Those Pricey Drugs Hurt Oncologists, Too
12 CommentsBy Ed Silverman // July 8th, 2008 // 7:40 am
Doctors in the US rarely used to let costs factor into their treatment decisions. But thanks to rising prices for cancer meds that can go for more than $100,000 a year, the ethos in oncology is changing dramatically, The Wall Street Journal writes. Money issues are now disrupting relationships with patients, causing some docs to go into debt and threatening to interfere with treatment options.
Unlike most docs, who write prescriptions filled at pharmacies, oncologists must buy many drugs upfront because they’re delivered intravenously in the office. As a result, the paper writes, docs are on the hook until patients or insurers pay the bill. Reimbursement delays and denials are now more common as insurers clamp down on claims. Some patients can’t afford high co-payments.
In February, after delays in payments from insurers, Stephen Hufford, an oncologist, was working to pay off several hundred thousand dollars of past-due bills to his drug distributor. When he ordered $20,000 of chemo for three patients he was to see the next day, he tells the paper the distributor refused to deliver unless he paid in advance and reduced his outstanding balance by another $20,000. He didn’t have $40,000 in his bank account. You can watch an interview here.
Fueling the problem are new meds that transform care and provide new options for desperate patients, but can equal the down payment on a home or a child’s college tuition for a few months of treatment. The average wholesale cost for a course of Avastin to treat one type of lung cancer, for example, is $56,000, according to Genentech, but it can take 90 days to be reimbursed by Medicare or private insurers and even longer for patients to hand make co-pays. Assuming insurance does cover a course of Avastin, a 20 percent co-pay comes to $11,200, the Journal notes.
A survey of 167 cancer docs reported last year in the Journal of Clinical Oncology found that 42 percent regularly raised cost issues when discussing treatments with patients. The study, conducted by an oncologist at the Dana Farber Cancer Institute in Boston, found 23 percent of oncologists said costs influence their treatment decisions, and 16 percent said they omit discussion of very expensive meds when they know costs will tax patient resources, the paper writes.
Until recently, prescribing chemo to patients was a rich source of revenue, the Journal notes, adding that through the 1990s, oncologists profited from liberal markups of up to 100 percent on some staple chemo drugs. But the exorbitant markups drew congressional scrutiny and sharp cutbacks with the passage of the Medicare Modernization Act in 2003.
In 2005, Medicare limited doc to a 6 percent markup on intravenous drugs, which account for a large share of new cancer drugs. Private insurers followed, the Journal writes. Margins shrank. Payments from patients were less reliable, too, as many struggled to cover co-pays.
In its survey of 17 specialist fields, by the Medical Group Management Association, a professional society of physician-practice managers, oncology was one of only two fields where income was flat in 2007, at about $360,000. The average growth for all fields was about 3 percent. Anesthesiologist incomes rose 9.5 percent, noninvasive cardiologist incomes rose 11.7 percent, and urologist incomes rose 8.5 percent last year.
Insider
Cash flow management 101.
Let’s focus on the “rebates” the oncologists get………….
Atlex
Aspects of this report baffle me. While the report mentioned the significant change brought about by the Medicare Modernization Act, it ignored one key initiative–the Competitive Acquisition Program (CAP)–that would completely eliminate drug purchasing by oncologists. Essentially, this program would allow physicians to acquire injectibles from special intermediaries who would be responsible for all financials associated directly with the drug (reimbursement from CMS, patient co-pay, payment to wholesales, etc.). The physician would only be responsible for the services associated with the infusion. This program has been a dismal failure for a number of reasons, one of which is that oncologists don’t want to give up the profit margins (although lower than before, there are still positive margins).
oncologist
Yes, lets talk about the rebates. I AM an oncologist. There are few drugs that generate rebates. The reimbursement for these drugs is far less than the cost of the drug. The rebate is mandatory to cover the cost of the drug. My rebate checks go straight to the drug company. There is NO PROFIT for oncologists at present. We are strictly paying chemotherapy bills and payroll, overhead. I for one am going back to graduate school as a back up plan.We are being run out of business. We are being used as rationers of cancer care. Because we are all on the brink of going out of business (and I mean that literally) the risk of non-payment of these drugs are too heavy a burden. So cut the crap about the rebates. Those stories are old and the source has been some disgruntled employee who has not idea about the finances of an oncology practice. Try this on: your (small) practice has to pay the drug company 5 million dollars a year; your salary is less than a plumber, vet, computer guy; you have NO profit; AND, on a whim an insurance company can deny a 90,000 chemotherapy bill. So take your rebate and shove it up your orifice. We did not create the rebate check situation, we have to comply to be able to afford the drug. I am trying to figure out who YOU work for and what your agenda is.
Lili
To Oncologist:
I am very disappointed in Oncologists and Oncology. From my experince Oncology and Cancer Radiation Doctors should be more caring, understanding and many times it is not Cancer but another medical problem that minics cancer and the Oncology Centers could care less. Not only in New Jersey but in other states. I do not care–you could make lots of moeny but at the same time evaluate your patient as an indivual and maybe chemo or radiation is not always the answer. And as I said, cancer mimics many other ellness, even from medications; Do not play GOD.
