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Old 03-15-2010, 05:50 PM
gdpawel gdpawel is offline
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Default A carer's view of the US Chemotherapy Concession

The shift in the United States, more than 20 years ago, from the institution-based, inpatient setting to community-based, ambulatory sites for treating the majority of the nation's cancer patients has prompted in large part additional costs to the government and Medicare beneficiaries. The Chemotherapy Concession gave oncologists the financial incentive to select certain forms of chemotherapy over others because they receive higher reimbursement. This was first brought to attention at a Medicare Coverage Advisory Committee meeting in 1999, in Baltimore, Maryland (1).

Typically, doctors give patients prescriptions for drugs that are then filled at pharmacies. But medical oncologists bought chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administered them intravenously to patients in their offices.

Not only do the medical oncologists have complete logistical, administrative, marketing and financial control of the process, they also control the knowledge of the process. The result is that the medical oncologist selects the product, selects the vendor, decides the markup, conceals details of the transaction to the degree they wish, and delivers the product on their own terms including time, place and modality.

A joint Michigan/Harvard study confirmed that before the new Medicare reform, medical oncologists are more likely to choose cancer drugs that earn them more money (2). A "Patterns of Care" survey showed results that the Medicare reforms have not solved the problem of variations in oncology practice (3).

A patient wants a physician's decision to be based on experience, clinical information, new basic science insights and the like, not on how much money the doctor gets to keep. A patient should know if there are any financial incentives at work in determining what cancer drugs are being prescribed.

I would imagine that some are influenced by the whole state of affairs, possibly without even entirely admitting it. Social science research shows that people can be biased by self-interest without being aware of it. There are so many ways for humans to rationalize their behavior (4).

The U.S. government wasn't reducing payment for cancer care under the new Medicare Modernization Act (MMA) of 2003. They were simply reducing overpayment for chemotherapy drugs, and paying cancer specialists the same as other physicians. The government can't afford to overpay for drugs, in an era where all these new drugs are being introduced, which are fantastically expensive (5).

Although the new Medicare bill tried to curtail the Chemotherapy Concession, private insurers still go along with it. What needs to be done is to remove the profit incentive from the choice of drug treatments. Medical oncologists should be taken out of the retail pharmacy business and force them to be doctors again (6).

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Gregory D. Pawelski

Last edited by gdpawel : 04-08-2012 at 11:16 PM. Reason: correct url address
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Old 03-15-2010, 10:42 PM
gdpawel gdpawel is offline
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Default A Very Open Letter from an Oncologist

A Medical Director at California Cancer Care, an oncology practice in Northern California wrote a candid letter to the Health Beat blog by Maggie Mahar. He is a member of The Century Foundation's Working Group on Medicare Reform. A very experienced and successful oncologist who has served on the board of the American Society of Clinical Oncology and the Association of Northern California Oncologists.

Dear Maggie Mahar:

I have been working on this since you asked me some questions about our practice. Maybe it is more than you asked for, but I thought that I’d put my answers in context. Just the other day Stanford University’s Alain Enthoven wrote on the Opinion Page of the New York Times that we docs ought to be salaried. Though for 30 years I have practiced fee-for-service medicine, had a wonderful career and lived comfortably, I cannot argue! The waste associated with the inherent conflicts of interest in fee-for-service medicine is more than we can afford.

At the same time, the way reimbursement is set up, oncologists couldn’t stay in business if we were not paid fee-for-service for selling chemotherapy drugs and services. Some estimate that up to 70% of our earnings come from the sale of chemo drugs.

Maggie, as you know, oncologists are not paid to collaborate with their patients or with other doctors. Listening to patients and chatting with them, asking other docs about a patient, going to conferences, e-mailing experts about problems and looking up stuff in a book (old way) or the net (new way) are not billable events.

Neither is sitting for half an hour at lunchtime with our nurses, medical assistants, research director and the other docs in our office to go over tomorrow’s patients, field questions about problems patients have called in, and converse about problems a patient is having. Can you imagine what this daily meeting costs in terms of salary? Can you imagine why others don’t do this? Oncology is a team sport and there is evidence that collaborative practice—not only with the patient and her family, but with other docs who are caring for her as well as smart others who bring different areas of expertise to the table, can provide better care.

Do you want to go to a doc and be treated according to his treatment plan after an hour-long visit? Or would you rather that he present your case, along with the pathology slides and the imaging studies, to a group of other docs representing a number of disciplines (medical, surgical and radiation oncology, diagnostic radiology, pathology, nursing, social work, dietetics, pain control, pulmonary, gastroenterology, etc.) to be viewed and discussed?

