An interesting issue--financial incentives for chemotherapy

SandiaBuddy
SandiaBuddy Member Posts: 1,381 Member
in Colorectal Cancer #1

I came accross this issue a while back when a local newspaper article suggested the "spread" between actual cost of IV chemotherapy and the reimbursement rate provided 10% of the budget of the cancer center where I receive treatment.  This raises the very real issue of whether my oncologist has a financial incentive to recommend IV chemotherapy.  I have not researched this issue to death, but here are a few resources that comment on the issue:

 

[T]here is widespread perception in policy circles that the [chemotherapy reimbursement] system creates a perverse incentive for outpatient oncology practices to use more expensive oncolytics rather than pursuing more cost-effective treatment strategies

First, buy and bill sets up a system where oncologists who provide care to patients with cancer face financial incentives to administer intravenous anticancer drugs. In most industries, there is not much difference between wholesale and retail prices, and so they send consistent signals. But when wholesale and retail prices for drugs diverge systematically, incentives for dysfunctional behavior may be created. Oncologists and hospitals profit on the spread between the reimbursed price and the wholesale cost. Malin et al reported that many oncologists report that they face financial incentives to administer anticancer drugs.10 Evidence also suggests oncologists’ drug choices do appear to be responsive to profit margins (for examples, see Jacobson et al 2010 and Conti et al 2012), although there remains controversy about the quality of this evidence.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4594838/

 

The key is, if you can get discounted drugs and give them to well-insured patients, you can nearly double your money on most of those drugs. If you can't distribute those drugs yourself—for example, you don't own an outpatient pharmacy—most retail pharmacies and major ones, such as Walgreens, will sign contracts with you so that if you send your patients to them and they can distribute discounted drugs and charge insurers full boat for them, both share in those profits. And if you have the ability to infuse drugs, then you buy a drug for a 30%-40% discount under ASP; you administer it to a patient; and you send a bill to Medicare for ASP plus four, or bill to UnitedHealthcare for ASP plus 20 or something like that, and there is your profit.

https://www.medscape.com/viewarticle/835747#vp_2

Comments

  • Mikenh
    Mikenh Member Posts: 777 Member
    edited January 2018 #2
    The insurance companies aren

    The insurance companies aren't stupid though. My hospital billed about $11,000 for my first infusiion and the negotiated price was a bit over $1,000. My insurance company also requires me to buy Xeloda from their special mail-order pharmacy.

    My insurance company, starting 2018, won't reimburse pharmacy discounts either. That is if your pharmacy has a discount program like a loyalty rewards card, then my insurance company won't reimburse that discount amount. It appears that's the case whether or not you got the discount. They sent me a somewhat cryptic letter last year on this. I didn't use any kind of discount card but I think that they're going to assume that you're using one based on the pharmacy. So it's something that I'll have to watch for.

  • beaumontdave
    beaumontdave Member Posts: 1,289 Member
    edited January 2018 #3
    Another case for getting

    Another case for getting profit motive out of healthcare. I think it needs to be there for Research and Development, but otherwise I'd prefer a single-payer system working with non-profits....................................Dave

  • BRHMichigan
    BRHMichigan Member Posts: 368
    #4
    Pressure to take chemo

    My hospital-affiliated Oncologists have been pushing chemo on me since diagnosis. It is obviously a priority in the cancer business. And I have to believe the motives are financial. The kickbacks are huge. 

    They can't guarantee that it will be effective or won't produce permanent or even life threatening side effects. So I figure the risks outweigh the benefits for me. I will stick with alternative therapies as long as I can.

  • zx10guy
    zx10guy Member Posts: 273 Member
    #5
    BRHMichigan said:

    Pressure to take chemo

    My hospital-affiliated Oncologists have been pushing chemo on me since diagnosis. It is obviously a priority in the cancer business. And I have to believe the motives are financial. The kickbacks are huge. 

    They can't guarantee that it will be effective or won't produce permanent or even life threatening side effects. So I figure the risks outweigh the benefits for me. I will stick with alternative therapies as long as I can.

    I looked at your profile and

    I looked at your profile and you indicate you're Stage 3b.  Your oncologist is not pushing chemo on you because of any financial incentive.  For anyone who is Stage 3 (a, b, or c), the standard of care as established by the entire medical community is chemo.  In the beginning, I thought about not going through chemo.  But decided to trust my doctor and all the science behind the established protocol.

    There are no guarantees in life or in medicine.  That's why most doctors will not give you a guarantee.  Even if you're stage 1, many doctors will be cautious with what they say.  Going alternative, there are no guarantees either.  At least with traditional medicine, there is research and stats which back up the treatments.  There are none for alternative therapies.  And just because you choose to go with traditional treatment, doesn't mean you can't supplement with alternative therapies.  Many cancer centers have people trained in holostic/alternative therapies to supplement your current treatment.

  • xNTP
    xNTP Member Posts: 38 Member
    #6
    BRHMichigan said:

    Pressure to take chemo

    My hospital-affiliated Oncologists have been pushing chemo on me since diagnosis. It is obviously a priority in the cancer business. And I have to believe the motives are financial. The kickbacks are huge. 

    They can't guarantee that it will be effective or won't produce permanent or even life threatening side effects. So I figure the risks outweigh the benefits for me. I will stick with alternative therapies as long as I can.

    agree

    mostly with agree zxguy with more credit to some alternative drs for support

  • tanstaafl
    tanstaafl Member Posts: 1,313 Member
    #7
    many financial conflicts of interest

    Finance and marketing interests of all players distort CRC care; greatly exploited patients are merely a necessary evil. 

