Changing Medicare incentives for the drugs doctors provide; Is this a good idea?

Changing Medicare incentives for the drugs doctors provide; Is this a good idea?

Change is hard, especially since the drug companies and doctors have had a free ride with the pricing of the drugs they provide  for chemo and other treatments.

Generally, doctors get a certain percentage of the cost of a drug, which by law is about 6 %, but it actually is just over 4%.   To get paid more, they recommend a pricier drug, or so it is thought.  In other countries, doctors routinely choose less expensive drugs and as we already know, according to the WHO, we are a very high cost medical society, yet our results are placing us around 47th in the world as far as healthcare quality and cost.

Doctors and drug companies are already formulating the narrative  to prevent any change from happening, but the Obama administration wants to change the incentives so doctors who recommend less expensive drugs get paid a flat fee plus 2.5%, essentially reducing the amount doctors are able to mark up a medication.

Of course, there is the other problem of having a Medicare drug law that has no government involvement in negotiating drug prices, leaving us with the highest drug prices in the world.

At 17.1 percent of our GDP going toward healthcare which is expensive, worse than other systems for its results and cost effectiveness, it is hard to argue that something needs to change now.

Is this going to help?   Only time will see, and the hollow arguments from the medical community on cost and reimbursement is likely part of the problem, but unless change happens, we will never know.  Meanwhile, groups such as AARP support these changes which are just hitting the tip of the iceberg.

Specialists in oncology and other professional groups who have benefited financially from the current law suggest that they are under paid by Medicare already, and this will harm their professions and force more doctors out of Medicare.

For those who live in NJ, in Middlesex county, it is hard to feel sorry for someone who on average earns $327K per year on average.  If they live in NJ, 327K does not make you rich, especially if you are paying off a loan of $350K for your schooling and for all the years you spent in school, however, why should being an Oncologist entitle you to mark up drugs that are already priced very high, without any proof they are any better than the less expensive ones.  In some cases, the older drugs may work better.

The truth is, especially in Oncology, until we are no longer using chemo, which has a lousy long term record, their tools are limited so why are we paying a premium for old technology with a new name which does not actually cure the disease in most people.  Most Oncologists would love to have new and better treatment approaches which are now being developed, but are not yet approved for widespread use.

If the Oncologist saw their salary drop a certain percentage due to this Medicare change, along with other specialty providers who provide drugs to their patients, and they still made a great salary, are they really underpaid or are we trying as a society to adjust the cost of care which has not been appropriately questioned?

Having to make healthcare choices is hard enough as a patient, but having to sort for what is best for us as patients should be an unbiased opinion from our doctors.  Simply stated, they should choose the most cost effective therapy without any bias based on how they may be rewarded financially.

You can read more about this discussion on USA Today here

Medicare change: ‘Perverse’ incentive or ‘perverse’ reform?

By Jen Christensen, CNN Mon April 11, 2016

If you have cancer or Crohn’s disease, does the doctor give you the best drug to fight that illness, or are you getting the drug that makes your doctor the most money?

That’s what a proposed pilot program for Medicare is trying to figure out and it’s become a political hot potato. Powerful voices on either side of the debate describe the current system and the possible change as “perverse.”

The United States spends more on health care than any other financially similar country in the world and yet we are still sicker than these other countries. While we spend about 17.1% of our GDP on health care and we don’t live as long, we have a higher rate of chronic disease and more American babies die than in these other countries.
A large part of what makes our health care so expensive is the high cost of prescription drugs. Americans pay more for in-patent prescription drugs than all other countries studied, research from 2013 found. In part, that might be because American doctors are prescribing new drugs and more expensive drugs compared to their foreign counterparts.
While the market largely regulates what we pay for drugs, the Obama administration has proposed a new experiment it hopes will drive down some of the costs.

The experiment involves a five-year pilot program that would change the way doctors are reimbursed for prescribing certain drugs under Medicare Part B. The program would test to see if doctors would chose less expensive drugs to treat cancer patients and other patients who need injectables. That includes people who need treatment for macular degeneration, rheumatoid arthritis and Crohn’s disease. These patients and their drugs account for a large percentage of the cost of Medicare Part B. If the administration could reduce the amount spent on these drugs, it could save taxpayers a significant amount of money.

The way the current law works, doctors can be reimbursed the current sales price of a drug, plus 6%. The actual rate paid now is a little lower, at 4.3%. In either case, if a drug is more expensive, the doctor is reimbursed more. If doctors use a $13,000 drug, as a opposed to a $3,000 drug, they will be reimbursed more. In a conference call with reporters in March, Dr. Patrick Conway, the Centers for Medicare and Medicaid Services chief medical officer, called the current system a “perverse incentive structure” that “doesn’t benefit patients or the system.”

The pilot program would test the theory that doctors or outpatient clinics might prescribe more of these expensive drugs, not because they are better treatments, but because the doctor makes more money.

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