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Insurers Push Back Against Growing Cost Of Cancer Treatments

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Highmark’s Fischer and others say that payment method creates an incentive to use higher-priced drugs — and more of them.

“If you give a 10,000 drug, it’s $600 [for the doctor]. If you give a $100 drug, you get a margin of $6,” said Fischer.

He said that such “buy and bill” programs are being phased out in other specialties, but have continued in cancer care because insurers fear losing oncologists from their networks.

Administering chemotherapy in hospital outpatient settings is even more expensive, studies show. IMS Health reported that per-dose payments were 189 percent higher for brand-name drugs given in hospital outpatient settings than in independent doctor offices. 

Some of that added burden falls on patients, who paid $134 more per dose on average for cancer drugs given in hospital outpatient settings than in doctors’ offices, the report found.

While the health law limits annual out-of-pocket costs to $6,350 for individuals and $12,700 for families, paying such sums out of pocket is daunting for many consumers.

Studies of breast cancer patients show that even small increases in copayments led some to stop treatment.

The amount “is unachievable for many of the patients we represent,” said Brian Rosen, senior vice president at The Leukemia & Lymphoma Society. “Patients who need lifesaving therapies often can’t afford access to the cure.”

The problem is likely to grow as more physician practices are purchased by hospitals. In a recent six-month period, for example, Medicare payments tripled for chemotherapy in hospital outpatient settings and dropped 14 percent in doctors’ offices.

In March, the advisory group MedPac recommended that Medicare reduce or eliminate differences in payment rates between outpatient departments and physician offices for many services.

Drugmakers Worry About Innovation

As more attention focuses on costs, the drug industry has fired back, concerned that standardized regimens will discourage the innovation that it says has led to better survival rates.

Such drug regimens or bundled payments could “create significant barriers and disincentives toward continued innovation,” said Randy Burkholder, vice president of policy at the Pharmaceutical Research and Manufacturers of America, the industry’s lobbying arm.

Some physicians also reject a one-size-fits-most approach, concerned about impact on quality.

Insurers insist they can lower cost without hurting quality or innovation. Wellpoint, for instance, said it expects to save at least 3 percent on overall cancer costs through its plan to give bonuses to doctors who follow specified treatment regimens, or “pathways.” Such regimens are based on analyses of effectiveness and costs by private firms, such as U.S. Oncology, or by insurers’ themselves.  

To date, evidence of savings is inconclusive. Some insurers have reported significant savings, while others have not, said Lindsay Conway, practice manager at the Advisory Board Company, a consulting firm that works with hospitals.

Fri, Jun 06 2014

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