Trusting The Doctor Who Robbed You
“When you start thinking of oncology as a business, then all these decisions make 
sense.”
When Medicare cracked down two years ago on profits that doctors made on drugs they administered to patients in their offices, it ended a windfall worth hundreds of thousands of dollars a year for each physician. The change, which mainly affected drugs to treat cancer and its side effects, had an immediate effect. In all, cancer doctors billed about $4.4 billion for chemotherapy and anemia medications in 2005, down from $5.6 billion in 2004, with Medicare covering 80% of the bills in each year. The difference mostly represented profit that doctors had made on the drugs.
Cancer doctors say the change did nothing to reduce a larger problem in cancer treatment. Some physicians say that cancer doctors responded to Medicare’s change by performing additional treatments that got them the best reimbursements, whether or not the treatments benefited patients. Those doctors also say that Medicare’s reimbursement policies are responsible. Cancer patients and their families play a role in rising costs, too, because they understandably want doctors to exhaust every possible treatment, even if the doctors might serve their patients better simply by talking and listening to them.In general, oncologists make money by providing chemotherapy, even when it has little chance of success. With the new limits on cancer drug profits, some cancer doctors are searching for new income — like performing chemotherapy more often or installing multimillion-dollar imaging machines where they profit when their patients receive diagnostic scans. They are also putting new pressure on cancer patients to make out-of-pocket drug co-payments, which can amount to hundreds of dollars a month. In some cases, they are requiring patients to get injections of certain drugs at the hospital instead of in their offices. Instead of writing prescriptions that patients filled at pharmacies, cancer doctors bought drugs themselves, then administered them to patients and billed Medicare or private insurers for reimbursement.
Today, the drugs range from relatively inexpensive treatments like Taxol, a breast cancer drug that costs about $150 a dose, to a new wave of biotechnology therapies like Avastin, a drug for colon and lung cancer that can cost as much as $8,800 a dose. Before 2005, Medicare paid a markup of 20% to 100% on many drugs, and private insurers paid even more. Doctors pocketed the difference, after certain expenses, as profit. Because the profits on different drugs varied enormously, doctors had an incentive to prescribe medications with the highest margins. The increase in spending, and concerns about the perverse incentives created by the system, caused Congress to change the reimbursement system to more closely tie Medicare payments to what doctors actually pay for the drugs. Now, drug reimbursement is supposed to amount to only 6% more than the average price of the drug paid by all doctors. As a result of the Medicare cutbacks, some doctors say they have been forced to refer patients to hospitals for chemotherapy treatment. Because of the complexities of Medicare rules, hospitals can make money providing chemotherapy for patients even in cases when doctors cannot. But it can be a serious inconvenience for people who are very ill and may have a few months to live.
“People go where the money is, and you’d like to believe it’s different in medicine, but it’s really no different in medicine,” says Dr. Robert Geller, who worked as an oncologist in private practice from 1996 to 2005 before leaving to become senior medical director at Alexion. “When you start thinking of oncology as a business, then all these decisions make sense.” Not sure when you should switch doctors? 10 Signs You Need A New Doctor.
