science and art calls for people to try metformin and aspirin, cheap, safe and effective, everything that hospitals and those motivated primarily by money seek to kill
When Dr. Jeffery Ward, a cancer
specialist, and his partners sold their private practice to the Swedish
Medical Center in Seattle, the hospital built them a new office suite
50 yards from the old place. The practice was bigger, but Dr. Ward saw
the same patients and provided chemotherapy just like before. On the surface, nothing had changed but the setting.
But
there was one big difference. Treatments suddenly cost more, with
higher co-payments for patients and higher bills for insurers. Because
of quirks in the payment system, patients and their insurers pay
hospitals and their doctors about twice what they pay independent
oncologists for administering cancer treatments.
There
also was a hidden difference — the money made from the drugs
themselves. Cancer patients and their insurers buy chemotherapy drugs
from their medical providers. Swedish Medical Center, like many other
others, participates in a federal program that lets it purchase these
drugs for about half what private practice doctors pay, greatly
increasing profits.
Oncologists
like Dr. Ward say the reason they are being forced to sell or close
their practices is because insurers have severely reduced payments to
them and because the drugs they buy and sell to patients are now so
expensive. Payments had gotten so low, Dr. Ward said, that they only way
he and his partners could have stayed independent was to work for free.
When he sold his practice, Dr. Ward said, “The hospital was a refuge,
not the culprit.”
When
a doctor is affiliated with a hospital, though, patients end up paying,
out of pocket, an average $134 more per dose for the most commonly used
cancer drugs, according to a report by IMS Health, a health care
information company. And, the report notes, many cancer patients receive
multiple drugs.
“Say
there was a Costco that had very good things at reasonable prices,”
said Dr. Barry Brooks, a Dallas oncologist in private practice. “Then a
Neiman Marcus comes in and changes the sign on the door and starts
billing twice as much for the same things.” That, he said, is what is
happening in oncology.
A Quirk in Drug Pricing
Insurers pay hospitals and doctors affiliated with hospitals
more to adminster chemotherapy drugs than they pay independent doctors.
Insurance reimbursment
per dose in a hospital or
hospital-affiliated office
Reimbursment
per dose in a
private practice
Chemotherapy drug
(and some cancers it can treat)
$5,000
$7,500
5,000
2,500
$0
$0
2,500
Pertuzumab (breast cancer)
Rituximab (lymphoma, leukemia)
Bevacizumab (several cancers)
Cetuximab (head, neck, colorectal)
Trastuzumab (breast, stomach)
Fulvestrant (breast)
Leuprolide Acetate (prostate)
Epirubicin (breast)
Interferon alfa-2B (lymphoma, others)
Mitoxantrone (prostate, leukemia)
Doxorubicin (leukemia, others)
Goserelin (prostate, breast)
Daunorubicin (leukemia)
Idarubicin (leukemia)
Mitomycin C (stomach, pancreas)
The
situation is part of the unusual world of cancer medicine, where
payment systems are unique and drive not just the price of care but what
drugs patients may get and where they are treated. It raises questions
about whether independent doctors, squeezed by finances, might be swayed
to use drugs that give them greater profits or treat poorer patients
differently than those who are better insured.
But
one thing is clear: The private practice oncologist is becoming a
vanishing breed, driven away by the changing economics of cancer
medicine.
Practices
are making the move across the nation. Reporting on the nation’s 1,447
independent oncology practices, the Community Oncology Alliance, an
advocacy group for independent practices, said that since 2008, 544 were
purchased by or entered contractual relationships with hospitals,
another 313 closed and 395 reported they were in tough financial
straits. In western Washington, just one independent oncology group is
left.
Christian
Downs, executive director of the Association of Community Cancer
Centers, said that although there are no good data yet, he expected the
Affordable Care Act was accelerating the trend. Many people bought
inadequate insurance for the expensive cancer care they require.
Community doctors have to buy the drugs ahead of time, placing a burden
on them when patients cannot pay. The act also requires documentation of
efficiencies in medical care which can be expensive for doctors in
private practice to provide. And it encourages the consolidation of
medical practices.