Smart docs are not afraid to consult with the smarter (or more experienced) docs at the university and even send patients there to get their treatment if the care is complicated and not well–known to us. But there are plenty of docs who, for one reason or another, choose not to refer their patients to another institution. Of course there are plenty of patients who would rather get their care closer to home, but as a recent article in PLOS pointed out, the doctor has an obligation to inform the patient that he might well get better care elsewhere.

We also are not paid to remember your name. Our office has a large staff because we try to serve the folks we care for. As a result, we have two nurse practitioners, one research person, and six clinical folks assisting our six doctors. Our 8 nurses and nurse practitioners plus 16 full-time staff members (medical records, front office receptionists, clerks, insurance specialists, patient care coordinator, and a CEO earn a total of $125,000 a month.

At one of our yearly retreats, we had Rachel Ramen, the author and friend of our practice, talk to us about service. We learned about the notion that one needs to find out where our patient is and start there. Our care of a patient begins before we even meet them in person. Before the appointment, Thomas, our new patient coordinator, spends 20 to 30 minutes chatting with the prospective patient on the phone obtaining all kinds of information, orienting her to our practice and explaining what to expect. It is not unusual for a new patient to ask me to meet Thomas at her first visit to thank him for his kindness.

Our front office ladies—there are 4 of them; one answers the phone, the other 3 greet and check out patients—know the name of each patient and their family members. They give each person a big hello when they arrive. This might seem silly, but almost every day a patient or family member tells me how great our front office staff is. I recently read an article that talked about how important it is to, not only honor a patient’s informed wish for treatment, but to respect her as a person. Patients really don’t want to be numbers.

After a patient is seen by the doc—we do the initial consultation-- the Nurse-Practioners see folks in follow-up. And there begins a relationship between the patient and our office staff that is as intimate and as close as you can imagine. With anxiety being appropriately and understandable high, patients have all kinds of questions and concerns that we can’t and haven’t anticipated.

Our medical assistants spend literally the entire day on the phone solving problems. Our small hospital census—5.2 patients a day—is a result of our following through on patient concerns and seeing them in the office before problems become ones that can only be solved in the ER or hospital. We often use the office as an emergency room, but much more conveniently for our patients and at a much lower price.

It is certainly possible that we are not as efficient as we could be. Our patients receive very speedy responses to their needs. It is possible that the system just cannot accommodate the level of care that we provide at the current cost.

I should point out that the only folks who can really generate revenue are the physicians, nurse practitioners, and the nurses who provide chemotherapy. Folks in the front office, our medical assistants and the hoard of employees who also “care” for our patient’s cannot bill for the services they provide. Neither can I bill for innumerable phone calls and tasks I perform at my desk, when I am not sitting face to face with a patient. Similarly, e-mails to other docs asking for advice or coordinating care among other disciplines go unpaid.

The reason oncologists have been able to grow a practice as large as ours and provide the level of service we do is because of the revenue we obtain from selling chemotherapy drugs and services.

Meanwhile, the Medicare fee schedule that reimburses us for the drugs themselves has been cut. We are paid just 6% over the actual sale price (ASP.) And since we are not a 1,200 doctor practice like US Oncology, we do not get the discounts or rebates that they receive from drugmakers. In our case, sometimes the Medicare reimbursement is actually less than what we have to pay for the drug. For instance, we actually lose about $200 every time we give a shot of Neulasta, a drug to increase white blood count and prevent infection in patients receiving chemotherapy.

But we are paid more for administering the drugs than we were in the past, so it makes economic sense to administer them more often. Not every doctor is willing to do that. The practices that shows some restraint and don’t treat everyone who walks through the door with chemo are the ones that are suffering.

The truth is that there is no clearly effective chemotherapy for a distressing number of malignances. In those cases, if I find that first line therapy isn’t working, I won’t automatically offer a second type of chemo. Instead, assuming the patient wants a frank appraisal of her condition, I’ll explain the realistic goals and options available. In my experience, and in the community in which I live, patients seem to want to know as much as they can about their illness, even if the news is bad. Delivering terrible news is difficult, time-consuming and extraordinarily painful for all involved. But good decisions depend upon an honest and forthright discussion and providing the patient with the information and tools to make decisions.

I have told patients, “I know that I can make you sick, but I am not certain that I can make you better! . . . In the foreshortened time that you have left, you need to think about what you want to do. Do you want to spend that time in this office, with me and my staff, or is there someplace else you would like to be, something else that you would like to do?”

