Scaling Value-Based Oncology Care: Why The Oncology Institute's Leadership Shift Positions It for Long-Term Growth

The healthcare sector is undergoing a seismic shift toward value-based care models, prioritizing outcomes over volume and empowering community-based providers to deliver cost-efficient, patient-centered oncology services. Nowhere is this transition more evident than in the rise of Management Service Organizations (MSOs) like The Oncology Institute (TOI), which has positioned itself as a leader in oncology care through strategic partnerships and operational innovation. The recent appointment of Kristin England as Chief Administrative Officer (CAO) marks a pivotal moment for TOI, as her expertise in revenue cycle optimization and technology integration aligns perfectly with the Institute's ambitions to scale its MSO model while capitalizing on McKesson's (MCK) oncology-driven growth.

The Kristin England Factor: Bridging Strategy and Execution

England's 15-year tenure at McKesson's US Oncology Network equipped her with deep insights into the operational and financial levers driving community oncology practices. Her role at McKesson included overseeing revenue cycle modernization, practice management systems, and clinical operations—skills critical to TOI's mission of expanding its MSO platform. Under her leadership, TOI aims to:
1. Optimize revenue cycles: By streamlining billing, coding, and reimbursement processes, TOI can reduce administrative overhead and improve cash flow, a priority as Medicare shifts toward value-based payment models like the Enhancing Oncology Model (EOM).
2. Accelerate technology adoption: England's experience with McKesson's tools—such as Practice Insights℠ for quality reporting and iKnowMed EHR for clinical data integration—will enable TOI to standardize workflows and reduce costs through automation.
3. Scale the MSO model: With over 50+ practices across 12 states, TOI's MSO platform stands to benefit from centralized analytics and shared best practices, mirroring McKesson's network expansion strategies.

The McKesson Advantage: Synergies Fueling TOI's Growth

TOI's operational success is inextricably linked to McKesson's 2025 initiatives, which emphasize oncology specialization, technology-driven efficiency, and value-based care:
- Network Expansion: McKesson's acquisition of Florida Cancer Specialists (a 70% stake) and its integration into the US Oncology Network expands access to clinical trials and shared resources. TOI, already leveraging McKesson's drug distribution and clinical trial support, gains a competitive edge in patient recruitment and advanced therapy adoption.
- InspiroGene's Impact: McKesson's new business unit for cell/gene therapies directly benefits TOI's research partnerships, enabling access to breakthrough treatments and reducing the cost of complex drug management.
- Tech Modernization: McKesson's AI-driven cloud infrastructure upgrades (e.g., Microsoft Azure integration) will enhance TOI's ability to analyze oncology data at scale, improving outcomes and reducing waste.

The financial underpinnings of this partnership are equally compelling. McKesson's fiscal 2025 results show 13% EPS growth to $7.07, driven by oncology and pharmaceutical distribution gains. With TOI's 57,000 annual infusions and 8,000+ chemotherapy prescriptions, its reliance on McKesson's supply chain and clinical tools positions it to capture a rising share of the $150B+ U.S. oncology market.

Valuation and Investor Upside: A Strategic Buy in a Growing Sector

While TOI is not publicly traded, its performance metrics and McKesson's financial health provide clues about its valuation potential:
- Operational Leverage: TOI's MSO platform reduces per-patient costs by 15–20% through standardized protocols and shared resources, a key advantage in value-based care.
- Clinical Trial Access: Collaborations with Sarah Cannon Research Institute and McKesson's InspiroGene unit create a pipeline of revenue from novel therapies, mitigating reliance on traditional chemotherapy margins.
- Regulatory Tailwinds: CMS's push for oncology-specific quality measures (e.g., Mutation Testing for Lung Cancer) aligns with TOI's use of McKesson's Practice Insights℠, enabling better reimbursement and patient outcomes.

Investors should view TOI as a proxy for the broader oncology MSO sector, which is poised for consolidation and growth. With McKesson's stock up 18% YTD and its oncology segment driving profitability, TOI's alignment with this juggernaut suggests significant upside. Historical data further supports this thesis: when McKesson exceeds earnings expectations, its stock has historically delivered strong short-term returns, with a 70% win rate within 3 days and 30 days of positive surprises.

Risks and Considerations

• Dependence on McKesson: TOI's reliance on McKesson for distribution and tech could pose risks if supply chain disruptions or regulatory changes impact their partnership.
• Market Competition: Larger players like US Oncology and independent groups may intensify competition for practice acquisitions.

Conclusion: A Buy with Strong Sector Tailwinds

The Oncology Institute's appointment of Kristin England as CAO signals a strategic inflection point. Her ability to merge McKesson's operational expertise with TOI's clinical scale could unlock substantial value in a sector primed for growth. With rising demand for community-based oncology, advanced therapies, and value-based reimbursement models, TOI is well-positioned to capitalize on these trends. Investors should consider TOI a strategic long-term buy, particularly as its partnership with McKesson continues to drive efficiency and innovation.

Final Note: Monitor McKesson's oncology division performance and TOI's clinical trial enrollment metrics as key indicators of future success. The oncology sector's structural shift to value-based care is irreversible, and early movers like TOI stand to benefit disproportionately.