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medpundit |
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Sunday, January 26, 2003Medicare, which does not cover most prescription drugs, does pay doctors about $6.5 billion a year for drugs they personally administer, largely cancer drugs. Under the current system of determining what the appropriate prices for these drugs are, the government is paying, by some estimates, more than $1 billion more than what the drugs actually cost. Many private insurers say they are also overpaying for these drugs. In some cases, patients make a much larger co-payment for the drug than a cancer doctor paid to buy it. Some patients paid about $150 out of pocket for Toposar, a cancer drug, for example, while doctors appear to have paid closer to $60 after various discounts from Pharmacia, the manufacturer, according to the Minnesota attorney general, who is suing Pharmacia, accusing it of pricing fraud. The General Accounting Office, which studied federal payments for cancer drugs in late 2001, discovered that doctors, on average, were able to get discounts as high as 86 percent on some drugs. Dr. Thomas Smith, an associate professor of oncology at the Medical College of Virginia Commonwealth University, has estimated oncologists in private practice typically make two-thirds of their revenue from the chemotherapy concession. Ah, but how much do oncologists get paid to administer the drugs? Most likely very little. Administering a chemotherapy drug is much different than adminstering, say, a Depo-Provera shot for contraception. Chemotherapy agents often take hours to adminster intravenously, and patients have to be watched closely for side effects. Most oncologists have nurses who are with the patients constantly as they receive their infusions. This sort of careful management doesn't come free of charge: But oncologists say they need the profits from the drugs to make up for high costs in the rest of their operations. They say they spend enormous sums to have the facilities and employees that enable patients to receive chemotherapy outside a hospital, under close supervision. ``It seems to be a wash right now,'' said Dr. Larry Norton, an oncologist at Memorial Sloan-Kettering Cancer Center in New York and a former president of the American Society of Clinical Oncology. He argues that oncologists treat patients who demand more care and therefore have higher expenses. ``We're just trying to break even,'' Norton said. What's happening here is that the third-party payer accountants are seeing a large expense on their spreadsheet for chemotherapy. Their natural instinct is to do everything they can to bring that expense down. They have no idea what's involved in the delivery of those drugs. But if they refuse to pay for them, or lower reimbursement for them to the point that oncologists can't afford to administer the drugs safely, then access to cancer treatment will suffer. UPDATE: The Times has more detail, including the revelation that oncologists' earnings have outstripped every other specialty since they've been dispensing their chemotherapy drugs. Makes me more suspicious about that "just breaking even" defense. posted by Sydney on 1/26/2003 08:39:00 AM 0 comments 0 Comments: |
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