It has taken me a while to sort out how I feel about the drugs we use. I began practicing in the late 1970s, and I remember the increasing role and influence of chemotherapy. As more drugs became available, with more evidence that they were effective, our optimism increased --and use increased as well.

It became clear to many physicians—consciously or not--that selling chemotherapy was really the business they ought to be in as we were compensated so very well for it. The time one spent with patients was not compensated nearly as well. This is not unlike the rewards bestowed upon those who perform operations (at least historically), pass tubes into orifices (GI) or make holes for tubes (cardiology & orthopedics), purchase and use their own imaging machines etc.
Gregory D. Pawelski
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Old 03-15-2010, 10:44 PM
gdpawel gdpawel is offline
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Default A Very Open Letter from an Oncologist (cont'd)

When doctors are paid to “do more” there is always the potential for conflict of interest. Keep in mind that physicians are human beings with the same kinds of responses to financial incentives as everyone else. Despite our training and promise to put our patient’s interest first, we succumb to incentives that often come in the form of more revenue.

As time went on and science grew, we became increasingly more successful in providing chemotherapy that actually worked, and it was a lot easier for doctors to sell chemotherapy than it was for them to spend the kind of time necessary to give patients choices.

Keep in mind that in the late ‘70s and ‘80s there was not much discussion about “shared decision-making.” If a patient had cancer, and we knew that tumors responded to a certain chemotherapy regimen by shrinking, physicians assumed that patients would choose to take it, if it was offered to them. “You have cancer, you need chemo,” seemed to be the mantra.

It was not until much more recently that the notion of quality of life, and the fact that just because we shrunk a tumor doesn’t mean that people will actually live longer, was clear to us.

Nevertheless by the mid 1980s it occurred to me that selling chemotherapy was not a sustainable business plan. I thought that insurers would figure out that margins on drugs were too high and cut reimbursement. With that in mind, in 1990, I established the Association of Northern California Oncologists (ANCO).

I hoped that ANCO could rally docs around the idea of evidence-based medicine and take our science and good results to the insurers, who, seeing the wisdom of our arguments, would reward us for being so scientific, thoughtful and restrained. Boy, was I naïve! It seemed that docs so valued their independence—and made so much money -- that they would not rally around anything.

In the late 1980s, I went to a Clinical Practice Committee Meeting of our professional society and asked them to consider establishing guidelines for treatment. At the time, I was consulting for Blue Shield of California and was impressed with the wide variation in treatments for similar conditions. I was told under no uncertain terms that my comments and recommendations weren’t welcome!

From the insurance side, there also wasn’t much interest in decreasing wide variations in how doctors treated similar malignancies. I suspect that insurance companies have an easier time making it more difficult for docs to get paid rather than investing in innovative ways to collaborate with physicians. Moreover, if insurers put time and money into researching the most effective treatments, those guidelines would become public—and would benefit competing insurers.

Ultimately, the job of insurance companies is to pay claims. My sense is that they either pay them or not, and holding up payment is what they know how to do. It would have been nice both for insurers and physicains to agree on treatment pathways, but it didn't happen.

Some years later, in the mid ‘90s, I sponsored a meeting of 50 N.California oncologists for a weekend. We had speakers representing folks doing quality studies and electronic medical records and the insurance industry, but no docs really waned to compromise, merge practices and establish standard treatment plans.

Why is there so much variaion on how much treatent is given for similar conditoins?

If you ask doctors you’ll hear a variety of answers. Here goes:

Patient and family expectations. Sometimes, I hear docs say the equivalent to “the patient made me do it,” when justifying the administration of futile chemotherapy. But it is my experience that patients almost always want to be told the truth about their illness and its treatment and prognosis. Patients want to be offered reasonable and realistic options for treatment and they rarely choose treatments with a very small chance of success.

Societal expectations. We expect that we can smoke 2 packs a day for 30 years and the doc will fix it. And when, through no fault of their own, people develop cancer, many feel certain that it must be curable. Maybe too much of Dr. Kildare and Welby. We just aren’t as good as they are!

The doctor’s ideal as healer. After all, why did I go to med school if not to fix people? In fact, my earliest memories of contemplating medicine come from the 1950s when I was single digit years old. I remember thinking that there is nothing medical people wouldn’t do or spend to help a sick person! I really did think that! Stuff was cheaper then, and we didn’t have as many choices of treatment! There is lots of hype about new treatments. I can remember as a young oncologist, scouring the ASCO abstracts for a new treatment for an illness and being excited about a marginally better drug. Perhaps it is time and age that has made me more cynical, as many of the supposedly “better” treatments just did not turn out to be more effective

Don’t “take away hope!” The lamest of reasons for treating someone—especially with medicines that make them sick! Hope exists in many forms and skillful medical folks with time to spend with their patient can present alternatives other than:

§ “Take chemo = keep up hope,” or

§ “No chemo = no hope!”

