A Call to Eliminate 'Chemotherapy Concession'

[gdpawel]

(Medscape Medical News) - A new study confirms that financial incentives exist for some US oncologists in the prescribing of chemotherapy and growth factors for treatment-related anemia.

These potential "inducements" are not widespread, existing for only about 25% of 480 medical oncologists surveyed, and are mostly among fee-for-service clinicians or those with financial incentives in their salary structure, found the authors, who were led by Jennifer Malin, MD, PhD, of the University of California, Los Angeles. She is also medical director of oncology of WellPoint, a managed care company headquartered in Indianapolis, Indiana.

Such financial incentives need to be "decreased" because they may be contributing to rising cancer costs, Dr. Malin and colleagues explain.

"Eliminating the chemotherapy concession" is a "potentially effective solution" to these financial temptations, the authors write in the discussion section of the study, which was published online December 26th in the Journal of Clinical Oncology.

The chemotherapy concession describes the process whereby oncologists buy their own stock of drugs and then mark up the cost when billing payors for their administration. "Specialty pharmacy programs" that work in tandem with payors could supplant this concession by supplying clinics with drugs, effectively eliminating the "buy and bill" process, say the authors.

The chemotherapy concession accounts for approximately 65% of revenue in a typical oncology practice, "dwarfing the income from evaluation and management," write the study authors, citing other research.

Another expert sees the same problems as the study authors but stops short of calling for an end to the chemotherapy concession.

"The current system is set up to reward prescribing more," writes Yu-Ning Wong, MD, of Fox Chase Cancer Center in Philadelphia, Pennsylvania, in an editorial accompanying the article.

"Uncoupling the relationship between prescribing patterns and income may be an important step in controlling cancer costs," she also writes.

However, in comments made to Medscape Medical News, Dr. Wong emphasized that "we need to talk about how we pay for cancer care as a whole, not just how we pay for intravenous chemotherapy."

We should not cut the reimbursements for intravenous chemotherapy... Dr. Yu-Ning Wong

Furthermore, she said that "we should not cut the reimbursements for intravenous chemotherapy without increasing reimbursement elsewhere to pay practices for the work they need to do to care for the patients."

For example, said Dr. Wong, there have been 7 new drugs approved for the treatment of metastatic kidney cancer since 2005, but only 2 are intravenous. The remaining 5 are oral drugs, but they still have the potential to cause side effects such as hypertension, diarrhea, skin rashes, and fatigue.

"Oncologists are still responsible for managing these toxicities, yet unlike intravenous chemotherapy, they don't get reimbursed for the administration," she said.

"We need to think about how to fairly compensate a practice for the work they do to care for cancer patients," Dr. Wong commented.

Study Reported Perception of Financial Gain

The new study is not proof that oncologists made more money by prescribing chemotherapy and growth factors, says Dr. Wong.

The survey upon which the study is based only asked clinicians whether they perceived that their income would rise if they prescribed chemotherapy and growth factors.

Nevertheless, it is important research because it indicates that financial incentives might matter, she says.

"If oncologists think that they will make more money by prescribing more, perhaps they will write more prescriptions," Dr. Wong points out.

The study also found that there was an association between practice type and perceived financial benefits.

Compared with medical oncologists who were paid a fixed salary, those who were in fee-for-service practices or who were paid a salary with a productivity incentive were more likely to anticipate greater income if they administered chemotherapy (odds ratio, 7.05 and 7.52, respectively; for both, P < .001). Similar associations were found for growth factor administration.

Overall in the survey, 40% to 50% of physicians whose incomes were based on fee for service or who received a salary with productivity incentives indicated that their income would increase when they prescribed chemotherapy or growth factors.

Dr. Malin and her coauthors used data from the Cancer Care Outcomes Research and Surveillance study (CanCORS), which examined care delivered to more than 10,000 patients initially diagnosed with lung or colorectal cancer from 2003 to 2005; these patients were living in northern California, Los Angeles County, North Carolina, Iowa, or Alabama or received care in 1 of 5 large health maintenance organizations (HMOs) or 15 Veterans Health Administration (VHA) sites. Data that were collected included physician surveys.

