Why oncologists may refuse medicare patients

Update: A possible solution?
Huffington post article about patients traveling thousands of miles
Generating congressional activity


I don't want this blog to be about politics.  I want this to be a place for educating patients about their disease.  In this case though I need to highlight a topic that carries a lot of political emotions.  Please know that I am not trying to argue left vs right - just to inform patients about some trouble that is brewing.

Our system of health care delivery is really broken.  It was broken before Obamacare and I think a golden moment for positive change was blown up in terrible partisanship.  Both sides carry plenty of blame - this is not about pointing fingers at either side.  While the survival rates for patients with individuals with cancer in the US exceeds many other countries - the way it gets paid for is a true mess.

This headline sounds alarmist - but you need to know about it - and I encourage you to read the article (WP tends to be more conservative in opinions - but the facts of this article reflect pretty closely what I am seeing):

Cancer clinics are turning away thousands of Medicare patients. Blame the sequester.

Taking care of patients with cancer is extremely expensive.  Drugs can cost unbelivable amounts of money.  $5000-$10,000 per dose of some drugs is commonplace (Bendamustine, ofatumumab are over 100k / for a full course of treatment - neulasta 5-6k/dose, Rituxan - 40K/year). 

When an oncologist in community practice (important to differentiate docs who are practicing under a hospital vs independent - right now the split in US is about 40/60% respectively) treats you with a drug, they have to purchase the drug, administer the drug, and hope against hope that they get reimbursed by insurance and that patients pay their co-payments.  Often paymenst may lag by 30-90 days so that entire time docs are essentially "loaning" the drug to the patient until it is repaid by their insurance.  If that ever breaks down - they eat the cost. 

When I was searching for a job after training I interviewed with a practice close to where I grew up - so I could be near family.  I had an offer to join a practice where all the docs ended up declaring personal bankruptcy when their practice got upside down on their drug costs.  They were profiled in this CNN article - the problem is real.

Doctors going broke.
Here is another article - not about the group I personally know

Since many patients with cancer are older - they are frequently covered by Medicare.  A number of years back payment reforms implemented a system called ASP+6% for drugs administered in the doctors office.  It means that when a doctor treats you with rituxan, they get reimbursed the AVERAGE WHOLESALE PRICE of rituxan plus 6%.  Your head can probably run a bunch of scenarios about this and come up with vastly different conclusions.  I will tell you how I see it play out with many docs that I know.

First of all, let's talk about what that 6% is supposed to cover.  In a family practice clinic, there may be 1-3 staff members per doctor.  That includes front desk, medical records, nurse, etc.  In an oncology practice it is often closer to 8-10 staff per doc.  That includes a pharmacist, pharmacy technician, infusion nurse, insurance verification, front desk, medical assistants, etc.  The idea is that the additional complexity of runing an infusion center is covered by that 6%.

The first major assumption is that you can actually buy your drugs for the average wholesale price.  Docs in smaller practices have a difficult time buying their drugs for the same price as a 200 physician network.  Hospitals have a special discount rate that independent docs simply cannot compete with.  AVERAGE means some docs can buy their prices below and some docs buy their drugs for more than what other docs pay.  The more you are above average price, the less revenue is there to run the infusion center.

Heaven forbid you should ever administer a drug and then have insurance deny payment.  One single dose can really hurt when it is 20K.  Sometimes these can be denied retroactively - even if several doses have been given.... I've had it happen (fortunately it wasn't one of the really expensive ones).  Sometimes you can get a drug company to replace the drug - sometimes you can't.

The big issue with the headline above is that the sequester has resulted in a 2% cut in medicare part D payments - so now that reimbursement is ASP +4%.  That represents a 33% reduction in the margin (6-2=4) any docs may have had if they were even able to buy the drug at the average price to begin with.  For many docs the answer is clear - they are personally paying out of their pocket to treat some patients with chemotherapy.  Even margins of -0.5% can be significant if the drug costs 10K and you are paying salaries of your infusion nurses - you simply cannot keep your infusion center open.

As a result, a number of practices are starting to close their practice to patients with medicare as their only insurance.  Hospitals have the ability to charge more for their services than independent docs so they are less effected by these changes.  There has been a tidal wave of docs selling their practice to hospitals because they just cannot afford to provide care independently even though it is generally 30% less expensive to receive care through an independent physician:

Oncologists struggle to stay independent

The first article above indicates that patients may be shifted into hospital based practices.  The reality though is that many smaller communities don't have such groups - in exactly the same place where the problem is most acute.

The point here is that this is a time of great difficulty for a bunch of docs who really care a ton about their patients.  I still love what I do.  It gives me a ton of personal satisfaction to step into a patients life when they are terrified and provide some hope and comfort.  I know not all patients end up with the outcome they want, but even when the outcome isn't going to be good, it makes me feel incredibly good if I can help the patient on their journey.

As hard as it is for docs - I am sure it is even more scary for patients who are not sure where they would get their care if their doc had to close up shop.  I really empathisize with their fear.  I don't want this to be a "boo-hoo" post - I know a lot of people are trying to sort their way through this economic train wreck - both patients and docs. 

I wish I could tell you what you can do - unfortunately I don't see many easy answers.  Let your elected officials know if you experience a lack of access to care or support efforts to reverse these cuts. Let your insurance know how much you value your provider (if you do).  It all seems pretty weak to me quite frankly.

Sorry for the downer post -
Jeff