I prefer to re-frame the discussion around realistic expectations and discuss what it is that the patient is hoping for. Everyone agrees that living forever is not realistic. And talking about quality of life as opposed to quantity of life gets some traction these days, as patients and families understand Q of L better.

So, assuming the patient is open to such a discussion, I can then promise to be aggressive in controlling pain and in managing other symptoms. In the meantime, I will encourage my patient to live each day to the fullest--striving to live as well as possible rather than as long as possible.

However, rationing chemotherapy is not an issue. If, after being carefully taught that treatment is not very effective and has nasty side effects, a patient wishes to proceed with chemotherapy, I will provide it for her.

Real, (but sometimes small) chance of success. We do have data on many clinical situations; for example we have evidence of the benefit of first line chemo in advanced non-small cell lung cancer. We know that median survival increases by a couple months. We know that, with treatment, the chance of living a year increases from 15% - 20% to 30% - 40%.
Gregory D. Pawelski
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Old 03-15-2010, 10:45 PM
gdpawel gdpawel is offline
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Default A Very Open Letter from an Oncologist (cont'd)

But it is difficult to explain some of this material, especially to folks with poor math skills, and it is time-consuming, as well.

So rather than making it clear that the average patient lives only a couple of month longer—and that the chances of surviving for a year are less than 50/50, it is much easier to say, “Yes, you do have a tough disease, but I think we can help you, so let’s start treatment tomorrow!”

Of course, treating Hodgkin’s or another curable disease is something else. But most of the cancers we treat with chemo are not curable. Doctors need to be paid for the time it takes to explain the potential benefits as well as the downside of chemo—so that the patient can make a decision about how he wants to spend the time he has left.

Financial inducements. This is a really tough item to discuss, let alone prove. Most of us truly believe that we are doing good and that doing well comes with it. But, I have heard docs say the most incriminating things and do things that are clearly in their own best financial interest. For example, I have heard doctors talk about:

Treating patients with a 2 hour infusion of pamidronate (a generic drug used to treat cancer that has spread to the bone) rather than a 15 minute infusion of Zometa, because one could make $500 more on the generic pamidronate. Many physicians rationalized the use of the more profitable, but longer infusion drug on the basis that, “we have a business to run;” “we’d lose $40,000 a month;” “if we don’t do this we will have to close our doors;” and “my patients are mostly Medicare and they don’t mind hanging around the office for a longer infusion - - in fact they are really very fond of our staff and like spending time with them.” A small study of 184 patients who were randomly assigned to a two hour infusion or a 15 minute infusion revealed that 92% preferred the shorter infusion. (Chern, et al, Supportive Care Cancer, 2004)

A physician leader of a drug purchasing group suggested that one might reasonably evaluate regimens to maximize reimbursement. For instance, for stage IV non-small cell lung cancer, he suggested using cisplatin and etoposide (given on days 1, 2 and 3 of a three week course) rather than carboplatin and Taxol (given once every three weeks). He argued that there was data to support the use of cisplatin as a better agent than carboplatin and pointed out that Carboplatin’s use was the result of aggressive Bristol-Myers Squibb marketing. In addition, he noted, using cisplatin and etoposide took advantage of the increase in administration fees since patients would have to come 3 days rather than one day in a three week period.

When reminbursement for Gemzar and Taxotere was less than cost, it was reported that some practices took these meds off their shelves until Medicare increased payment. When I asked one doc how he would treat bladder cancer without Gemzar, he said, “I’ll use Taxol, it’s almost as good!”

Amgen “bundled” Aranesp and Neulasta, tying rebates for the white cell-increasing drug, Neulasta to a practice’s use of the red cell-increasing drug, Aranesp. For instance, if a practice used less than 65% of its erythropoietin as Aranesp, it would lose its Neulasta rebate. A loss of this rebate resulted in the practice’s purchase of Neulasta at $209 more than Medicare pays. Therefore, if the practice does not buy more than 65% of its erythropoietin from Amgen, it must come up with $209 out of its own pocket to supplement the purchase of Neulasta for its patients. Amgen capitalized on its perception that physicians will buy products that maximize their reimbursement. This was easier than trying to sell its products based on solid clinical superiority.

