In a merger of opposites, City of Hope to buy Cancer Treatment Centers of America for $390 million

City of Hope is a nonprofit hospital system in Los Angeles. In early December they decided they will purchase Cancer Treatment Centers of America for $390 million to bring together a hospital system famous for its research as well as one that is better known for marketing that critics have described as overly aggressive. Cancer Treatment of America has gotten controversial over the years because of the way they select their patients as well as their insurance. 

City of Hope’s CEO, Robert Stone, in an interview explained that the deal was based around City of Hope’s mission to both care for cancer patients and develop new technologies. The combined company will be “a one-of-a-kind national cancer research and treatment system,” Stone said. “[Our] scientific expertise with their network and patient experience system will create something very special.”

City of Hope is going to learn and decide how to manage the controversies within CTCA and it will now become their ethical responsibility to fix the problems.

In 2013, it was alleged that CTCA was refusing patients treatment in order to improve the mortality statistics that is used to promote its cancer centers. In 2016, a study found that they spent $101.7 million promoting its services in TV, print, online, and other ads. A 2019 analysis likewise found that the CTCA spent more than competitors on advertising and that its spending was not correlated with better results for patients.

There are a couple things to dissect here. City of Hope has an idea that they want to upsize the company with CTCA’s marketing skills instead of downsizing, but are they merging because of the money opportunity? Why would a hospital nonprofit with a great reputation want to combine with such a controversial organization? They claim that it is an opportunity to move with the speed that cancer patients deserve, but if CTCA already has a track-record of denying “too-sick” or patients for their mortality rate, which is awfully unethical in itself, why go with that organization?

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