Hospital Chain Said to Scheme to Inflate Bills

By Julie Creswell and Reed Abelson

The New York Times, January 23, 2014

Health Management Associates, a for-profit hospital chain based in Naples, Fla., kept tabs on an internal strategy that regulators and others say was intended to increase admissions, regardless of whether a patient needed hospital care, and pressure the doctors who worked at the hospital.

This month, the Justice Department said it had joined eight separate whistle-blower lawsuits against H.M.A. in six states. The lawsuits describe a wide-ranging strategy that is said to have relied on a mix of sophisticated software systems, financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid.

For H.M.A., the timing could not be worse. Shareholders recently approved the planned $7.6 billion acquisition of the company by Community Health Systems, which will create the nation’s second-largest for-profit hospital chain by revenue, with more than 200 facilities.

Federal regulators have multiple investigations into questionable hospital admissions, procedures and billings at many hospital systems, including the country’s largest, HCA. Community Health Systems, the Franklin, Tenn., company from which H.M.A. hired its former chief executive in 2008, faces similar accusations that it inappropriately increased admissions.

The practice of medicine is moving more rapidly than ever from decision-making by individual doctors toward control by corporate interests. The transformation is being fueled by the emergence of large hospital systems that include groups of physicians employed by hospitals and others, and new technologies that closely monitor care.

The last year has been particularly tumultuous for H.M.A., starting with the announced departure of Mr. Newsome (chief executive), a battle for control of the board with Glenview Capital Management, the hedge fund founded by Lawrence M. Robbins, and the announcement of the acquisition by Community Health Systems.

When H.M.A. announced the Justice Department’s involvement in the lawsuits, investors and analysts shrugged, and the stocks for both companies involved in the merger barely budged.

Sheryl R. Skolnick, who follows health care for CRT Capital, recently wrote in a note to investors, “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist for companies whose stocks typically soar when executives push the profit envelope. Only if the penalty is at least $500 million, Ms. Skolnick said, are corporations likely to find the cost a deterrent.

http://www.nytimes.com/2014/01/24/business/hospital-chain-said-to-scheme…

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A Giant Hospital Chain Is Blazing a Profit Trail

By Julie Creswell and Reed Abelson

The New York Times, August 14, 2012

During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived.

In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.

The big winners have been three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.

Among the secrets to HCA’s success: It figured out how to get more revenue from private insurance companies, patients and Medicare by billing much more aggressively for its services than ever before.

Many doctors interviewed at various HCA facilities said they had felt increased pressure to focus on profits under the private equity ownership. “Their profits are going through the roof, but, unfortunately, it’s occurring at the expense of patients,” said Dr. Abraham Awwad, a kidney specialist in St. Petersburg, Fla.

Some of HCA’s tactics are now under scrutiny by the Justice Department (2012).

http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-crea…

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PRLOG

October 7, 2013

An investigation on behalf of investors in shares of HCA Holdings Inc (NYSE:HCA) was announced concerning whether certain HCA Holdings officers and directors possibly breached their fiduciary duties in connection with certain statements.

http://www.prlog.org/12222266-hca-holdings-inc-nysehca-long-term-stockho…

What is the primary purpose of a hospital? Isn’t it to meet the health care needs of patients that require more care than can be readily provided outside of the hospital? Not according to the expanding for-profit hospital chains. It is to make as much money as possible for the investors, even if that means using patients as economic tools to enhance revenues.

This is not a new problem. In 2003, HCA paid the largest health care fraud settlement in U.S. history – $1.7 billion. http://www.justice.gov/opa/pr/2003/June/03_civ_386.htm

This is why the PNHP model of single payer reform includes not only publicly-administered and publicly-financed health care for everyone, it also includes a conversion of the for-profit health care delivery system to nonprofit.

We need a health care system whose sole mission is to take care of patients, not investors.

The Better Care, Lower Cost Act

Senator Ron Wyden

January 15, 2014

Medicare is not doing enough to take care of chronically ill patients, and the limitations of the fee-for-service system inhibit a needed focus on these patients and their needs. This is critically important because most Medicare enrollees suffer from multiple chronic conditions and account for almost all of its costs.

Our Solution:

The Wyden-Isakson-Paulsen-Welch Better Care, Lower Cost Act removes the barriers that prevent Medicare providers from building on existing successful delivery models, and provides a framework for encouraging innovative chronic care delivery across the country. Specifically, the bill:

Provides Critical Support for Providers

To support providers and plans wanting to actively engage and care for this population, this proposal: does not include any form of the attribution rule, encourages specialized team-based care with rewards for improving patient’s outcomes, uses telemedicine and knowledge networks to increase access in rural areas, and includes vital case management services proven to increase medical compliance.