Sometime ago, we received an e-mail from our “Leukine Sales Consultant” at Berlex who pointed out that if we “move all CSF (colony stimulating factors = meds which increase blood counts) to Leukine” we would “save” $430,000. While Leukine , like other CSFs, does increase the white count it is not FDA-approved for use with most chemotherapy regimens and clinical trials have not been done to show its equivalence or superiority to rival drugs.

Maggie, it is my understanding that patients expect physicians to make recommendations based on what it is best for the patient, not what is financially best for the physician. It is my contention that patients suffering from cancer would be appalled to understand that they could have received a 15 minute infusion rather than the two hour infusion but for the fact that the physician made $500 more per infusion.

I have been trying and trying to find a rationale to support the style of medicine with which I am familiar. Unfortunately, I think that the incentives are so mis-aligned and the temptations are so great that docs have a tough time making the right decisions. Look at the increase in diagnostic imaging in those practices that have purchased diagnostic imaging machines. “We have to feed the beast,” I have heard.

My simple-minded solution is to re-align incentives so that the docs are paid for doing the right thing. What the right thing is, of course, can be open to interpretation. What patients think is right may be different from what the payer thinks is right. That gives me a headache!

But clearly, we need guidelines for the most effective care – and patients need to know whether their doctors are following the guidelines. Medicare needs to jump on the quality band wagon and support docs’ use of quality programs such as ASCO’s Quality Oncology Practice Initiative (QOPI), a voluntary program that serves to encourage oncologists to examine their practice and to compare themselves to others. Currently, over 1,500 physicians in more than 400 practice sites are registered and the American Board of Internal Medicine considers QOPI to fulfill an oncologist’s requirement for quality improvement in his recertification.

Patients also need to understand that as long as Medicare pays fee-for-service there is a potential for conflict of interest. But patients really do not want to hear about doctors’ incentives. An article in Health Affairs in 2000 (Miller and Horowitz) showed that:

1. Many patients are unaware of the financial incentives their own physicians face. Only about half of the respondents wanted information about the incentives.

2. Trust in physicians is high; 84% of patients completely or mostly trusted their physician to put patients’ interests first.

3. “Many patients stated that the information was not relevant to them because they trusted their physician. In fact, some stated that they would not want the information because it would raise unwelcome doubts.”

4. “Patients also expressed confidence that they could judge the quality of their care and could change physicians if they were not satisfied.”

5. “Many patients stated that they would want to learn if the incentives imposed any cost on them.”

6. “In general, patients expressed strong reluctance to raise the issue [of incentives] with their physicians for a variety of reasons, including fear of embarrassing or angering the physician; belief that the topic is too “personal” and “intrusive” to raise; perceived irrelevance to treatment; and desire not to take valuable time away from clinical matters.”

I have a real problem in placing the burden of figuring out whether a doc is looking out for a patient’s best interest on an ill, frightened and anxious patient. As professionals, we have a sacred responsibility to put patients’ interests first.

Ultimately, Medicare may want to reduce the fees it pays “outlier” doctors, reducing the incentive to over-treat. Meanwhile, Medicare needs to pay doctors for the time it takes to really explain the pros and cons of treatment to their patients in depth-- so that patients can make an informed choice—and not just give informed consent.

Dr. Peter Eisenberg

Medical Director

California Cancer Care
Gregory D. Pawelski
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Old 01-23-2011, 11:40 PM
gdpawel gdpawel is offline
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Default Prove that Community Oncologists Put Patients Before Profits

The Health Affairs article (1), given play in The New York Times (2), showed that the prescribing behaviors of oncologists caring for Medicare patients between 1995 and 1998 were influenced by the lucrative economics and their drug retailing arrangements. The study's investigative team was comprised of prominent researchers, including a Dana-Farber oncologist. When interviewed, the investigators were emphatic that the study found strong links between oncologists' financial interests and their clinical decisions.

And while the Harvard/Michigan study published in Health Affairs showed results before the new Medicare reform, the Patterns of Care study showed results that the Medicare reforms are still not working (3).

Few healthcare professionals outside the oncology community were surprised. It is common knowledge that most oncologists integrate drug revenues into their practices to bolster their incomes.

The apparent importance of the findings notwithstanding, the Community Oncology Alliance (COA) flatly rejected the news (4). COA released an e-mail bulletin, "The Remarkable Story of Community Oncology," just after the articles broke. The opening sentence called the study's findings "incredibly outrageous and unsubstantiated" and "an unbelievable rehash." Sentence two referred to "incomprehensible statements by government bureaucrats, so-called oncology advocates, well-paid consultants, non-practicing physicians, payers, and specialty pharmacies." In other words, COA cast aside the study, presumably because critics cannot appreciate oncology's complexities and because they are almost certainly misguided or harbor malevolent intent.