Problems With Specialty Pharmacy

The study authors acknowledge that there are "many challenges" related to implementing specialty pharmacies in oncology, "including issues related to storage, administration, and concerns about waste if site-of-care laboratory testing indicates that the drug should not be given."

Both the authors and Dr. Wong discuss other options to reduce potential financial incentives in the medical oncology setting.

"Another approach that has been proposed involves paying providers for episodes of care (eg, adjuvant therapy for stage III colon cancer) in which the payment would cover all costs of care, including chemotherapy and supportive care drugs," write the study authors. "The impact of this and other similar approaches on the cost and quality of cancer care is not yet known."

Dr. Malin is an employee of WellPoint and is a consultant to Onyx Pharmaceuticals. Dr. Wong is a consultant to Independence Blue Cross and has a research grant with Aetna.

J Clin Oncol. DOI: 10.1200/JCO.2012.43.6063, 10.1200/JCO.2012.46.6169.

http://jco.ascopubs.org/content/earl...O.2012.43.6063
http://jco.ascopubs.org/content/earl...O.2012.46.6169

[gdpawel]

Jennifer L. Malin, Jane C. Weeks, Arnold L. Potosky, Mark C. Hornbrook and Nancy L. Keating

Jennifer L. Malin, Jonsson Comprehensive Cancer Center and David Geffen School of Medicine at University of California at Los Angeles and Greater Los Angeles VA Healthcare System, Los Angeles, CA; Jane C. Weeks, Dana-Farber Cancer Institute; Nancy L. Keating, Brigham and Women's Hospital and Harvard Medical School, Boston, MA; Arnold L. Potosky, Lombardi Comprehensive Cancer Center, Georgetown University Medical Center, Washington, DC; and Mark C. Hornbrook, Center for Health Research, Kaiser Permanente Northwest, Portland, OR.

Corresponding author: Jennifer L. Malin, MD, PhD, WellPoint, 1 WellPoint Way, Thousand Oaks, CA 91362; e-mail: [email]jennifer.malin@wellpoint.com

Abstract

Purpose:

The cost of cancer care continues to increase at an unprecedented rate. Concerns have been raised about financial incentives associated with the chemotherapy concession in oncology practices and their impact on treatment recommendations.

Methods:

The objective of this study was to measure the physician-reported effects of prescribing chemotherapy or growth factors or making referrals to other cancer specialists, hospice, or hospital admissions on medical oncologists' income. US medical oncologists involved in the care of a population-based cohort of patients with lung or colorectal cancer from the Cancer Care Outcomes Research and Surveillance (CanCORS) study were surveyed regarding their perceptions of the impact of prescribing practices or referrals on their income.

Results:

Although most oncologists reported that their incomes would be unaffected, compared with salaried oncologists, physicians in fee-for-service practice, and those paid a salary with productivity incentives were more likely to report that their income would increase from administering chemotherapy (odds ratios [ORs], 7.05 and 7.52, respectively; both P < .001) or administering growth factors (ORs, 5.60 and 6.03, respectively; both P < .001).

Conclusion:

A substantial proportion of oncologists who are not paid a fixed salary report that their incomes increase when they administer chemotherapy and growth factors. Further research is needed to understand the impact of these financial incentives on both the quality and cost of care.

The Medical Oncologist

http://cancerfocus.org/forum/showthread.php?t=3395

It is more than just 'perceptions' that medical oncologists are influence by financial chemotherapy concessions.

If anybody understands the politics of the 'chemotherapy concession,' you'll understand it is a shameless way to preserve a system which presents an impossible conflict of interest for both cancer centers and treating oncologists. A system in which there is a financial incentive to select certain forms of chemotherapy over certain others because they receive higher reimbursement.

Not the least of the problems is that this inherently corrupt system provides a strong 'disincentive' to individualize or tailor therapy, based on laboratory testing, because such individualized treatment removes the oncologist's 'freedom to choose' from between a large number of different possible drug regimens, with wildly differing profit margins.

