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Business Observer Friday, Feb. 15, 2019 4 months ago

A new BEginning for 21st Century Oncology

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In one year, new CEO Kimberly Commins-Tzoumakas transformed the formerly legally challenged, bankrupt cancer care company from the top on down.
by: Andrew Warfield Lee-Collier Editor

As the chief legal adviser for 21st Century Oncology, Kimberly Commins-Tzoumakas knew more than anybody about the company’s formerly crippling legal challenges.

And as an attorney who naturally gravitates toward the operational side of her clients’ businesses, she was also best positioned to understand how to return the company to prominence after bankruptcy.

That was the assessment of the ownership group of 21st Century Oncology, headquartered in Fort Myers. It named Commins-Tzoumakas interim CEO in January 2018, then removed the interim label three months later.

In just one year on the job, Commins-Tzoumakas is credited with engineering a cultural and organizational renaissance that has positioned 21st Century Oncology, one of the nation’s largest privately held cancer treatment companies, for growth. Equally important, it emerged from bankruptcy in mid-2018 with more than half of its $1.1 billion debt erased. The ownership that put its faith in Commins-Tzoumakas consists of several hedge funds and private equity firms. 

“There were lots of opportunities to advise,” says Commins-Tzoumakas, formerly managing partner for the Michigan office of Hall, Render, Killian, Heath & Lyman — the nation’s largest health care-focused law firm. Among her clients was 21st Century Oncology. 

Uncontrolled growth and chasing the bottom line, she says, was the root cause of most of 21st Century's problems. 

“If you’re growing very quickly and moving too fast, you need to slow down and make sure your infrastructure can support what you’re doing,” Commins-Tzoumakas says. “That's the crux of what happened with this company. It just grew phenomenally quickly in the late 2000s and could not support it. You can't really recover from that once you let it happen."

The company’s issues were significant. Two years ago, it settled a lawsuit with the federal government alleging payment claims were submitted for medically unnecessary cancer tests, paying nearly $20 million. Months later, it paid nearly $35 million to settle a similar lawsuit alleging improper use of post-treatment radiation analysis. And in March 2016, the company disclosed a data breach that affected 2.2 million patients.

The financial issues were just as significant. To Commins-Tzoumakas's point, the company, for example, spent $10 million from 2011 to 2014 to improve its internal operations team to integrate its acquisitions. And that figure is a pittance compared to the tens of millions it spent in the decade prior to its May 2017 bankruptcy filing to acquire other practices. In a 2014 interview, 21st Century founder Daniel Dosoretz cited the company's desire to outrun cutbacks in government and private insurance reimbursements as the reason it took on a heavy debt load. (Dosoretz, a radiation oncologist who founded the business in 1997, remains a full-time physician with the company.)

But that move, on a cumulative basis, backfired. 

“In late 2016, it became very clear to the equity owners as well as any of us who were in advisory roles that the company had reached a point where it needed a restart, and the only way you were going to get a restart was to start from the top down in restructuring,” says Commins-Tzoumakas.

On a parallel track, Commins-Tzoumakas set about a rebranding plan designed as much to rebuild the company’s culture as its public perception. This inside-out approach to reconstruct Century 21 Oncology’s culture began in her first month on the job, when she changed the name of the headquarters campus on Colonial Drive from Corporate Headquarters to Support Center. 

“And it wasn’t just a symbolic change,” says Commins-Tzoumakas. “It was a change in the mindset to say we are here to support what is happening out there in our clinics rather than them supporting us.”

Dr. Alan Brown

Dr. Alan Brown, a radiation oncologist who practices in Fort Myers and Cape Coral, joined Century 21 Oncology in 2006, before the its cultural shift toward cost containment.

“That’s not to say that the care for the patients changed, but the focus on containment of costs ultimately stifled innovation and caused stagnation,” says Brown. “The feeling at the clinic level became one of pessimism, and a huge chasm developed between the clinics and corporate.”

That chasm, Brown adds, has been closed by Commins-Tzoumakas’ teamwork approach. 

“She understands the clinics are the catalyst for growth, and she has bridged that gap,” he says. “She calls the people in the clinics her ‘dream team’ and leverages corporate as the support staff for the clinics.”

A natural transition

Commins-Tzoumakas spent much of her 20-year legal career advising boards of directors and CEOs of health care organizations. She worked to build the health care sector of her firm’s Michigan office from two attorneys to 30 while also serving on the firm’s growth and development team, on the finance committee and the board.

“I always joked I was never really good at being the technical lawyer. I always moved toward operations of everything I did, so I had a strong interest in being in a leadership role as a CEO,” she says. 

Not that it was easy. The transition required teamwork and a total buy-in at the support center and through its clinics. “There were a lot of people who surprised me," Commins-Tzoumakas says, "physicians who stepped up and became advisers very quickly.”

That buy-in was critical to rebuilding Century 21 Oncology, not as a massive company but as the local clinic that has the backing and the technological and organizational advantages, of a major medical group.

New COO Charlie Powell, a veteran medical system executive named to the post in January, has already seen the results. 

"All of my career in health care," says Powell, "I’ve partnered with physicians and they have always said if you keep the patient first, you will be all right.”

Shifting to growth mode

Under Commins-Tzoumakas’ leadership, Century 21 Oncology has quickly turned liabilities into assets. It now operates 169 radiation treatment centers, including 131 in 16 states and 36 in eight Latin American countries. It employs or is affiliated with more than 928 physicians. Total employment is about 3,600, including 800 in the home office. While there was some turnover during restructuring, there were no layoffs.

Charlie Powell

“It's been an exciting year,” she says. “We are getting calls from all over the country now looking at growth and expansion opportunities with physicians, and to be at that place considering where we were 12 months ago is a phenomenal success. It speaks to what everybody at the company has done, and frankly the resilience of a really impressive group of physicians.”

Powell says the company’s rebound is largely due to Commins-Tzoumakas’ emphasis on rebuilding the relationship between the corporate office and the clinics. 

“By keeping that one dream team concept in mind, you create that culture that the corporate office is there to support treatment of patients and not the other way around," he says. "If we have the mindset to take care of our patients and serve our physicians, the rest will take care of itself.”

Brown, the Fort Myers radiation oncologist, says the clinic-centric focus has rebuilt the relationship between practitioners and the support center. Also, a move toward corporate transparency, facilitated by a weekly CEO update sent to all employees, stands in stark contrast to the lack of communication prior to Commins-Tzoumakas’ arrival, he adds.

“There are always financial obstacles in health care, but Kim’s approach is to overcome them and center on patient care,” says Brown. “She has emphasized the one team approach whether it’s the front desk or the therapist or the physician. She unites us on accomplishing goals and that translates to patient care.”

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