AON Goes Public, Aims to Leverage Increased Resources Into Improved Patient Care

Stephen Divers, MD

On September 20, 2023, with the goal of improving care, the American Oncology Network (AON) announced the completion of its business combination with Digital Transformation Opportunities Corp (DTOC) to become a publicly traded entity. The combined company was dubbed “American Oncology Network, Inc,” and its common stock began trading on the Nasdaq Stock Market under the ticker symbol AONC. Representatives from the new company rang the closing bell at the Nasdaq to commemorate the first day of trading on September 21, 2023.¹

“The platform [of] AON provides physicians and nurse practitioners the ability to escalate their level of care and function at a level that would be on par with any academic center from the standpoint of services provided, but [it] keeps that care closer to home for patients,” Stephen “Fred” Divers, MD, chief medical officer at AON and a medical oncologist at the Genesis Cancer and Blood Institute in Hot Springs, Arkansas, said in an interview with OncologyLive^®. “We had a desire to create this network and expand it nationally so that oncologists in the community would have access to a more sophisticated level of practicing medicine. We [experienced] rapid growth over the subsequent 5 years, and an opportunity came forward where we would be able to bring the company public. [We feel] that it afforded the capital and the opportunity to grow our footprint nationally; we expect significant growth going forward.”

The definitive business combination between AON and DTOC was first announced in October 2022.² AON also received a strategic investment from AEA Growth of $65 million in April 2023 with the goal of further supporting community oncology practices.³

The final approval for the business combination was given by the stockholders of DTOC at a special meeting on September 19, 2023. The network noted that the partnership and strategic investment would be utilized to help further AON’s goals by adding new providers to the network, scaling ancillary services, introducing new service offerings, and expanding existing services.¹

Founded in 2018, AON is a network of community oncology practices headquartered in Fort Myers, Florida. To date, the network is comprised of more than 200 providers from more than 75 clinics in 19 states. The organization is led by a team of physicians and other health care leaders, leveraging their expertise to aid in the longterm success of community oncology practices. The network provides member institutions with access to fully integrated, centralized services in areas including specialty pharmacy, laboratory and pathology, radiation therapy, and imaging. AON also offers electronic medical records services, a care management team, and several financial assistance programs to its members.⁴

Expanded Reach Ultimately Improves Care

Divers explained that the business combination and the decision to bring AON public will lead to enhanced care for patients being treated in the community setting. “Being part of Nasdaq should resonate with all of our customers and patients throughout the country as we expand this network to improve access, quality, and cost efficiency [of care]; care delivered in the community is typically more cost-effective and associated with higher patient satisfaction scores,” he said.

Prior data have demonstrated that community oncology care has typically been less cost prohibitive for patients compared with care administered at larger institutions. In a 2018 matched-claims analysis of patients with breast, colorectal, and lung cancers published in the Journal of Oncology Practice, findings presented by Gordan et al showed that patients treated at hospital-based clinics experienced significantly increased costs of care compared with those treated at community-based clinics.⁵

To conduct their analysis, investigators obtained cost data for 6675 patients identified from the IMS LifeLink database who had at least 1 medical chemotherapy claim between July 1, 2010, and June 30, 2015. In terms of cost per patient per month, patients treated at a community practice (n = 4450) experienced a mean cost of $12,548 (standard deviation [SD], $10,507) vs $20,060 (SD, $16,555) for those treated at a hospital-based practice (n = 2225; P < .001). The mean monthly chemotherapy cost was $4933 (SD, $4983) for patients treated at a community-based practice vs $8443 (SD, $10,391) for those treated at a hospital-based practice (P < .001).

In addition to potentially lessening the cost of care, joining a larger network such as AON could afford community oncology practices the ability to offer better quality care for patients in historically hard-to-reach demographics, such as patients in rural areas, according to Divers. As much as 19% of the US population lives in what could be defined as a rural area. Although the combined incidence rates for cancer are higher in urban areas, the death rates from the disease have been found to be higher in rural areas.⁶

This gap in cancer-related outcomes between rural and urban patients has been attributed to several factors, including older age, higher rates of obesity, disability, lower quality of health education, lack of trust in the health care system, and, particularly, difficulty in accessing high-quality cancer care due to geographic barriers. Only 15% of US oncologists work in rural settings, and US counties without an oncologist represent approximately 60% of the total land area. Metropolitan counties are also much more likely to have an oncologist compared with nonmetropolitan counties (66.5% vs 33.9%, respectively) and have far more oncologists by land area (11.5 oncologists vs 0.5 oncologists per 1000 square miles).

Divers hopes the expansion of AON will better equip these smaller community practices located in rural areas with the necessary resources to treat patients more effectively. “[My institution] joined AON in 2018 because of a desire to be part of something bigger and to make sure that we were providing the highest level of care possible for our patients,” he explained. “[We are located] in a relatively rural area in Arkansas, and there were not always opportunities to have access to elite-level care, so being part of a larger organization provided us with the ability to escalate the level of care through the AON platform.”