Focuses on the Unique Needs of Medicare Enrollees

To help transition Medicare from a program that simply treats sickness to one that promotes wellness, this proposal identifies the patients most in need and provides them with better care before becoming the most acutely and persistently ill. To improve standards of care for Medicare enrollees, the bill provides for changes to medical school curricula in order to better respond to the evolving needs of the chronically ill.

Ends Geographic Disparities in Integrated Care

This proposal creates incentives for higher quality, lower cost Medicare coverage nationwide that is open to Medicare beneficiaries regardless of income or place of residence. With a “Better Care Plan” (BCP) designation, a state-licensed and certified provider may practice at the top of his/her license, removing barriers to care that currently exist in parts of the country with provider shortages.

Pays for a Medicare Program Taxpayers Want and Beneficiaries Need

In response to the need to move away from fee-for-service, this proposal makes BCP providers and plans fully responsible for the cost, care and outcomes of their enrolled patients, and directs CMS to determine spending based on the experience of similar patients that are not enrolled in a BCP.

http://www.wyden.senate.gov/chroniccare

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Wyden Plan May Be Vision For Future Medicare Reforms

By Mary Agnes Carey

Kaiser Health News, January 21, 2014

Sen. Ron Wyden, the Oregon Democrat widely expected to be the next Senate Finance Committee chairman, last week led a bipartisan group of lawmakers, health care experts and seniors’ advocates backing a plan to better coordinate care given to Medicare beneficiaries.

The proposal is part of the ongoing health policy conversation over shifting Medicare away from paying per service provided to paying for the quality of that care.

Health insurers and providers who want to specialize in chronic care would receive a set amount of money to care for patients and would be responsible for the cost, care and outcomes of their enrolled patients.

It’s unclear what happens next. Elements of the bill may be included in legislation to repeal and replace Medicare’s “sustainable growth rate,” the formula used to pay Medicare physicians.  Maybe the legislation will be attached to another bill or pass on its own. Even if it goes nowhere, it may well be the pathway to Congress finding consensus on Medicare changes in the future.

Reader response: Don McCanne

Before you come to any conclusions, read the actual bill. Google “S.1932 – Better Care, Lower Cost Act”

From the Act: “The qualified BCP (Better Care Program) shall be accountable for the quality, cost, and overall care of enrolled BCP eligible individuals and agree to be at financial risk for that enrolled population.”

Much of the rest of the legislation involves efforts to define the nature of the Better Care Program provider teams, the patient populations, their risks, and how to establish capitation rates that will reduce spending while increasing quality. Such efforts would be administratively intensive and not very effective.

Primary care already plays a very important role in providing chronic care. Our efforts would be better directed to reinforcing the primary care infrastructure. Fragmenting Medicare’s risk and shifting it to the providers might be therapeutic for the federal budget, but it places the providers in conflict with their patients over who will come out ahead – the exact opposite of what we want in our health care system.

http://capsules.kaiserhealthnews.org/index.php/2014/01/wyden-plan-may-be-vision-of-future-medicare-reforms/#more-25372

Comment:

By Don McCanne, M.D.

S.1932, the Better Care, Lower Cost Act, is important since the concept is being considered as an offset to the cancellation of the accrued deficits related to the sustainable growth rate (SGR), which is a flawed formula for adjusting Medicare payments. Congress has given itself a three month window to enact an SGR fix. This is apt to slip through as attention is directed to celebrating SGR relief while ignoring the actual SGR fix.

The bill can be accessed at congress.gov. It is somewhat complex, which is not a surprise since it empirically segregates chronic care patients and then sets up an administratively complex “Medicare Better Care Program” that “promotes accountability and better care management for chronically ill patient populations and coordinates items and services under parts A, B, and D, while encouraging investment in infrastructure and redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations.”

Although vague, the program seems to set up a variation of an accountable care organization, with bundling of services, while transferring financial risk to the providers so that they, in essence, also serve as the insurers. The wasteful administrative complexity and the perversity of the incentives alone should cause us to question this concept. As if caring for a patient with multiple chronic disorders wasn’t enough, we need yet additional government rules and bureaucratic oversight of an artificial chronic care construct that seems to be designed primarily to shift risk from the government to the providers?

We do need an improved Medicare that would serve all of us well as a single payer program, but this certainly isn’t it.

