Opinion

Medicare’s Deadly Cancer Care Gamble

By Jennifer M. Hinkel
May 20, 2016 at 5:00 am ET

The Centers for Medicare & Medicaid Services (CMS) is poised to drastically cut cancer doctors’ pay, which could jeopardize the care being provided to many chronically ill seniors. While this proposal is facing an uphill battle due to immense backlash from physicians and patients, we all should find it unnerving that CMS seems so willing to gamble on cancer care and turn seniors into involuntary guinea pigs in the process.

Medicare’s proposal would randomize physician payment based on location, driving variation in care across geography as some practices shutter their doors, send patients away, or stop offering some medicines. Physician practices that administer infusion and injection drugs in their offices, including arthritis and immune specialists in addition to cancer doctors, derive a significant amount of revenue from an add-on payment to these drugs. Medicare currently pays an add-on of about four percent of sales price (prior to sequestration budget cuts, it was higher).

The new proposal would cut this four percent to what, after Sequestration cuts are included, amounts to less than one percent. At this tiny rate, distributor and delivery fees could eat up the entire margin — to the point that it costs physicians to infuse medicine into patients.

In a typical cancer practice, the aggregate of these small percentage payments must cover a host of essential and unreimbursed services, from pharmacist preparation of chemotherapy to the salaries of specialist cancer nurses and the rent on a suite of infusion chairs. Detractors argue that a percentage-based add-on encourages prescription of expensive drugs over cheaper ones; in reality, opportunities to drive decisions based on financials are limited due to the lack of clinical interchangeability among cancer drugs.

In most cancers, the drug options are still far too few, not too many, and most doctors already seek to minimize their patients’ cost burden.

If Medicare is allowed to randomize payments so that some practices lose money, their patients will become the biggest losers. Where a patient is treated could determine what treatment she receives. CMS claims this will lower costs; it may do so, but at the expense of lives.

Who will bear the most significant burden? It will be the poorest, oldest, and least educated patients who will struggle to understand whether they and their doctors have been assigned to the “experimental arm” of this reimbursement research trial. These Medicare beneficiaries will be the unwitting subjects of a study that they did not elect to join. They will not be offered the opportunity to consent to participation, nor switch to a physician unaffected by the changes.

For the practices randomized to receive lower payments, the negative results are predictable. First, staffing will get cut to the bare minimum, risking patient safety and continuity of care. Second, offices will turn patients away, sending them to hospitals (which actually would cost Medicare more) or to other practices. In some cases, these patients will fall through the cracks and receive less or no treatment. Third, the options for treatment will be curtailed, as practices may no longer be able to afford to prescribe and prepare certain drugs.

When older medicines are used instead, initial cost may seem lower, but the side effect burden might be higher, leading to missed work days, hospitalizations, and potentially serious adverse events. Overall, this approach does not save money. Furthermore, we can hardly afford for practices to close their doors or lower capacity when we are facing a looming shortage of cancer doctors and strained cancer care capacity due to an aging population.

More and more frequently, cancer patients and survivors such as myself are seeing a cancer care system that – in a misguided effort to blame the rising cost of health care on cancer drugs – is risking patient access to the best care available.

Medicare’s proposal erodes the trust between doctors and patients, disproportionately harms the poor and less educated, and creates complicated methods of cutting small costs only to recognize large expenses on the other end — what might be called “robbing Peter to pay Paul” or “Penny wise, Pound foolish.” True savings in cancer care will come from pushing ahead with scientific innovation: focusing on saving lives, not saving pennies.

Jennifer M. Hinkel, MSc is a cancer survivor, a health economist, a Partner at McGivney Global Advisors, and the Founder of Resilience Racing, the cancer survivor sailing team.

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