Not Acceptable

There are many reasons why this kind of reaction is unacceptable, but the most obvious is that there appears to be a real problem here. The study's investigators are reputable, the journal is credible, and the findings are damning. True, the data were as much as a decade old and from Medicare patients only, but the practice in question - oncologists' prescribing decisions being altered to optimize drug revenues - is still widespread. There is little reason to believe that another analysis with updated data would obtain a different result.

But COA protested too much. It refused to admit that the practice represents a potential conflict. It claimed that community oncologists provide the "highest quality care" but failed to offer data in support of that statement. Ultimately, it avoided the issue entirely, deflecting attention to other, more praiseworthy aspects of oncology practice. And it ridiculed the credibility of the professionals who broached the issue.

To the non-oncologist, such a dismissive response is viewed as self-serving and protectionist. It demeans oncologists' important work and confirms critics' suspicions that an unsavory but hidden practice is ongoing. But worse, it suggests a higher regard for financially rewarding drug arrangements that for patient quality of care. An appropriate response might have soberly acknowledged the findings. It would have then refuted those findings with other data, or committed to addressing the issue.

Getting Serious

There are serious issues that demand serious responses. The American health system is rapidly approaching wholesale collapse due to exploding costs, in large measure because a lack of transparency has created a culture of opportunism and waste exploited by groups throughout the continuum of supply, care, and finance. The Health Affairs article suggest that community oncology is squarely part of the problem.

In the interests of transparency and the reputations of its practitioners, community oncologists should immediately develop a response to the concerns raised by the article. You should release data on:

- the prevalence of the practice of oncologists profiting from the drugs they prescribe;
- the markups involved, and how those revenues translate to income;
- oncologists' adherence rates to evidence-based chemotherapy guidelines; and
- differences in the practice patterns of oncologists who do and do not financially benefit from the drugs they prescribe.

You should follow this information with proposed guidelines to resolve potential conflicts between clinical practice and financial incentives.

Providing Leadership

More than any group, physicians lay claim to a higher purpose and so must also provide the leadership that can help reestablish trust in our doctors and a more effective healthcare system. Community oncologists can and should provide that leadership.

You could advocate for and implement pricing transparency in oncology drug treatment. As Jerry Reeves, MD, urged in a recent interview (5), the charges to patients and other payers should be transparent and open, not hidden. And conflicts of interest should be avoided.

Of course, oncologists should be paid fairly for the services they provide. Continuing to work with Medicare and private payers, you should aim to transition practices away from indirect drug revenues and replace those with higher direct fees for professional services.

As Dawn Holcomb (6) and Linda Bosserman (7) argued last year in this journal, you could lead an effort to develop data on clinical outcomes and cost that can drive future practice and policy change. You could accelerate positive change within your profession by encouraging incentives for patients to choose doctors who have demonstrated care that is safer, more effective, and more efficient.

Anything less will be merely protecting the interests of oncologists over the interests of patients.


(1) Jacobson M, O'Malley AJ, Earle CC, Pakes J, Gaccione P, Newhouse JP. Does reimbursement influence chemotherapy treatment for cancer patients? Health Affairs 2005;25:437-443.
(2) Abelson R. Pay method said to sway drug choices of oncologists. The New Your Times March 16, 2006.
(3) Patterns of Care, Volume 2, Issue 1, 2005
(4) Community Oncology Alliance. The remarkable story of community oncology [news-letter].March 16, 2006.
(5) Klepper B. The new focus on accountability [interview with Jerry Reeves, MD]. Commun Oncol 2006;3:241-243.
(6) Holcomb DG. Is oncology compatible with specialty pharmacy? Commun Oncol 2005;2:173-181.
(7) Bosserman L. Specialty pharmacy and MVI:ill-advised systems, wasteful, and harmful [editor's note]. Commun Oncol 2005;2:178-180.

Community Oncology Vol 3/Num 7: Having Your Say July 2006
Center for Practical Health Reform
Gregory D. Pawelski

Last edited by gdpawel : 03-26-2011 at 01:34 PM. Reason: revise
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Old 07-12-2012, 01:52 PM
gdpawel gdpawel is offline
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Default You thought being in a Retail Pharmacy business was only for Medical Oncologists

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.


