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.
Despite their own cost concerns, patient groups also express misgivings about standardized drug regimens and flat payments, fearing they may encourage providers “to make treatment decisions based on cost and less on the evidence,” Rosen said.
Yabroff, the epidemiologist at the National Cancer Institute, said concerns about quality are real, and make additional research imperative so that both “quality and cost are evaluated.”
Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.
Fri, Jun 06 2014