Insider
For “oncologist”:
Many thanks for your interest.
http://www.communityoncology.net/journal/articles/0406367.pdf
http://www.medicalconsumers.org/pages/thescandalofanemiadrugforcancerpatients.htm
http://mdsalaries.blogspot.com/2006/06/hematologist-oncologist-salaries.html
oncologist
For insider,
You read about it. I live it.
oncologist
Well Lili,
You will get your wish. Because of the people who reflect the underlying agendas demonstrated above, there will be far fewer oncologists around in the next decade. You are experiencing rationing of care. Cancer patients are going to be hurt in the process. It appears that the government and insurance companies would rather cancer patients succumb to their disease than have to pay those high drug costs (which oncologists do not set, that is done by the drug companies, assisted by the drug company lobbyist who gives your politicians a job with the drug company once the appropriate legislation is passed). Instead of telling the public that the holders of the medical dollars do not want to pay for cancer treatment, the oncologist will be forced to do things he did not go into medicine to do. I for one am getting out. (Insider et al, you have won, be happy) Unfortunately for me, it can not happen over night. I will have to go back to school. Never made enough money, but, oh that’s right, we have those “articles” to contradict me . . . .
In this day and age, you think people would be savvy enough about journalism. When a particular group is demonized as much as we have been, suspect foul agendas. Personally, I went into oncology to help people. But taking care of cancer patients costs an enormous amount of money, little of which goes in my pocket. Though, the agenda drivers have done a splendid job of shaping the public opinion to appear that it does. We can’t treat cancer just with our time, a smile and a prescription pad. That is what hospice is for. I have only had one patient in my career who requested hospice the first time I met him. Hospice-appropriate patients rarely wish to participate. Human nature does not want to give up, so the rationer of care has stepped in.
Nathan
Oncologist - “Human nature does not want to give up…”
You hit the nail on the head. When do we “give up”? We are already spending 17% of our GDP on healthcare. When does this become impractical? As someone in the pharma industry, I hate to ask this question, but as a society I think we MUST address it. As medical advances progress, are we going to continually spend a greater and greater portion of our GDP in our hopes for immortality? When does it reach a breaking point? 25% GDP? 50% GDP? 90% GDP?
oncologist
Yes, we must. But it is not being addressed. Rather, the dispensers of the care are being attacked. That is my point. Why demonize the oncologist? WE DO NOT SET THE PRICE OF THE PRODUCT. We do not advertise. Withholding treatment we think not appropriate can and does end in litigation. Rather than attack the lowly oncologist, lets talk about why the pharmacology company CEO makes millions. Why the chemo drug cost are so much higher than oral drugs. Why do the chemo companies tell us the drug costs are so high because of the cost of research, when, actually the cost of research is a tax write off. Why has the FDAs approval of cancer drugs come to a screeching halt? Why the health insurance CEOs “reportedly” (for Insiders benefit) make 10-20 million dollars a year. Why are the people’s insurance premiums used to fund stock holders instead of being used as shared risk? Why has cancer research funding been slashed by the president? What about the astronomically high cost of medical equipment. Please refer yourself to the medicare pie and see extremely small piece of the the pie that actually goes to the physician. To get rid of the chemotherapy cost, it appears that the end dispensers are being driven out of business. Why is this rationing of care not being discussed? Because the policy makers, our politicians, do not want to tell the patient they can not get care. That would make them un-electable. That is NOT the job of the oncologist. My Hippocratic oath was not watered down. The system does need fixing. But tearing down a small component of it is not the answer. It is the patient who ultimately suffers. It is a much wider social responsibility, one that is being shoved off onto the oncologist without the laws to back it up.
Insider
Oncologist -
We agree: The system does need fixing.
Big Pharma spotted the opportunity and gouged up the price of iv chemo over the last decade.
Oncologists mouths were stuffed with gold to stop them complaining about the hike.
I have lived this - from the inside of Big Pharma and it makes me sick.
oncologist
This is my last post.
Your naivity would be endearing if it wasn’t so tragic. Like my patients who see these huge dollar amounts and think they go into my pocket, you do not see what is really going on. My tax return for 2006 looks great. But what is not reflected is the payback of a huge loan I had to take out to pay for the massive amounts of extra chemotherapy ordered at the end of 2005 to cover the influx of a very sick population of patients migrating from two huge natural disasters. Some of the patients were actually dying in there hotel rooms. Those were the “lucky” ones who could afford a hotel room. What looked like salary in 2006 was actually money going to the bank to pay back the loan. But the tax man does not see that and I had to take out another loan to pay the taxes that looked like profit at the end of 2006. I still haven’t finished paying off those loans. Instead of appreciation for our efforts we had to fight with United Health Care for 10 months to get a $90,000 (cost to me) chemo bill re-imbursed. United Health care never did pay. Medicare sucked it up, Thank God.
Also not reflected in these seemingly huge salaries are the loans that have had to be taken out to pay chemo bills when the stockholder companies have with-held reimbursement for an entire quarter to cook their books. In the end the government gets most of the profit anyway. Yes, we got an orifice-full but it wasn’t gold. I we got kicked when we were down and trying to help.
I’m done here. Don’t bother responding as I will not be checking back. When you think of an oncologist, imagine the image of a duck who seems to be gliding effortlessly on the smooth lake but under the water’s surface is kicking like hell. My patient’s already have enough grief, they do not need more. Thanks for letting me vent.
Insider
You are welcome.