What is needed is to remove the profit incentive from the choice of cancer treatments. Patients should receive what is best for them and not what is best for their oncologists. It amazes me that private insurance carriers do not like to pay for assays but they don't emphatically mandate it as a requirement for obtaining chemotherapy reimbursement against "ill-directed" treatment.

Evidence in support of these assays is more than sufficient to justify them. But 'profit' is a powerful motivating force. Among the private payers at least, the profit motive is entirely consistent with the goal of the assays, which is to identify efficacious therapies irrespective of drug mark-up rates.

[gdpawel]

When a pharmacy sells the heartburn drug Zantac, each pill costs about 35 cents. But doctors dispensing it to patients in their offices have charged nearly 10 times that price, or $3.25 a pill.

The same goes for a popular muscle relaxant known as Soma, insurers say. From a pharmacy, the per-pill price is 60 cents. Sold by a doctor, it can cost more than five times that, or $3.33.

At a time of soaring health care bills, experts say that doctors, middlemen and drug distributors are adding hundreds of millions of dollars annually to the costs borne by taxpayers, insurancecompanies and employers through the practice of physician dispensing.

Most common among physicians who treat injured workers, it is a twist on a typical doctor’s visit. Instead of sending patients to drugstores to get prescriptions filled, doctors dispense the drugs in their offices to patients, with the bills going to insurers. Doctors can make tens of thousands of dollars a year operating their own in-office pharmacies. The practice has become so profitable that private equity firms are buying stakes in the businesses, and political lobbying over the issue is fierce.

Doctor dispensing can be convenient for patients. But rules in many states governing workers’ compensation insurance contain loopholes that allow doctors to sell the drugs at huge markups. Profits from the sales are shared by doctors, middlemen who help physicians start in-office pharmacies and drug distributors who repackage medications for office sale.

Alarmed by the costs, some states, including California and Oklahoma, have clamped down on the practice. But legislative and regulatory battles over it are playing out in other states like Florida, Hawaii and Maryland.

In Florida, a company called Automated HealthCare Solutions, a leader in physician dispensing, has defeated repeated efforts to change what doctors can charge. The company, which is partly owned by Abry Partners, a private equity firm, has given more than $3.3 million in political contributions either directly or through entities its principals control, public records show.

Insurers and business groups said they were amazed by the little-known company’s spending spree. To plead its case to Florida lawmakers, Automated HealthCare hired one of the state’s top lobbyists, Brian Ballard, who is also a major national fund-raiser for the republican presidential campaign.

“I consider the fees that these people are charging to be immoral,” said Alan Hays, a Republican state senator in Florida who introduced a bill to bar physicians from dispensing pills that was defeated. “They’re legal under the current law, but they’re immoral.”

Physician prescribing works like this: Middlemen like Automated HealthCare help doctors set up office pharmacies by providing them with billing software and connecting them with suppliers who repackage medications for office sale. Doctors sell the drugs but they do not collect payments from insurers. In the case of Automated HealthCare, the company pays the doctor 70 percent of what the doctor charges, then seeks to collect the full amount from insurers.

The number of doctors nationwide who dispense drugs in their office is not known and the practice is prevalent only in states where workers’ compensation rules allow for large markups.

Dr. Paul Zimmerman, a founder of Automated HealthCare, said that insurers and other opponents of doctor dispensing were distorting its costs by emphasizing the prices of a few drugs, rather than the typical price spread between physician- and pharmacy-dispensed drugs.

Both Dr. Zimmerman and physicians who sell drugs also said the workers’ compensation system was so bureaucratic and complex that an injured employee could wait days before getting a needed medication through a pharmacy.

“We did not institute this because of the money,” Dr. Marc Loev, a managing partner of the Spine Center, a chain of clinics in Maryland, testified last year at a public hearing in Baltimore. “We instituted it because we were having significant difficulty providing the care for workers’ compensation patients.”

The loophole that raises the price of physician-dispensed drugs often involves a benchmark called “average wholesale price.” The cost of a medication dispensed through a workers’ compensation plan is pegged in some states to that benchmark, which is supposed to represent a drug’s typical wholesale cost.