    Basic 5FU chemo?  No fundamental reason oral 5FU based chemo should cost more than generic Cipro.    We bought 4 small UFT chemo pills per day that cost $1-$2 per pill starting in 2010, instead of Xeloda at $6k-$9k per month.  It's a simple 5FU derivative that literally makes the patient feel slightly better - hardly what I hear from anyone else on chemo.  UFT plays nicely with many small footprint adjuncts.  No fundamental reason it couldn't be a 10 - 25 cent generic at Walmart, but it isn't even available in US-Canada due to FDA legal pecularities, and implicit corruption.   It even pollutes the water less than capecitabine by a large factor, like 5-6x on a fluorine basis.

    Personalized medicine for CRC has had some excellent candidate drugs and supplement known and practically knowable for the last 10-20 years.  Likewise companion markers and blood analyses these last 5-20 years.   

    Important generic "low" techs are orphans without support, costing patients (and caregivers) major losses of time, QoL, health and wealth.

  • abita
    abita Member Posts: 1,152 Member
    #8
    zx10guy said:

    I looked at your profile and

    I looked at your profile and you indicate you're Stage 3b.  Your oncologist is not pushing chemo on you because of any financial incentive.  For anyone who is Stage 3 (a, b, or c), the standard of care as established by the entire medical community is chemo.  In the beginning, I thought about not going through chemo.  But decided to trust my doctor and all the science behind the established protocol.

    There are no guarantees in life or in medicine.  That's why most doctors will not give you a guarantee.  Even if you're stage 1, many doctors will be cautious with what they say.  Going alternative, there are no guarantees either.  At least with traditional medicine, there is research and stats which back up the treatments.  There are none for alternative therapies.  And just because you choose to go with traditional treatment, doesn't mean you can't supplement with alternative therapies.  Many cancer centers have people trained in holostic/alternative therapies to supplement your current treatment.

    I think my oncologist's

    I think my oncologist's motives are to save my life. Does he make money, yes. But he genuinely does what he thinks is the best way to save my life. I understand the system needs to be overhauled. But I have no doubt that his motive is to save me now, and in the long term. I got upset about waiting for a chair. He knew that it was really just me being upset about having cancer, and he came and sat with me for quite some time to talk with me.

  • zx10guy
    zx10guy Member Posts: 273 Member
    #9
    abita said:

    I think my oncologist's

    I think my oncologist's motives are to save my life. Does he make money, yes. But he genuinely does what he thinks is the best way to save my life. I understand the system needs to be overhauled. But I have no doubt that his motive is to save me now, and in the long term. I got upset about waiting for a chair. He knew that it was really just me being upset about having cancer, and he came and sat with me for quite some time to talk with me.

    abita,

    abita,

    This great to hear.  I've had exposure to various areas of health care.  I've seen some really bad doctors.  One I wanted to knock on his butt because of his demeanor to a patient I had brought in to the trauma center after extricating him from a car.  And then it's stories like yours that give me hope there are still doctors who go into medicine for the right reasons.  My current oncologist is one of those people too.  He will spend as much time with you as you need.  It sucks if you have an afternoon appointment with him; that's why I try to get morning appointments.  He has also given me his cell number which I have used periodically being careful not to abuse this level of access I have.  There are other doctors in my medical team I would also rank highly due to their caring attitude towards their patients.  My surgeon has a cold demeanor but I think I've broken through that rough exterior.

  • Mikenh
    Mikenh Member Posts: 777 Member
    #10
    zx10guy said:

    I looked at your profile and

    I looked at your profile and you indicate you're Stage 3b.  Your oncologist is not pushing chemo on you because of any financial incentive.  For anyone who is Stage 3 (a, b, or c), the standard of care as established by the entire medical community is chemo.  In the beginning, I thought about not going through chemo.  But decided to trust my doctor and all the science behind the established protocol.

    There are no guarantees in life or in medicine.  That's why most doctors will not give you a guarantee.  Even if you're stage 1, many doctors will be cautious with what they say.  Going alternative, there are no guarantees either.  At least with traditional medicine, there is research and stats which back up the treatments.  There are none for alternative therapies.  And just because you choose to go with traditional treatment, doesn't mean you can't supplement with alternative therapies.  Many cancer centers have people trained in holostic/alternative therapies to supplement your current treatment.

    Every doctor that I've spoken

    Every doctor that I've spoken to has told me that I'll do fine. It's a long, tough road but just take one step at a time. My local oncologist is generally pretty busy so I don't think that he really needs my business. Same with my radiologist. And the folks at Dana Farber Cancer Institute have so many patients that it's difficult to get through the intake process - it's actually a fair amount of effort to get appointments. And my surgeon is quite busy too. Yes, the price of Xeloda is way up there and there are generics. But the insurance companies should be the side that works to control prices.

    I'm generally skeptical and look for what can go wrong and the doctors acknowledge that things can go wrong in treatment but I think that they've had enough experience to get an idea as to what works and what doesn't work.

  • BRHMichigan
    BRHMichigan Member Posts: 368
    #11
    Insurance

    I agree,  Mike. Insurance companies do have the leverage to make a difference in drug costs. I also must say that I visited my Oncologist today and he is extremely respectful of my choice to not do chemo, which statistically would only improve my chances by 10 to 13 percent. We went over everything I am doing,  which is a lot and mostly paid for out of pocket. I am thrilled to be treated by the best of both worlds. 

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