Cancer Treatment Centers of America (A)

By: Regina E. Herzlinger and Natalie Kindred

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Synopsis: Cancer Treatment Centers of America (CTCA), a U.S. network of four privately owned oncology focused factory hospitals, was weighing options for growth. CTCA was entirely cancer focused and specialized in treating patients with complex and advanced-stage cancers, who were reached through advertising its integrative, team-based approach to care. CEO Stephen Bonner needed to decide whether to focus future expansion on building additional full-scale hospitals or pursuing a hub-and-spoke model, in which numerous oncology outpatient centers would be built in the region of each CTCA hospital. His decision would be made in the context of CTCA's unique business model and treatment philosophy and the public policy landscape, including certificate-of-need laws and the advent of Accountable Care Organizations (ACOs) and bundled payments. CTCA's for-profit status and direct-to-consumer advertising made it a target, he knew.