But doctor-dispensed drugs can undergo an “average wholesale price” makeover. It happens when firms that supply doctors with medications buy them in bulk from wholesalers and repackage them for office sale. These “repackagers” can set a new “average wholesale price,” one that is often many times higher than the original.

For example, in 2010, a physician associated with the Spine Center, Dr. Loev’s practice in Maryland, gave a patient a prescription for 360 patches containing a pain-numbing drug, lidocaine. The worker’s insurer was charged $7,304, according to a copy of that bill provided to The New York Times by a lawyer, Michael S. Levin, who represents insurance companies.

A similar number of patches dispensed by a doctor in California, which changed its regulations in 2007, is about $4,068, according to the California Workers’ Compensation Institute, a research group.

GlaxoSmithKline settles fraud case for $3 billion

Warren G. Moseley, the president of a company in Tulsa, Okla., Physicians Total Care, that repackages drugs for office sale by doctors, said it charged physicians $2,863 for 360 patches.

Dr. Loev, who uses Automated HealthCare’s services, declined to be interviewed and did not respond to specific written questions from The Times.

Dr. Charles Thorne, a principal at Multi-Specialty HealthCare, another Maryland-based chain of clinics that dispenses drugs, also declined to be interviewed.

Dr. Zimmerman, the co-founder of Automated HealthCare, said that drug prices are set by companies that repackage medications for office sales.

He added that Automated HealthCare referred doctors to about a dozen repackagers. But the company has a relationship with one repackaging company called Quality Care Products, based in the Midwest. The two firms have exhibited their services together and jointly sponsor a charity golf tournament.

The president of Quality Care, Gene Gunderson, declined to be interviewed and the company did not respond to written questions.

Data collected by Florida insurers who handle workers’ compensation claims shows that Quality Care supplies about 40 percent of the drugs sold by doctors in the state, a marketshare three times as high as that of its closest competitor.

Robert M. Mernick, the president of Bryant Ranch Prepack, a company in North Hollywood, Calif., that repackages medications for office sale, said he found it extraordinary that lawmakers in other states like Florida and Maryland were allowing such drug markups to continue. “I see it as corruption,” he said. “I think it is horrible.”

In 2010, Abry Partners, a private equity firm in Boston, bought a stake in Automated HealthCare for $85 million. Officials of Abry also declined to be interviewed for this article.

That same year, Florida lawmakers tried to clamp down on how much doctors could charge for drugs. Automated HealthCare responded with a major lobbying and spending campaign, focusing its efforts on state leaders like the president of the Florida senate, Mike Haridopolos.

When the bill was reintroduced this year, Mr. Haridopolos declined to allow a vote. The state’s insurance commissioner had backed the move, saying it would annually save firms and taxpayers $62 million, a figure disputed by Automated HealthCare.

Mr. Haridopolos said he didn’t believe the bill had a chance of winning. “It seemed like a big political food fight,” he said.

Mr. Hays, the legislator who introduced the measure, said he found that hard to believe. “The strategy of the people that were opposed to this bill was to put the right amount of dollars in the right hands and get the bill blocked,” he said. “And they were successful in doing that.”

This story, "Insurers Pay Big Markups as Doctors Dispense Drugs," originally appeared in The New York Times.

In 2010 the average med onc made $360K on oncology drug markups.

http://jop.ascopubs.org/site/er/JOP000402.pdf

The Cancer “Breakthroughs” that Cost Too Much and Do Too Little

http://www.thedailybeast.com/newswee...oo-little.html

[gdpawel]

John L. Marshall, M.D.
For Medscape Oncology

I have been hearing a lot about the shift from buy-and-bill to having different outcomes and metrics. Our entire system of medical oncology, whether it is in private practice or hospital-based, has been founded on drug sales. That has been our procedure or our angle, if you will, to make some money to fund our practices, hire our staff, and so on. Of course, there is a real issue that this is going to go away. As the margin has decreased on buy-and-bill, we are certainly scrambling to look for other ways to run our practices.

