Doctors in the US rarely used to let costs factor into their treatment decisions. But thanks to rising prices for cancer meds that can go for more than $100,000 a year, the ethos in oncology is changing dramatically,The Wall Street Journal writes. Money issues are now disrupting relationships with patients, causing some docs to go into debt and threatening to interfere with treatment options.
Unlike most docs, who write prescriptions filled at pharmacies, oncologists must buy many drugs upfront because they're delivered intravenously in the office. As a result, the paper writes, docs are on the hook until patients or insurers pay the bill. Reimbursement delays and denials are now more common as insurers clamp down on claims. Some patients can't afford high co-payments.
In February, after delays in payments from insurers, Stephen Hufford, an oncologist, was working to pay off several hundred thousand dollars of past-due bills to his drug distributor. When he ordered $20,000 of chemo for three patients he was to see the next day, he tells the paper the distributor refused to deliver unless he paid in advance and reduced his outstanding balance by another $20,000. He didn't have $40,000 in his bank account. You can watch an interview here.
Fueling the problem are new meds that transform care and provide new options for desperate patients, but can equal the down payment on a home or a child's college tuition for a few months of treatment. The average wholesale cost for a course of Avastin to treat one type of lung cancer, for example, is $56,000, according to Genentech, but it can take 90 days to be reimbursed by Medicare or private insurers and even longer for patients to hand make co-pays. Assuming insurance does cover a course of Avastin, a 20 percent co-pay comes to $11,200, the Journal notes.
A survey of 167 cancer docs reported last year in the Journal of Clinical Oncology found that 42 percent regularly raised cost issues when discussing treatments with patients. The study, conducted by an oncologist at the Dana Farber Cancer Institute in Boston, found 23 percent of oncologists said costs influence their treatment decisions, and 16 percent said they omit discussion of very expensive meds when they know costs will tax patient resources, the paper writes.
Until recently, prescribing chemo to patients was a rich source of revenue, the Journal notes, adding that through the 1990s, oncologists profited from liberal markups of up to 100 percent on some staple chemo drugs. But the exorbitant markups drew congressional scrutiny and sharp cutbacks with the passage of the Medicare Modernization Act in 2003.
In 2005, Medicare limited doc to a 6 percent markup on intravenous drugs, which account for a large share of new cancer drugs. Private insurers followed, the Journal writes. Margins shrank. Payments from patients were less reliable, too, as many struggled to cover co-pays.
In its survey of 17 specialist fields, by the Medical Group Management Association, a professional society of physician-practice managers, oncology was one of only two fields where income was flat in 2007, at about $360,000. The average growth for all fields was about 3 percent. Anesthesiologist incomes rose 9.5 percent, noninvasive cardiologist incomes rose 11.7 percent, and urologist incomes rose 8.5 percent last year.