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

Gregory D. Pawelski

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Old 12-27-2012, 10:35 AM
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Default Medical Oncologists' Perceptions of Financial Incentives in Cancer Care

Medical Oncologists' Perceptions of Financial Incentives in Cancer Care

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]



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.


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.


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).


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


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.
Gregory D. Pawelski

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Old 12-26-2013, 10:37 PM
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Default Community Oncology Practice Threatened by Medicare Cuts?

Another round of Medicare cuts are slated to affect cancer care and, if implemented, could be devastating to community-based oncology practices. The Centers for Medicare & Medicaid Services (CMS) recently announced their Medicare fees for 2014, which include severe cuts to essential cancer care services.

The final rule that CMS will implement on January 1, 2014, will increase the costs of cancer care to Medicare, cancer patients, and taxpayers, according to the Community Oncology Alliance (COA). It will also affect access to care, especially for those living in rural areas.

A hidden payment cut in the rule pertains to chemotherapy administration and other drugs, Ted Okon, executive director of COA, told Medscape Medical News. "CMS will decrease reimbursement to physician clinics in the community for the first hour of chemotherapy by 7.4%, without any cost-based rationale," he said. "There is also an additional 2% cut by the Medicare sequester."

Subsequent hours of chemotherapy will be cut 9.2%, but at the same time, CMS will increase payment for the first hour of chemotherapy administration to hospital outpatient departments by 29.9%. These hidden costs, Okon explained, which are in addition to the CMS decision to apply the sequester payment to the underlying cost of chemotherapy and other cancer drugs, will accelerate closures of clinics and force cancer patients to receive care in the outpatient hospital setting.

Higher Costs and Clinics Closing

As previously reported by Medscape Medical News, there has been a 20% increase in clinic closings and in consolidation into hospitals since April 2012. Of the 1338 clinics and oncology practices that the COA has followed-up for the past 6 years, 43 have begun sending patients to be treated elsewhere, 288 clinics have closed, and 407 oncology practices are struggling financially. In addition, 131 oncology practices have merged with or been acquired by a corporate entity.

In a report commissioned by COA, ION Solutions, and the US Oncology Network, the analysis found that clinics administered 87% of the chemotherapy given in 2005. At the end of 2011, that number had dropped to 67%.

"I have lived through CMS implementing a series of destructive Medicare reimbursement cuts to cancer care over this time, but I have never seen what I am witnessing now: An obvious, concerted move towards destroying private practice medicine, forcing all medical care into hospitals, and further consolidating hospitals into large corporate health systems," commented COA President Mark Thompson, MD, in a statement.

"The trend to hospital-based cancer care and the increasing higher cost of that care is clearly documented by several national studies," said Dr. Thompson, who is an oncologist at the Mark H. Zangmeister Center in Columbus, Ohio. "It is ironic that CMS is pursuing a course of action that is exactly the opposite of the intent of health care reform."

The consolidation of cancer care is having a "profound effect" on both Medicare and older patient, the COA notes. They point out that a study by the actuarial firm Milliman found that Medicare pays $6500 more per beneficiary annualized when chemotherapy is given in outpatient hospital facilities compared with community cancer clinics. In addition, the out-of-pocket cost to the patient is about $650 higher.

Another study that was conducted by the Moran Company indicated that Medicare cancer patients receive more chemotherapy treatments with more expensive chemotherapy drugs when given in hospitals, as opposed to community oncology clinics. As a result, chemotherapy costs can be as much as 47% higher.

In a December 10, 2013, letter to CMS, the COA writes that other data show that in the 3-year period from 2009 through 2011, "the volume weighted payment differential for chemotherapy administration was 19-38% higher" in the hospital outpatient setting than in community clinics.

They add that from 2005 through 2011, Medicare payments for chemotherapy administration services delivered in the hospital outpatient settings have increased by more than 200%, but at the same time, payments for these same services delivered by community clinics decreased by 15%.

To add salt to the wound, Okon pointed out that many oncologists are also being hard hit by insurers cutting them out of the new insurance exchanges and Medicare Advantage networks, which recently happened to 170 providers in Florida.

Citation: Community Oncology Practice Threatened by New Medicare Cuts. Medscape. Dec 26, 2013.
Gregory D. Pawelski
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Default Pharma Money Reaches Guideline Writers, Patient Groups, Even Oncologists on Twitter

Charles Ornstein
January 17, 2017

A series of studies published today documents the vast conflicts of interest in medicine. The way we think about disease “is being subtly distorted” by financial ties, the authors of an editorial write.