Another element is that we are going to stop being judged or incentivized based on consumerism. We are going to shift over to something called outcomes. How are we doing? How are our patients doing? And by whose standards are we going to measure this? Am I going to be judged the same way that you guys are going to be judged? I only see gastrointestinal cancers, but I tend to see very sick patients, so my overall outcomes are terrible, right? Many of my patients die because they are in bad shape. They come to see us for new or different approaches, so I don't often see the "easy" patients with early-stage disease. Therefore, maybe my outcomes are going to be worse. Maybe my consumption is going to be higher and I am therefore going to be judged differently, maybe more harshly than others. How are we going to do this outcomes measure?

Clearly, we are going to need electronic medical records. We are going to need to benchmark our performances against others that are out there. We work in a pretty big institution here, with some decent infrastructure support. How would you do this in a 2- or 3-person practice?

On the other side, we are seeing a ton of increased pressure to have private practices be bought by institutions or merge into institutions and become employed. This is just one more angle to the pressure of getting people to become employed: You are going to need outcomes measures. Can you do that in your own practice? How will you do that under a private practice model?

Here in the Washington, DC, area, there is pressure for more and more oncologists to be employed. Fewer and fewer private practices are out there, and the only ones standing, frankly, are either the very weakest ones or the very strongest ones that have been able to manage this transition. I am not sure what it is going to look like, but I do understand that the pressure is out there as our financial model is shifting, as our outcomes and our incentives are shifting.

[gdpawel]

An article appearing in the April 12, 2012 edition of Health Affairs is challenging health care systems to reconsider the way cancer care is paid for and the model used to reward oncologists.

The article, "Changing Physician Incentives for Cancer Care to Reward Better Patient Outcomes Instead of Use of More Costly Drugs," was written by Lee N. Newcomer, M.D., senior vice president of oncology services at UnitedHealthcare.

Notably, Newcomer blasts the current "Buy and Bill" approach to cancer care, in which oncologists are encouraged to use expensive drugs for patients despite the existence of cheaper drugs with similar outcomes, because of the increasing profits made by doctors administering these drugs in their practices. They buy them wholesale from the manufacturer and then charge insurance companies for the drugs plus an added charge, known colloquially as the 'chemotherapy concession.' This is such a blatant conflict of interest it should scandalize the industry, yet it has barely made a ripple.

Newcomer's suggested payment strategies include:

--Clinical Pathways approach: This strategy would require oncologists to treat patients with predefined chemotherapy regimens. While there is some room to accommodate individualized care, oncologists would find incentives in complying with the predefined standards of care.

-- Bundled payment approach. This approach bucks the fee-for-service model that rewards volume and ignores outcomes. Instead, an entire cancer treatment program would be determined prior to dispensing therapy, and regardless of whether or not treatment plans needed altering, the cost would be the same. This way, oncologists would receive the same fee no matter what drugs are dispensed, which eliminates the conflict of interest.

Medicare will be launching a bundled payment pilot program in 2014.

Newcomer conlcudes, "A doctor's income needs to be independent of drug selection. This is better for doctors, better for patients and better for the entire health care system."

Source: MarketWatch

['lizbeth]

Thank you for posting GDP.

[Jackie07]

The hospital/clinic I use has set up its own insurance company some years ago.

I did not choose their plan when I first moved to town 20+ years ago, thinking that the other plan offered by the City would give me more access as there were more hospitals available in the region under their plan.

Little did I know that those hospitals were all 2nd-rated... When my life-long brain tumor was finally discovered, my neurologist informed us that he would only recommend one particular neurosurgeon in 'that' hospital (not affiliated with my HMO) After some sleepless nights, we were able to get a special contract made and get the surgery/rehab done at the hospital that was not part of the 'Network'.

Naturally I switched to that hospital/insurance company the first opportunity I had.

Since then I've had 4 more surgeries including two for breast cancer that required adjuvant therapies. The hospital has more than doubled its size and we've never encountered any problem with our insurance.

For certain procedures that're not availble locally, the hosital sent us to other contracted facility (eg. my GKRS was done in the center affiliated with another big hospital almost 200 miles away.) From the invoice, we could see that medical bills are heavily 'discounted' between hospitals/insurance companies ...

I've encountered 'incompetent' doctors, but I've not encountered any unethical ones ...