The
American Hospital Association cites advantages for patients being
treated by hospital doctors. “The hassle factor is reduced,” said Erik
Rasmussen, the association’s vice president of legislative affairs.
Patients can have scans, like CT and M.R.I., use a pharmacy and get lab tests all in one place instead of going from facility to facility, he said.
And,
he added, there is a reason hospitals get higher fees for their
services — it compensates them for staying open 24 hours and caring for
uninsured and underinsured patients.
For doctors in private practice, providing chemotherapy to uninsured and Medicaid
patients is a money loser. As a result, many, including Dr. Ward before
he sold his practice, end up sending those patients to nearby hospitals
for chemotherapy while keeping them as patients for office visits.
“We
hate doing it, I can’t tell you how much we hate doing it,” said Dr.
Brooks, the Texas oncologist. “But I tell them, ‘It will cost me $200 to
give you this medication in my office, so I am going to ask you to go
to the hospital as an outpatient for infusions.’ ”
Dr.
Peter Eisenberg, in private practice in Marin County in Northern
California, said: “The disgrace is that we have to treat people
differently depending on how much money they’ve got. That we do
diminishes me.”
Hospitals
may be less personal and less efficient, said Dr. Richard Schilsky,
chief medical officer at the American Society of Clinical Oncology. Many
private practice oncology offices, he said, “Run on time, they are
efficient, you get in, you get out, as opposed to academic medical
centers where they may be an hour and a half behind.”
Dr.
Ward and others in private practice said they tried for years to make a
go of it but were finally defeated by what he described as “a series of
cuts in oncology reimbursement under the guise of reform to which
private practice is most vulnerable.”
Lower
reimbursements have two effects. One is on overhead. Unlike other
doctors, oncologists stock their own drugs, maintaining a sort of
mini-pharmacy. If a patient gets too sick to receive a drug or dies, the
doctor takes the loss. That used to be acceptable because insurers paid
doctors at least twice the wholesale price of drugs. Now doctors are
reimbursed for the average cost of the drug plus 4.3 percent, there are
more and more drugs to stock, and drugs cost more.
“The overhead is enormous,” Dr. Schilsky said. “This is one of the reasons why many oncologists are becoming hospital-based.”
The
second — and bigger — effect is less profit from selling drugs to
patients. For years, chemotherapy drugs provided a comfortable income.
Those days are gone, doctors say.
The
finances are very different in hospitals, with their higher
reimbursement rates for administering drugs, discounts for buying large
quantities, and a special federal program that about 30 percent of
hospitals qualify for. The program, to compensate research hospitals and
hospitals serving poor people, lets hospitals buy chemotherapy drugs
for all outpatients at about a 50 percent discount.
In addition, Dr. Schilsky notes, cancer patients at hospitals use other services, like radiation therapy, imaging and surgery.
“A cancer patient is going to generate a lot of revenue for a hospital,” Dr. Schilsky said.
Health
care economists say they have little data on how the costs and profits
from selling chemotherapy drugs are affecting patient care. Doctors are
constantly reminded, though, of how much they can make if they buy more
of a company’s drug.
Celgene,
for example, in a recent email about its drug Abraxane, told one doctor
who had bought 50 vials that he could get a rebate of $647.51 by buying
68 vials. If he bought 175 vials he’d get $1,831.93
This
hidden profit possibility troubles Dr. Peter B. Bach, director of the
Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer
Center.
“When
you walk into a doctor’s office you don’t know that in most cancer
scenarios there are a range of therapeutic choices,” Dr. Bach said.
“Unless the doctor presents options, you assume there aren’t any.”
While
individual oncologists deny choosing treatments that provide them with
the greatest profit, Dr. Kanti Rai, a cancer specialist at North
Shore-Long Island Jewish Cancer Center, said it would be foolish to
believe financial considerations never influence doctors’ choices of
drugs.
“Sometimes
hidden in such choices — and many times not so hidden — are
considerations of what also might be financially more profitable,” he
said.
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