Studies performed on a smaller scale have shown the benefit in terms of quality of care of community oncology practices joining a larger network. In a 2021 retrospective study published in Annals of Surgical Oncology, Tucker et al examined the impact of community practices in largely rural areas of Kentucky joining the Markey Cancer Center Affiliate Network (MCCAN). The MCCAN is a statewide network developed by the National Cancer Institute–designated University of Kentucky Markey Cancer Center with the stated purpose of enhancing access to high-quality cancer services and programs for patients with cancer treated in community hospitals.⁷

The study included 13 MCCAN hospitals who were members of the network for a minimum of 3 years prior to 2018. Each MCCAN hospital was matched a control hospital for comparison purposes; MCCAN hospitals were also divided into 2 groups: those from the primarily rural Appalachian area of Kentucky (n = 7) and those located in the non-Appalachian portions of the state (n = 6).

Compliance with care quality measures for MCCAN institutions was assessed vs control hospitals for the 3 years prior to joining the network (T1) and the 3 years after joining (T2). Investigators selected 4 evidence-based cancer care quality measures for MCCAN hospitals and a matched set of control hospitals that were established at least 3 years prior to first hospital joining MCCAN and stayed in place through 2017. They included the administration of radiation therapy within 1 year of diagnosis for women under age 70 receiving breast-conserving surgery for breast cancer (BCSRT); radiation therapy being recommended or administered following any mastectomy within 1 year of diagnosis of breast cancer for women with at least 4 positive regional lymph nodes (MASTRT); the recommendation or administration of adjuvant chemotherapy within 4 months for patients aged less than 80 years with stage III colon cancer (ACT); and the removal and pathological examination of at least 12 regional lymph nodes for patients with resected colon cancer (12RLN).

Findings from the study demonstrated that MCCAN member hospitals achieved a significant increase in compliance in terms of BCSRT (P < .0001), MASTRT (P = .003), and 12RLN (P < .0001) from T1 to T2. Additionally, during T2, MCAAN members had significantly higher compliance rates regarding BRSRT (P = .009), MASTRT (P = .03), and ACT (P = .03) compared with the nonmember controls.

AON Poised for Continued Growth

According to the 2023 edition of the Community Oncology Services Global Market Report, the global community oncology market size is projected to grow from $47.95 billion in 2022 to $53.79 billion in 2023 at a compound annual growth rate of 12.2%. Additionally, the market is expected to grow at a compound annual growth rate of 10.9%.⁸ AON is also heavily involved in oncology pharmaceuticals, a market that is expected to grow from a $177 billion industry in 2021 to approximately $313.7 billion by 2026, at a compound annual growth rate of 12.1%.⁹

From 2019 through June 2022, AON produced compounded annual revenue growth exceeding 60% and continues to operate at a profit.² Moreover, the network generated more than $1.1 billion in revenue in 2022, demonstrating year-over-year growth of approximately 20%.³

The network is expected to leverage its newfound publicly traded status to further capitalize on the growing community oncology market, Divers said. “Since we joined AON, it’s also been a huge success from the standpoint of our business—our volumes have increased significantly, both on the patient side and [in terms of] provider volume,” he noted. “Recruitment has increased, our footprint coverage has increased, and patient satisfaction has increased.”

“There’s an addressable market that’s out there. The oncology community is somewhat large and fragmented between academic institutions and community settings. Our vision and mission are to be patient-centric and to provide the necessary tools and resources for our providers to deliver the highest quality of care possible for our patients regardless of their location, whether that be rural or in the larger metropolitan areas.”

References

1. American Oncology Network and Digital Transformation Opportunities Corp. announce completion of business combination. News release. American Oncology Network. September 20, 2023. Accessed September 25, 2023. https://www.aoncology.com/2023/09/20/american-oncology-network-digital-transformation-opportunities-announce-completion-business-combination/
2. American Oncology Network, a rapidly growing network of community-based oncology practices, to go public through business combination with Digital Transformation Opportunities Corp. News release. American Oncology Network. October 6, 2022. Accessed September 25, 2023. https://www.aoncology.com/2022/10/06/american-oncology-network-to-go-public-through-business-combination-with-digital-transformation-opportunities-corp/
3. American Oncology Network, a rapidly growing network of community-based oncology practices, receives strategic investment from AEA Growth. News release. American Oncology Network. April 28, 2023. Accessed September 25, 2023. https://www.aoncology.com/2023/04/28/american-oncology-network-receives-strategic-investment-from-aea-growth/
4. Who we are. American Oncology Network. Accessed September 25, 2023. https://www.aoncology.com/who-we-are/
5. Gordon L, Blazer M, Saundankar V, Kazzaz D, Weidner S, Eaddy M. Cost differences associated with oncology care delivered in a community setting versus a hospital setting: a matched-claims analysis of patients with breast, colorectal, and lung cancers. J Onc Pract. 2018;14(12):e729-e738. doi:10.1200/JOP.17.00040
6. Levit LA, Byatt L, Lyss AP, et al. Closing the rural cancer care gap: three institutional approaches. JCO Oncol Pract. 2020;16(7):422- 430. doi:10.1200/OP.20.00174
7. Tucker TC, Charlton ME, Schroeder MC, et al. Improving the quality of cancer care in community hospitals. Ann Surg Oncol. 2021;28(2):632-638. doi:10.1245/s10434-020-08867-y
8. The Business Research Company. Community oncology services global market report. Accessed September 25, 2023. https://www.thebusinessresearchcompany.com/report/community-oncology-services-global-market-report
9. Insights on the $177.4 billion oncology pharmaceuticals global market to 2026 - ResearchAndMarkets.com. News release. Business-Wire. October 6, 2021. Accessed September 26, 2023.