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Health Care Reform:

Health Insurance & Affordable Care Act

Insurers Push Back Against Growing Cost Of Cancer Treatments

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Targeting Cancer Treatment

Changing the way cancer care is paid for is a top priority for insurers and employers, with treatments costing the U.S. more than $127 billion each year. That is projected to grow 27 percent from 2010 to 2020 as the population ages, said epidemiologist Robin Yabroff at the National Cancer Institute.

Meanwhile, the average monthly cost of a brand-name cancer drug has doubled to $10,000 in the past decade, according to a May report from the IMS Institute for Healthcare Informatics.

That’s important because the traditional way to pay for cancer drugs given in a doctor’s office is to reimburse the physician for the average sales price of the drug, plus an added percentage to cover overhead and a de facto profit margin. In Medicare, for instance, the added percentage is 6 percent.

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.”

Fri, Jun 06 2014

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