The Better Care, Lower Cost Act

Senator Ron Wyden

January 15, 2014

Medicare is not doing enough to take care of chronically ill patients, and the limitations of the fee-for-service system inhibit a needed focus on these patients and their needs. This is critically important because most Medicare enrollees suffer from multiple chronic conditions and account for almost all of its costs.

Our Solution:

The Wyden-Isakson-Paulsen-Welch Better Care, Lower Cost Act removes the barriers that prevent Medicare providers from building on existing successful delivery models, and provides a framework for encouraging innovative chronic care delivery across the country. Specifically, the bill:

Provides Critical Support for Providers

To support providers and plans wanting to actively engage and care for this population, this proposal: does not include any form of the attribution rule, encourages specialized team-based care with rewards for improving patient’s outcomes, uses telemedicine and knowledge networks to increase access in rural areas, and includes vital case management services proven to increase medical compliance.

Focuses on the Unique Needs of Medicare Enrollees

To help transition Medicare from a program that simply treats sickness to one that promotes wellness, this proposal identifies the patients most in need and provides them with better care before becoming the most acutely and persistently ill. To improve standards of care for Medicare enrollees, the bill provides for changes to medical school curricula in order to better respond to the evolving needs of the chronically ill.

Ends Geographic Disparities in Integrated Care

This proposal creates incentives for higher quality, lower cost Medicare coverage nationwide that is open to Medicare beneficiaries regardless of income or place of residence. With a “Better Care Plan” (BCP) designation, a state-licensed and certified provider may practice at the top of his/her license, removing barriers to care that currently exist in parts of the country with provider shortages.

Pays for a Medicare Program Taxpayers Want and Beneficiaries Need

In response to the need to move away from fee-for-service, this proposal makes BCP providers and plans fully responsible for the cost, care and outcomes of their enrolled patients, and directs CMS to determine spending based on the experience of similar patients that are not enrolled in a BCP.

http://www.wyden.senate.gov/chroniccare

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Wyden Plan May Be Vision For Future Medicare Reforms

By Mary Agnes Carey

Kaiser Health News, January 21, 2014

Sen. Ron Wyden, the Oregon Democrat widely expected to be the next Senate Finance Committee chairman, last week led a bipartisan group of lawmakers, health care experts and seniors’ advocates backing a plan to better coordinate care given to Medicare beneficiaries.

The proposal is part of the ongoing health policy conversation over shifting Medicare away from paying per service provided to paying for the quality of that care.

Health insurers and providers who want to specialize in chronic care would receive a set amount of money to care for patients and would be responsible for the cost, care and outcomes of their enrolled patients.

It’s unclear what happens next. Elements of the bill may be included in legislation to repeal and replace Medicare’s “sustainable growth rate,” the formula used to pay Medicare physicians.  Maybe the legislation will be attached to another bill or pass on its own. Even if it goes nowhere, it may well be the pathway to Congress finding consensus on Medicare changes in the future.

Reader response: Don McCanne

Before you come to any conclusions, read the actual bill. Google “S.1932 – Better Care, Lower Cost Act”

From the Act: “The qualified BCP (Better Care Program) shall be accountable for the quality, cost, and overall care of enrolled BCP eligible individuals and agree to be at financial risk for that enrolled population.”

Much of the rest of the legislation involves efforts to define the nature of the Better Care Program provider teams, the patient populations, their risks, and how to establish capitation rates that will reduce spending while increasing quality. Such efforts would be administratively intensive and not very effective.

Primary care already plays a very important role in providing chronic care. Our efforts would be better directed to reinforcing the primary care infrastructure. Fragmenting Medicare’s risk and shifting it to the providers might be therapeutic for the federal budget, but it places the providers in conflict with their patients over who will come out ahead – the exact opposite of what we want in our health care system.

http://capsules.kaiserhealthnews.org/index.php/2014/01/wyden-plan-may-be…

S.1932, the Better Care, Lower Cost Act, is important since the concept is being considered as an offset to the cancellation of the accrued deficits related to the sustainable growth rate (SGR), which is a flawed formula for adjusting Medicare payments. Congress has given itself a three month window to enact an SGR fix. This is apt to slip through as attention is directed to celebrating SGR relief while ignoring the actual SGR fix.

The bill can be accessed at congress.gov. It is somewhat complex, which is not a surprise since it empirically segregates chronic care patients and then sets up an administratively complex “Medicare Better Care Program” that “promotes accountability and better care management for chronically ill patient populations and coordinates items and services under parts A, B, and D, while encouraging investment in infrastructure and redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations.”

