latest insights from clinical research.

Such guidelines are key, Loehrer said, for trying to avoid needless costs. That will become increasingly important as health insurance plans begin basing part of hospital and physician reimbursement on how well they reduce costs.

IU Health also liked the fact that Central Indiana Cancer Centers have been active in clinical trials. IU Health is trying to make participation in clinical trials an option for patients anywhere in its sprawling system.
 

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