Happy Tuesday, Hospitalogists!

I'm on break but wanted to hit you one more time before the New Year. I hope you all are having a restful holiday season, enjoyed the Hospitalogy wrapped post on 12/26, and I'm looking forward to getting caught up to your replies in 2026. It's gonna be a doozy.

As far as doozies go, as you probably read in my newsletter (and all over the internet), two weeks ago, Cencora accelerated their acquisition of OneOncology at an eye-watering $7.4B valuation.

But BEFORE this was announced, I sat down with OneOncology's Dr. Jeff Patton to talk about their expansion strategy (specifically with the acquisition of GenesisCare and elsewhere).

So here's a quick holiday read and sneak peek behind the curtain into OneOncology's value prop for community oncologists, their multidisciplinary approach, and how they've positioned themselves as a leading specialty MSO to support physicians.

To clarify, the scope of this article will focus on OneOncology and GenesisCare prior to any knowledge of the Cencora deal. Let's dive in.

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THE DEAL BEFORE THE DEAL

OneOncology's GenesisCare Bet: Buying What Bankrupted Twice, to Do Things Differently

Dr. Jeff Patton walked into investor meetings with a pitch to buy GenesisCare's Florida assets. Small problem: GenesisCare just went bankrupt. Smaller problem: before GenesisCare, the same assets belonged to 21st Century Oncology, which also went bankrupt.

Two corporate failures, $2B incinerated, private jets crisscrossing the country while Australian executives tried to understand American healthcare reimbursement, and the same physician practices underneath just... kept working.

Investors were understandably skeptical. These are growth equity investors who don't make bad bets, and here's their portfolio company CEO asking them to write a check for assets that literally bankrupted…twice.

But here's Patton's thesis, and it reveals how OneOncology thinks differently about value: everyone else focused on the wrong asset class. The radiation machines kept failing. The real estate kept failing. The corporate structures kept collapsing under debt loads and declining reimbursement. But the physicians? They kept showing up. Active practices, busy panels, good clinical outcomes, patients who wanted to stay with them.

These docs didn't want to work for hospitals. They wanted to stay independent. And after two bankruptcies swirling around them, they were still there, still practicing, still generating revenue. That persistence told Patton something about cultural fit and long-term viability that balance sheets couldn't capture.

OneOncology's Unlock for GenesisCare

GenesisCare's acquired assets hold 100+ providers across Florida in radiation oncology and urology. From OneOncology's perspective, GenesisCare had essentially ignored medical oncology, which happens to be where OneOncology started and knows best. The deal formed some nice cross-synergy: radiation and urology well developed, medical oncology underdeveloped, and OneOncology brings exactly that missing piece plus the operational platform to integrate all three.

Here's what makes the deal interesting strategically, and where OneOncology's model diverges from typical MSO rollups. They don't buy practices outright in most cases. Physicians keep their tax IDs, maintain 100% clinical autonomy, operate almost like a JV for operational and financial decisions. Both sides have to agree.

This roll-up model doesn't work without genuine physician enthusiasm. No docs, no biz. If the docs don't believe in the platform, they'll just leave, and you own a management contract with nobody to manage.

So Patton drew a line during the GenesisCare process: no more financial diligence, no more moving forward until OneOncology could meet with every single physician. Not group leaders or practice administrators who tell you what doctors think. Every doc. Over two months, they systematically validated that these physicians actually wanted to stay independent and partner with an MSO rather than get acquired by a hospital system.

OneOncology actually walked away from GenesisCare initially. But then they acquired United Urology Group, brought in strong urology management, built out ASCs, and suddenly the GenesisCare assets looked much more appealing.

Urology is structurally interesting from a specialty economics standpoint in ways that don't exist for pure oncology. Roughly 50% of what urologists do ties to cancer (prostate, bladder, kidney), but unlike medical oncology where everything is referral based, patients self-refer for symptoms like blood in urine or kidney stones. Urologists effectively do primary care for certain conditions while functioning as specialists for others. That panel building dynamic creates different economics because you're not purely dependent on referrals from PCPs.

The platform strategy matters here because it creates multiple referral pathways and revenue streams within the same integrated practice. A urologist diagnoses prostate cancer, refers to medical oncology within the OneOncology network, coordinates with radiation oncology also within network, performs procedures in a OneOncology-affiliated ASC, and the patient gets imaging at a OneOncology-affiliated center. You're not capturing one discrete service. You're capturing the entire care continuum with ancillary margin at every step.

