medicare and oncologists

[lohidoc]

Medicare has just released data detailing payments to US physicians.

The average payment to physicians from medicare was $77,000 per year.

Ophthalmologists received the highest payments.

Second are oncologists at $360,000 per year.

This is not a "horrible doctors" post. I am genuinely interested how this system works, and what the explanations might be for these high medicare payments to oncologists. Thoughts anyone?

[Bev G]

Just a first thought. I suspect that a majority of oncologists' patients are on Medicare, either due to age or disability. I don't think $360K is too much for them to make a year, at all. Their malpractice premiums would eat about 1/4 of that off the bat...then there is all the office overhead. When we were in practice overhead expenses were 65% of gross revenue. If oncolologists' expenses are similar, they'd be living on 125K/yr. NOT too much for their hours and all they do iMHO. What do you think about it, doc? And more importantly, how are you doing?

Hugs to you.

Bev

[dianne052506]

If Medicare payments include infusions done at the oncologist's office, then the high cost of Avastin and oxaliplatin (platinum ain't cheap) are two that I know about. It seems that Neulasta shots were also very expensive. I can't imagine what other treatments cost. I would guess the newer the drug, the more the drug company charges for it, and of course, those charges get passed right along . . .
Dianne

[weisssoccermom]

A few years back I brought up the subject on the board about oncologists and not wanting to Rx Xeloda. A few other members had heard the same story. My onc had related to me that at a conference the subject came up and one of the main reasons was MONEY. Remember that when you get infusions at the onc's office, they charge you for the cost of the drugs and they can and do charge whatever they want. Now, I'm not saying that oncs are notoriously bad doctors....far from it. However, the Xeloda v 5FU example perfectly illustrates perhaps why oncs can make so much money. I remember thinking that my onc didn't charge a particularly large amount for his office visit but it's not the visit itself that generates the money.....it's the drugs. For example, I remember my onc telling me that a 'typical' infusion of 5FU costs the clinic roughly $25 to purchase BUT....they can charge much much more for it. (This was the reason they weren't Rxing Xeloda more frequently....they don't make money off the drug that you purchase elsewhere).

In that same article, it mentioned that the ophthalmologists that were making so much money were making it mostly on one particular drug. I did a little research on that....looked at what my insurance company would pay for that drug vs my cost and figured that one doc would have to give an injection to over 1500 patients a year.....long story short, that doc would have to work 5 days a week (what doc do you know that does that), and inject on average 6.25 patients per day/everyday. There was something very fishy about that doc in Florida that raked in almost $21M in Medicare reimbursements.

Upshot....docs just don't bill for their time....they bill for the drugs and can jack the prices of the drug up, especially (as the article indicated) if the doc is getting a rebate from the pharma for a particularly expensive drug.

I should include that the articles that I read on this subject were NOT bashing oncologists by any means BUT the ophthalmologist that had such a ridiculously high reimbursement rate was under a TON of scrutiny....and rightly so!

[juliej]

The American Society of Clinical Oncology (ASCO), the American Society of Hematology (ASH), the American Society of Radiation Oncology (ASTRO), and the Association of Community Cancer Centers (ACCC) are all condemning the release of the info, but I appreciate the transparency.

Jaynee is right that a lot of the money goes for the drugs themselves, but apparently in the data there is a small percentage of doctors who receive the biggest payments. The New York Times reported that 100 doctors received a total of $610 million in 2012. One was a Florida ophthalmologist who was paid $21 million by Medicare. The article also said others in that group, including cancer specialists, received more than $4 million each that year. These "high billers" should definitely be scrutinized.

http://www.nytimes.com/2014/04/09/business/sliver-of-medicare-doctors-get-big-share-of-payouts.html

The New York Times also has a database, searchable by doctor, if you want to find out exactly how much your doctor received from Medicare in 2012.

http://www.nytimes.com/interactive/2014/04/09/health/medicare-doctor-database.html

[rp1954]

Generic capecitabine, celecoxib and cimetidine regimens with a few natural adjuncts could probably take a big bite out of unnecessary costs for the adjuvant pie. I'm actually more worried about the total societal costs of oxaliplatin neuropathies with younger and stage II/III patients.

[lohidoc]

Thank you all for the replies. So my understanding is that:

1. Medicare covers the over-65, cancer is more common in that age group, hence oncologists get a proportionally large amount of income from medicare. I get that.

2. Is it true that all or most oncologists provide chemo in their offices? This of course implies significant overhead expenses. They obtain the drugs directly from the company, at I presume a discount, and then sell the drugs onto the patient and medicare. And I believe that medicare, and all other insurance providers are required by law to pay the full cost of the drug, plus 10% to cover expenses? If I am wrong please correct me.

So let me postulate a patient requiring a course of chemo that would cost $100,000. Oncologist gets the drug at a 10% discount (I suspect I am being conservative) and bills for 110%, which would net him $20,000 per patient. From this he needs to pay all of his overheads incl. malpractice, staff, real estate and equipment. And this goes not just for medicare, but all insurance providers.

I'd love to know what the patient load of a US oncologist is.

Are there any oncologists who provide chemo in a hospital setting, where the hospital buys the drugs?

[weisssoccermom]

First of all, not all Medicare patients are in the over 65 group. People who are on SSDI are entitled to Medicare as well...after a 24 month wait. Remember that stage IV cancer patients as a few other groups get fast tracked for Medicare approval. Cancer patients on Medicare = higher costs.

I don't believe you are correct that insurance companies and Medicare are required to cover the cost of the drugs + 10%. Honestly, I could be wrong but have never heard that. Insurance companies negotiate with providers and others to cover procedures and drugs. For example, one insurance company might negotiate a price of (this is just an example) $50 for a 30 day supply of drug A. Another insurance company could very easily negotiate a different price.....both of which have nothing to do with the patient's copay or coinsurance. If a patient has no insurance, drugs can and do have a different price than what my insurance company is charged. As for the doctor purchasing the drugs at a reduced cost....I would also assume that that is a fact. In addition, remember (as the article stated), doctors can also receive rebates from the pharmaceutical company.

I would suspect that when a patient receives chemo as an inpatient, the hospital, not the doctor's office is the biller. I would doubt that the hospital would allow drugs from an outside source (even a doctor's office) to be administered in the hospital setting. Even when I go to the hospital, I can't bring my own thyroid medicine with me. Those pills are ordered from the hospital pharmacy and administered by the hospital staff. It only makes sense from a malpractice standpoint to have the hospital to be in control when the patient is in their facility.

[ColOrPan]

Don't forget that if an oncologist provides chemo at his facility, he has to have an oncology nurse. They are not cheap and understandably so. RN's work hard, they have to be disciplined and well organized. They deserve the big bucks, IMO.