Although vague, the program seems to set up a variation of an accountable care organization, with bundling of services, while transferring financial risk to the providers so that they, in essence, also serve as the insurers. The wasteful administrative complexity and the perversity of the incentives alone should cause us to question this concept. As if caring for a patient with multiple chronic disorders wasn’t enough, we need yet additional government rules and bureaucratic oversight of an artificial chronic care construct that seems to be designed primarily to shift risk from the government to the providers?

We do need an improved Medicare that would serve all of us well as a single payer program, but this certainly isn’t it.

Remember the MaineRx

By Robert Kemp

Applied Health Economics and Health Policy, February 2014

Abstract

In 2000, Maine became the first state in the US to enact a law to establish maximum retail prices for prescription drugs for all qualified state residents—MaineRx. The purpose was to lower prescription drug prices for all eligible residents of the state. The state was to have the ability to negotiate manufacturer rebates and pharmacy discounts. Major drug manufacturers, represented by the Pharmaceutical Research and Manufacturers of America, challenged MaineRx in the courts, going to the Supreme Court where it was upheld in 2003. Fifteen other states enacted, proposed, or filed price-control bills in their state legislatures. The result would have been downward pressure on prices outside of the public programs, and the first instance of state-sponsored monopsony power in the US. MaineRx is viewed as one of the proximate causes of the pharmaceutical industry’s successful lobbying effort to implement Medicare Part D in 2004. Medicare Part D is administered through private Pharmacy Benefit Managers (PBMs); it made administration via state government PBMs illegal. The lower prices that could have resulted from MaineRx-type laws did not occur and the magnitude of these reductions is commented upon.

Conclusion

Politics play an important role in health policy. In this case, pharmaceutical companies, represented by the PhRMA, were able to influence Congress to introduce a national solution to the threat of state-run PBMs and the negotiation of positive lists. The companies were instrumental in formulating Medicare Part D and lobbying for its passage. It is speculated that Medicare Part D came about to put a stop to state rebate programs such as MaineRx in fear of reduced profits for the pharmaceutical companies. Thus, Medicare Part D terminated the existence of state-run PBMs. The historical importance of MaineRx is that it was an attempt of the state trying to contain healthcare cost and expand prescription coverage. Had MaineRx been implemented, it might have been a milestone on the path to reduced healthcare cost.

Robert Kemp, Ph.D. is Associate Professor, Clinical and Administrative Sciences, School of Pharmacy, The University of Louisiana at Monroe

http://link.springer.com/article/10.1007/s40258-013-0076-3

Comment:

By Don McCanne, M.D.

Government works for the benefit of the people, sometimes. The government of Maine almost brought under control our outrageous drug pricing in the United States. The Supreme Court even upheld Maine’s legislation that would do so. But then, with the conservatives in charge, Medicare Part D was enacted which prohibited Maine or any other state, or even the federal government itself, from using its monopsony power to demand fair pricing of drugs by the pharmaceutical firms. This time the government worked to the benefit of the plutocrats rather than the people. We have to change that.

Remember the MaineRx

By Robert Kemp

Applied Health Economics and Health Policy, February 2014

Abstract

In 2000, Maine became the first state in the US to enact a law to establish maximum retail prices for prescription drugs for all qualified state residents—MaineRx. The purpose was to lower prescription drug prices for all eligible residents of the state. The state was to have the ability to negotiate manufacturer rebates and pharmacy discounts. Major drug manufacturers, represented by the Pharmaceutical Research and Manufacturers of America, challenged MaineRx in the courts, going to the Supreme Court where it was upheld in 2003. Fifteen other states enacted, proposed, or filed price-control bills in their state legislatures. The result would have been downward pressure on prices outside of the public programs, and the first instance of state-sponsored monopsony power in the US. MaineRx is viewed as one of the proximate causes of the pharmaceutical industry’s successful lobbying effort to implement Medicare Part D in 2004. Medicare Part D is administered through private Pharmacy Benefit Managers (PBMs); it made administration via state government PBMs illegal. The lower prices that could have resulted from MaineRx-type laws did not occur and the magnitude of these reductions is commented upon.

