Disclaimer: Flare Capital Partners is an investor in Aetion, Cohere Health, HealthVerity, Inbound Health, Iora Health and VivorCare. See the broader Flare presentation here.

In part one of this article, we highlighted the various components of end-to-end cancer care delivery and management and how innovators have emerged to address today’s unmet needs. We unbundled the key challenges opposing value-based cancer care by looking at the most important aspects of the care continuum and identifying key trends that will influence innovation in the next decade. In part two, we will take a forward-looking view of the market and how innovation will evolve following the path of "disruptive innovation."

The next wave of cancer care model innovation will look much different than other specialty-specific disease management startups such as Livongo, Hinge Health and others. Founders must continue to focus on transcending episodic care delivery to drive toward value-based care.

But for cancer care, this means connecting earlier aspects of the patient journey, which include bundling screening, diagnostics, education and nurse navigation services with later-stage aspects of the care continuum such as treatment, pain management, surgical care and remote maintenance.

Improving our existing care pathways through better use of data won't be enough to shift traditional fee-for-service cancer models towards capitated or sub-capitated contracts.

"Delivering coordinated, high-value oncology care tailored to each patient’s unique clinical presentation and personal preferences is becoming increasingly complex for providers who must contend with numerous utilization-management vendors when making diagnostic and treatment decisions," said Dr. Ray Brig, vice president and medical director for oncology at Cohere Health.

Additionally, focus on the patient and developing consumer-centric platforms alone won't move the needle if the goal is to drive collaboration across multiple stakeholders. Cancer care requires robust, multidisciplinary coordination (across surgeons and providers) and remains an expensive and lifelong battle for patients that often leads to severe financial strain. In the long run, organizations that develop proper end-to-end platforms and drive payer collaboration while simultaneously improving consumer and provider experience will win.

In summary, we see three major trends that will drive cancer patient care management innovation in the coming years:

Re-bundling of point solutions and focus on a "platform"

With the advent of digital health solutions in recent years, we have seen a great unbundling of technology and services. While new and better point solutions will continue to emerge, and important companies that offer specialized technologies or tech-enabled services will be built, we believe platform players will be a key driver of innovation, due to the added complexity and associated cost related to managing and integrating several "best-in-class" point solutions. We see a similar "re-bundling" in cancer care the way the computing industry has experienced a phase of centralization.

"In the history of the computing industry, as with most, the advent of sophisticated technology typically drives the centralization of the industry because the first manifestation is so complicated and expensive that only people with a lot of money and skill can own it and use it," explained professor Clayton Christensen.

Today, only the most sophisticated organizations – large health systems, national payers or deep-pocketed providers backed by investors – can afford the resources to evaluate and integrate best-in-class digital health services. While some cancer patients and their loved ones will continue to seek solutions independently, most would prefer to receive care in an integrated fashion.

As a result, we foresee the rise of "platforms" that could manifest as a digital health services integrator and partner with cancer care providers. We also see the rise of a new form of "cancer-focused" care providers that can truly manage the end-to-end journey of a cancer patient (including aspects of patient engagement, financial planning, clinical team/resource management and contracting).

In the near future we could see the rise of ChenMed, Oak Street Health or Iora Health-like oncology clinics, as well as Privia Health or Agilon-like oncology aggregators and VBC-enablers.

Emerging risk conveners that will fundamentally change the business model of cancer care

In The Innovator's Prescription, Christensen and Dr. Jason Hwang point out that applying technology to old business models has only raised costs in healthcare and other industries. The cancer care business model needs to evolve for digital health innovation to be adopted more quickly. With the trend toward re-bundling technologies and tech-enabled services, we see that these platforms will also accelerate the evolution of the business model.

Historically, healthcare has largely been paid for using a fee-for-service (FFS) model. However, today's FFS model is ill-equipped to reimburse providers and innovators for much-needed services (e.g. care coordination, patient engagement and patient education) that could result in better outcomes and lower total medical expenditures.

While moving oncology care toward value-based care isn't something new (e.g. the Oncology Care Model, an episode-based bundled payment model developed by CMMI in 2016 and various private-payer oncology bundles), we believe advanced analytics and patient engagement/management ushered by digital health will provide more predictability and actionable insights to providers taking on the oncology VBC model. The emerging platform players or enablers will be contracted with payers in a VBC manner.

Cancer care at home

Like the computing industry, the process of innovation that led to the centralization of cancer care will initiate a reciprocal process of decentralization. Just as we have seen in the decentralization of primary care, and care being moved from a facility to a patient's home, we foresee oncology care following a similar path.

We believe that oncology care is primed to be delivered in the comfort of the patient's home. Cancer patients are immunocompromised. The complication caused by hospital-acquired infections or being exposed to other sick patients could have profound financial and outcome implications.

Over the past several years, we have seen the emergence of decentralized clinical trial companies that look to enable home-based clinical trials. Several previously mentioned digital health startups (e.g. home phlebotomy) have laid the foundation for home-based clinical trial enablement.

Additionally, the emergence of home-based infusion and hospital-at-home/SNF-at-home companies could fundamentally drive the decentralization of cancer care. As a point of reference, approximately 800 patients (or 20% of the total patient served) served by Inbound Health in the past two years have had cancer as a primary, secondary or tertiary diagnosis.

The day of managing complex cancer in a home-based setting and augmenting the previously mentioned emerging platforms could soon be here.

About the Authors: Ian Chiang is a partner at Flare Capital Partners, a healthcare technology and services-focused venture capital firm. Prior to joining Flare, he was the SVP of product and innovation and a founding member of CareAllies, Cigna’s family of multi-payer provider services, population health management, value-based care enablement and home-based care businesses. Previously, he was a digital health entrepreneur and a former management consultant at McKinsey & Company.

Jonathon George is an MBA candidate at Kellogg School of Management and a Flare Capital Scholar. While at Kellogg, he interned at the Mayo Clinic in their Oncology Division and at OCA Ventures as an investor. Previously, he was a management consultant at Chartis focused on health systems and services.

A special thanks to Aaron Gerber, Dan McCarthy, Matt Bettonville, Ryan Langdale, Robin Shah, Shawn Morris and countless others for providing their time and insights through multiple interviews. The team at Flare interviewed 20+ executives, founders, investors, patients and leaders from across the country on topics related to oncology, innovation and tech-enabled services for cancer care delivery. This article would not be possible without their support.

Acknowledgement: OCA Ventures

Additionally, thanks to Bob Saunders, Dana Sun and the OCA Ventures team for their support and review of the research this summer. Jonathon interned with OCA Ventures on the Digital Health team and is grateful for OCA's insights, comments and collaboration throughout the process.