The long arm of the pharmaceutical industry continues to pervade practically every area of medicine, reaching those who write guidelines that shape doctors’ practices, patient advocacy organizations, letter writers to the Centers for Disease Control and Prevention, and even oncologists on Twitter, according to a series of papers on money and influence published today in JAMA Internal Medicine.

The findings of the papers provide further evidence showing how conflicts of interest help shape health care, a subject ProPublica has explored through its Dollars for Docs series since 2010. (Check whether your physician receives money from drug or device companies)


“The very way we all think about disease — and the best ways to research, define, prevent, and treat it — is being subtly distorted because so many of the ostensibly independent players, including patient advocacy groups, are largely singing tunes acceptable to companies seeking to maximize markets for drugs and devices,” researchers Ray Moynihan and Lisa Bero wrote in an accompanying commentary.


The papers published in the journal cover a variety of issues:

More than two-thirds of patient advocacy organizations that responded to a survey indicated that they had received industry funding in their last fiscal year. For most, the money represented a small share of their budget. But 12 percent said they received more than half of their money from industry.


Most organizations reported having a conflict-of-interest policy, but a much smaller percent said that their groups had policies for public disclosure of those relationships. Fewer than 8 percent of respondents said their group “perceived pressure to conform its positions to the interests of corporate donors or partners” and nearly 14 percent said their group had declined a contribution because of concerns about conflicts of interest.

“Although the amounts and proportions of financial support from industry are modest, the pervasive nature of industry support suggests the need for robust public debate about how to ensure that [these groups] serve the interests of their constituencies,” the authors affiliated with the Cleveland Clinic and other academic medical centers wrote. It called for greater transparency of funding sources by the groups.

Organizations that received funding from opioid manufacturers were less supportive of guidelines proposed by the CDC to limit prescribing of the drugs for chronic pain. More than 150 organizations formally submitted comments after the proposed guidelines were released in February 2016, and 80 percent of them were supportive, though some had recommendations for changes.


Among the 45 groups that received money from opioid makers, though, the level of support was only 62 percent. And none of those groups disclosed their funding sources in their comments. (The CDC did not ask or require them to do so.)

“More people are dying than ever before from these products and it’s important to know how the market is shaped by the spending of drug companies,” G. Caleb Alexander, co-director of the Center for Drug Safety and Effectiveness at Johns Hopkins University, said in an interview.

Two committees that developed guidelines for the management of high cholesterol and hepatitis C did not fully comply with standards set by the Institute of Medicine in 2011 to limit the number of industry-funded panelists. The Institute of Medicine required that fewer than half of guideline writers have commercial ties and that all chairs and co-chairs have no conflicts. But in both cases, at least one chairperson received money from industry and, in the case of the hepatitis C guidelines, a substantial majority of panelists also received money.


Moreover, the authors noted, when separate committees with no commercial conflicts developed guidelines for cholesterol and hepatitis C, the recommendations were more conservative and called for less expensive first line treatments.

Nearly 80 percent of U.S. hematologist-oncologists who use Twitter have financial conflicts of interest. The authors said their results raise questions about how conflicts should be disclosed and managed on social media. It recommended that, at minimum, physicians active on Twitter should disclose their industry funding in their biographies.


A preliminary analysis of tweets by these doctors, not yet published, has shown that “a sizable percentage are tweeting about drugs that they have specific ties to,” oncologist Vinay Prasad, one of the authors of the study and an assistant professor of medicine at Oregon Health & Science University, said in an interview. “Not a single one has disclosed so far, but we’ll find out.”

The pharmaceutical industry trade group, in a statement, defended the relationships between companies and other organizations.

“Industry engages with stakeholders across the health-care system to hear their perspectives and priorities,” said the statement by Pharmaceutical Research and Manufacturers of America. “We work with many organizations with which we have disagreements on public policy issues, including on prescription medicine costs, but believe engagement and dialogue are critical.

“While we cannot speak for particular organizations, we have heard from many patients who are concerned about the growing out-of-pocket cost burden when trying to access needed health-care services and treatments. In addition, there is broad recognition by the patient community of the significant unmet medical need that exists for many fighting devastating and debilitating diseases.”

Moynihan and Bero, the authors of the JAMA Internal Medicine commentary, wrote that their primary concern is that patient groups actually speak for patients. Recently, when Mylan came under widespread criticism for the price of its EpiPen, patient groups were largely silent.

“To ensure a healthier patient voice in medical research, education, policy and practice, sponsored groups that want to be seen as independent and credible need to decrease their industry sponsorship and ultimately disentangle, gaining in authority what they lose in resources,” they wrote.
Gregory D. Pawelski
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