Conclusion

Politics play an important role in health policy. In this case, pharmaceutical companies, represented by the PhRMA, were able to influence Congress to introduce a national solution to the threat of state-run PBMs and the negotiation of positive lists. The companies were instrumental in formulating Medicare Part D and lobbying for its passage. It is speculated that Medicare Part D came about to put a stop to state rebate programs such as MaineRx in fear of reduced profits for the pharmaceutical companies. Thus, Medicare Part D terminated the existence of state-run PBMs. The historical importance of MaineRx is that it was an attempt of the state trying to contain healthcare cost and expand prescription coverage. Had MaineRx been implemented, it might have been a milestone on the path to reduced healthcare cost.

Robert Kemp, Ph.D. is Associate Professor, Clinical and Administrative Sciences, School of Pharmacy, The University of Louisiana at Monroe

http://link.springer.com/article/10.1007/s40258-013-0076-3

Government works for the benefit of the people, sometimes. The government of Maine almost brought under control our outrageous drug pricing in the United States. The Supreme Court even upheld Maine’s legislation that would do so. But then, with the conservatives in charge, Medicare Part D was enacted which prohibited Maine or any other state, or even the federal government itself, from using its monopsony power to demand fair pricing of drugs by the pharmaceutical firms. This time the government worked to the benefit of the plutocrats rather than the people. We have to change that.

Oncologists call for single payer in leading cancer journal

Physicians for a National Health Program, January 17, 2014

A feature article published today in the Journal of Oncology Practice contains an evidence-based appeal by two oncologists, including a past president of the American Society of Clinical Oncology (ASCO), for their colleagues to endorse a single-payer health system.

They say they do not believe that the Affordable Care Act, or “Obamacare,” will be able to solve the health care crisis that cancer patients face.

https://www.pnhp.org/news/2014/january/oncologists-call-for-single-payer-in-leading-cancer-journal

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Why Oncologists Should Support Single-Payer National Health Insurance

By Ray E. Drasga, MD and Lawrence H. Einhorn, MD

Journal of Oncology Practice, January 2014

Cancer leaves a patient in his or her most vulnerable state not only physically but financially. Oncologists are in a unique position to champion the cause of improving access to care for patients with cancer and easing the financial burden they and their families face.

With ACA now the law of the land, and its retention of the private insurance industry at the center of the health system, the trend toward high-deductible health plans, underinsurance, and cost shifting to patients will almost certainly worsen. 59 Years of private-sector solutions have failed. There needs to be a major paradigm shift in our approach to funding health care in the United States.

Because ACA will fail to remedy the problems of the uninsured, the underinsured, rising costs, and growing corporate control over caregiving, we cannot in good conscience stand by and remain silent. Life is short, especially for some patients with cancer; they need help now. We call on the American Society of Clinical Oncology (ASCO) to advocate for a single-payer national health insurance program. Our medical system must be oriented toward caregiving, not toward maximizing investors’ profits.

All of our patients deserve dignity. It is our moral and ethical obligation as physicians to advocate for universal access to health care. Oncologists, working in conjunction with ASCO, are well positioned to educate legislators about single-payer national health insurance. The time to start is now.

http://jop.ascopubs.org/content/10/1/7.extract

http://org.salsalabs.com/o/307/images/Drasga%20Einhorn%20authors%20proof-edited%20(1).pdf

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Patients’ Costs Skyrocket; Specialists’ Incomes Soar

By Elisabeth Rosenthal

The New York Times, January 18, 2014

Many specialists have become particularly adept at the business of medicine by becoming more entrepreneurial, protecting their turf through aggressive lobbying by their medical societies, and most of all, increasing revenues by offering new procedures — or doing more of lucrative ones.

That math explains why the incomes of dermatologists, gastroenterologists and oncologists rose 50 percent or more between 1995 and 2012, even when adjusted for inflation, while those for primary care physicians rose only 10 percent and lag far behind, since insurers pay far less for traditional doctoring tasks like listening for a heart murmur or prescribing the right antibiotic.

Oncologists benefit from the ability to mark up (and profit from) each dose of chemotherapy they administer in private offices, a practice increased dramatically in the late 1990s. The median compensation for oncologists nearly doubled from 1995 to 2004, to $350,000, according to the M.G.M.A. One study last year attributed 65 percent of the revenue in a typical oncology practice to such payments.

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New Truths That Only One Can See

By George Johnson

The New York Times, January 20, 2014

It has been jarring to learn in recent years that a reproducible result may actually be the rarest of birds. Replication, the ability of another lab to reproduce a finding, is the gold standard of science, reassurance that you have discovered something true. But that is getting harder all the time.

Fears that this is resulting in some questionable findings began to emerge in 2005, when Dr. John P. A. Ioannidis, a kind of meta-scientist who researches research, wrote a paper pointedly titled “Why Most Published Research Findings Are False.”