The ASC opportunity is particularly compelling because GenesisCare held essentially zero ASC presence despite their urologists already having scattered ownership relationships across Florida.

OneOncology sees volume-justified buildout as a major ancillary expansion lever, especially as more procedures migrate outpatient. Cancer is increasingly managed as a chronic disease, meaning longer patient relationships, more touchpoints, and more opportunities to deliver care in lower-cost settings that physicians can actually participate in economically.

The Capitalization Problem

When Patton started practicing, 85% of chemotherapy was administered in private practice offices. Today it's 30%. Where did everyone go? Hospitals.

OneOncology strongly believes independent oncologists can deliver equivalent clinical outcomes at materially lower cost through site of service differentials alone. In a functional market with transparent pricing and consumer choice, lower cost with equal quality wins immediately for those footing the bill. Of course, reality in healthcare is different, and hospitals have worked exhaustively to build out their physician bases and facility footprints to capture oncology services in their local markets.

Today, private practices were - and are - competing against well-capitalized hospital systems while lacking access to growth capital themselves. Even excellent mom and pop practices delivering great clinical quality couldn't build imaging centers, stand up ASCs, invest in IT infrastructure, or expand into adjacent service lines. The structural disadvantage wasn't clinical. It was financial. Hospitals could borrow against their balance sheets with tax advantages to build out comprehensive service lines.

MSOs (good MSOs, mind you) alleviate the independent physician capitalization problem while allowing physicians to retain independence and participate economically in ancillary expansion. OneOncology's model aligns physician economics in a compelling way: physicians make 100% of clinical decisions, they participate in the upside from ancillary services, they benefit from economies of scale across the platform, and they get access to capital for growth without giving up their tax ID or becoming employees.

Very very little physician attrition across OneOncology's affiliated practices suggests the model is working quite well.

Where OneOncology Is Headed

OneOncology is targeting critical mass and appropriate density market share in order to compete effectively in local oncology markets. That's market share within each discipline: medical oncology, radiation oncology, urology. Any serious player needs density in each specialty to achieve favorable economics at scale.

Getting there requires capital most independent practices can't access alone. OneOncology can deploy capital across 15-20 practices in a market to build collective capability and ancillaries that no single practice could achieve independently.

The land-and-expand strategy is formulaic: find an anchor practice providing cutting-edge care with good clinical reputation. Affiliate them, demonstrate income improvement through operational support, ancillary development, and favorable economics. That creates proof of concept for other groups in the market who see their peers succeeding. The model is working based on inbound interest rather than OneOncology chasing every opportunity. But most important of all of these factors is finding the groups that are the right cultural fit, and creates an atmosphere of collaboration and partnership. As they say, happy wife happy life am I right?

So GenesisCare supercharges this growth strategy. The acquisition gives OneOncology 100+ providers across radiation and urology with immediate medical oncology upside in a massive state with multiple metro markets at different stages of consolidation. Of course buying something out of bankruptcy (or buying anything, really) creates risk. The thesis is that physician quality and resilience matters more than corporate infrastructure when you're building an MSO platform.

Two bankruptcies couldn't kill these practices because the practices were never the problem. The capital structures layered on top of them were the problem. 21st Century Oncology borrowed too much against radiation machines right before reimbursement cuts made those assets less valuable. GenesisCare tried to run an American specialty care business with Australian management that never understood local market dynamics.

OneOncology is betting they can provide the capital, operational infrastructure, and scale benefits these physicians need without the private jets and $2B cash burn. If they're right, GenesisCare becomes a case study in how the same assets can generate completely different outcomes under different operational models. They're creating an incredibly compelling platform for specialist physicians around oncology, and it's no wonder why they're involved in the great drug distributor vertical integration game playing out in 2025 and beyond.

OneOncology's bet is really about whether oncology's evolution toward chronic disease management, specialty drug growth, and multispecialty integration creates durable economics for independent physicians who can access the right platform.

TOP READS & RESOURCES

My favorite reads & resources from the week

This overview from KFF on recent trends in commercial health insurance concentration is a great datapoint.
Get my take on a platform that embeds patient screening for behavioral health needs into your EHR, helping you boost timely crisis interventions, referral management, and quality program compliance.*
Company size is warping the healthcare market

*This read is brought to you by one of my brand partners who help make this newsletter possible!

MISCELLANEOUS MADDENINGS

Random personal anecdotes and musings from me

Hook 'em!

Thanks for the read! Let me know what you thought by replying back to this email.

— Blake