Reimbursements for cancer drugs are often calculated at the average sales price plus 6 percent. But this often isn’t enough for oncologists who purchase in smaller quantities at higher prices.
As the country weathers an economic downturn that’s leaving people without jobs and unable to afford health insurance, Thomas Handler, a research director at Gartner, says patients in both rural and urban settings aren’t able to pay for cancer drugs – and that, in turn, affects.
“I hate to think that oncology is being hit harder than others,” said Handler. “Treatments really are fairly expensive. I don’t know anyone who can afford it without insurance.”
He noted that many small physician practices are merging with larger groups or hospitals in order to survive. Healthcare information technology and bulk drug purchases are managed more easily in larger groups because there’s more funding.
Handler said government pricing could be on the horizon, although he noted that step “has been problematic in the past.”
“I worry that this is a sign for the future, we need to address it now,” said Shannon Penland, MD, of Jefferson Medical, a multi-specialty practice that employs about 14 physicians in Laurel, Miss. “It’s a government problem. We have a Medicare system that just doesn’t make sense. It definitely affects how you prescribe.”
Penland says Jefferson Medical is thriving and busy – “It’s profitable, and busier than the past” – but as of December 2008 the practice was facing an approximate $300,000 deficit.
The deficit arose over a six-month period, she said, and declining drug reimbursements were at fault.
Daniel Scullin, MD, of Louisville, Ky., has taken a pay cut of more than 15 percent to keep his practice afloat. He has also adopted high deductible health plans for employees who need benefits and instituted a hiring freeze.
“I think that the payer mix plays a big role in how practices can make ends meet,” Scullin said. “The thing that concerns me the most is the patient’s access to care.”
“The patients that we can’t afford to treat, they go to the hospital,” Penland said. “Because oncology is needed here, we’re going to find a way for it to work.”