His work was just the beginning. Concern about the problem has reached the point that the journal Nature has assembled an archive, filled with reports and analyses, called Challenges in Irreproducible Research.

Among them is a paper in which C. Glenn Begley, who is chief scientific officer at TetraLogic Pharmaceuticals, described an experience he had while at Amgen, another drug company. He and his colleagues could not replicate 47 of 53 landmark papers about cancer. Some of the results could not be reproduced even with the help of the original scientists working in their own labs.

Given what is at stake, it seems like a moral failing that the titles of the papers were not revealed. That was forbidden, we’re told, by confidentiality agreements imposed by the labs.

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Drug development: Raise standards for preclinical cancer research

By C. Glenn Begley and Lee M. Ellis

Nature, March 28, 2012

What reasons underlie the publication of erroneous, selective or irreproducible data? The academic system and peer-review process tolerates and perhaps even inadvertently encourages such conduct. To obtain funding, a job, promotion or tenure, researchers need a strong publication record, often including a first-authored high-impact publication. Journal editors, reviewers and grant-review committees often look for a scientific finding that is simple, clear and complete — a ‘perfect’ story. It is therefore tempting for investigators to submit selected data sets for publication, or even to massage data to fit the underlying hypothesis.

Improving preclinical cancer research to the point at which it is reproducible and translatable to clinical-trial success will be an extraordinarily difficult challenge. However, it is important to remember that patients are at the centre of all these efforts. If we in the field forget this, it is easy to lose our sense of focus, transparency and urgency.

http://www.nature.com/nature/journal/v483/n7391/full/483531a.html

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Oncology Market Access

By Jill Sackman, D.V.M., Ph.D. & Michael Kuchenreuther, Ph.D

eyeforpharma

Confronted with unsustainable costs and inconsistent quality of patient outcomes, the U.S. healthcare segment has been embroiled in a national debate over healthcare reform. While nearly every division of the industry has come under fire because of high healthcare costs, one therapeutic area that has continued to win premium reimbursement is oncology. Historically, cancer drugs have enjoyed premium pricing and widespread off-label usage because of their designation for patients with generally incurable diseases. Furthermore, new drugs have been rapidly adopted despite weak clinical evidence and overall questionable value. Thus, it is not surprising that spending on these drugs in the U.S. has risen at twice the rate of total drug spending in recent years.

http://www.eyeforpharma.com/oncologyusa/numerof-whitepaper.php

Comment:

By Don McCanne, M.D.

Cancer has become outrageously expensive to manage. A major factor in the increased spending is the use of high-priced cancer drugs. The newest drugs are priced at about $10,000 per month – a level at which coinsurance payments by patients may not be affordable, if the drug is even covered by the patient’s plan.

What is particularly disconcerting is that the science behind these new drugs is particularly weak. We are paying a lot for drugs that often are not particularly effective and that frequently make people sick. Many of these drugs are introduced into the market after showing scant improvement but were approved because the nominal benefit reached the level of statistical significance. Factors determining the prices of these drugs include costs of research and marketing, like other drugs, but the firms also include “what is a life worth” adjustments – capitalizing on the grief of cancer patients and their families.

Of course there are therapeutic interventions in cancer that are very effective, sometimes curative. With today’s emphasis on outcomes, should the oncologists be paid very high fees for the successful outcomes while being paid little for futile therapy? Of course not. Their incomes should depend on their provision of professional services regardless of the prognosis of their patients.

The article in the Journal of Oncology Practice by Ray Drasga and Lawrence Einhorn explains the rationale of a single payer system – a rationale that should appeal to all oncologists who have faced the dilemma of being able to offer only very expensive drugs that provide unwarranted hope in a futile clinical situation, especially when the drugs may impose a major financial hardship on the patient.

Imagine a situation in which money is removed from that scenario, made possible by a single payer system. The patient does not have to consider out-of-pocket costs when discussing options with her physician. The physician receives the same income regardless of what clinical course the patient selects. Clinical decisions are made by the patient using the best information available, provided to her by her physician. Cost decisions are made by the public administrator, including negotiated pricing for cancer drugs, in an environment totally removed from the clinical scene.

Cancer can be a very cruel disease over which physicians frequently agonize, acutely aware of the physical and emotional pain of the patient. We really need a system in which all of our attention can be devoted to obtaining the very best care for the patient, totally removed from the “business” aspect of medicine. A well designed single payer system would do that.