Four key levers to enhance infusion services

In recent years, the infusion services industry has seen a steady influx of private equity investments. This surge is fueled by the sector’s promising growth potential and its crucial role in patient care. Despite the end of the initial rush for investments in this field, there is still ample opportunity for generating revenue through strategic optimization and consolidation. This marks a significant turning point for both providers and investors in the infusion services sector. The focus now is not only on cashing in on the industry’s upward trend but also on identifying sustainable strategies to increase revenue and minimize costs in the long run.

Successful organizations in the current market are those that have honed in on four key operational facets: analytics and data, vendor negotiations, specialty pharmacy insurance benefits, and revenue cycle management. These four essential value drivers work together to enhance operational efficiency, reduce costs, boost financial performance, and ultimately, ensure high-quality patient care.

Looking ahead, the infusion therapy market outlook appears promising, with various key considerations to keep in mind:

Forecasting Market Growth:
The U.S. home and alternate site infusion therapy market is characterized by significant fragmentation. Over half of the market consists of more than 800 independently owned practices. The infusion therapy market is projected to grow at a compound annual growth rate (CAGR) of 7.3% from 2024 to 2033. This growth is primarily driven by factors such as the aging population, the prevalence of chronic illnesses, and ongoing therapeutic innovations. To capitalize on these opportunities, both private equity firms and organizational leaders must shift their focus beyond traditional acquisition and consolidation strategies. Aligning the organization strategically and optimizing processes are crucial steps to fully realize the market’s potential.

Impact of Market Conditions:
Reimbursement under the 340B program is a key factor influencing the evolution of the infusion therapy market. This program fuels market growth by enhancing access and availability to IV therapy drugs, thus enabling more patients to receive treatment. However, hospitals are seeking to maximize 340B discounts by acquiring physician practices and increasing patient volume. Consequently, payors are directing patients towards alternative care sites, diverting them away from hospitals, which presently serve as the primary locations for infusion therapy, with a 54% utilization rate.

Evolving Preferences:
There is a notable shift in preferences from both providers and patients towards transitioning the site of care from traditional, high-cost settings to more comfortable, lower-cost alternatives. Ambulatory infusion centers (AICs) have gained popularity due to their numerous benefits, including reduced length of stay, higher quality, personalized care, financial advantages (almost 50% cost reduction), and decreased strain on human resources. The rise of AIC facilities presents fresh growth opportunities, attracting significant investor interest and enhancing service capacity and revenue in the infusion therapy market.

In the maturing infusion services market, success hinges on strategic optimization beyond mere expansion. Providers and investors must streamline their operations effectively to unlock sustainable growth. Four crucial levers drive this transformation:

Analytics and Data:
Leveraging advanced analytics and data insights is pivotal for optimizing operations in the infusion space. Organizations should prioritize benchmarks and key performance indicators (KPIs) related to referral receipt to scheduling time, referral receipt to care provided time, medication revenue margins, turnaround time per front-end function (e.g., documentation review, insurance verification and benefits, authorization), and initial denials and write-off adjustments. Interpreting and utilizing this information effectively is essential for maximizing revenue in today’s market, where providers face challenges in managing and analyzing data to extract actionable insights on issues affecting revenue components like referral volume, conversion, and patient satisfaction.