Another Slippery Slope to Make Healthcare Affordable! But to What Ultimate Result?


Alison Kodjak wrote an interesting article pointing out that Medicare is going to test new ways to reimburse doctors for medications, in hopes they’ll choose less expensive drugs.

The plan would alter Medicare Part B, which pays for medicines administered in doctors offices or outpatient hospital clinics — to eliminate incentives for doctors to use the most expensive drugs.

The changes would have an outsize effect on cancer doctors and clinics. Medicare Part B shelled out about $7.8 billion on cancer drugs in 2014, or 42 percent of its total spending on drugs that year.

The program now reimburses the doctors or clinics for the cost of the medication plus a 6 percent fee. That means doctors and hospitals earn more money when they use pricier drugs. This in itself in worrisome and may lead to some new restrictions in the medications that are needed or more effective.

As it is now, Dr. Patrick Conway, chief medical officer for the Centers for Medicare and Medicaid Services, called the reimbursement structure “perverse.”

“We’ve heard from oncologists who feel pressure from their health system to pick higher cost drugs even when they are not appropriate for a patient,” he said in a conference call with reporters on Tuesday. But I just mentioned the reaction from the economists when they starting looking at the bottom line may be restrictions on the best medications for less expensive drugs as we are seeing in other countries with “Socialized Medicine.” For the good of all and sustainability the Government starts restricting medications or makes the patient out of pocket.

The agency plans to test a reimbursement formula that would pay the cost of the drug, plus a 2.5 percent surcharge and a flat fee of $16.80.

Under the current system, a doctor earns just 60 cents for administering a $10 medication. An equivalent drug that cots $1,000, however, would bring in $60. Under the proposed formula, the cheaper drug in this example would generate a payment of $16.93 and the second one $41.80, according to CMS.

CMS officials say that change would mostly eliminate the incentive to choose a high priced drug over one that may be more appropriate. Medicare Part B spent about $20 billion on outpatient medicines last year. What is more appropriate and how is that determined?

“We’re trying to align the incentives to what’s best for patients and doctors,” Conway said.

The Medicare Part B plan would also reduce or eliminate the share of the drugs’ costs that patients have to pay.

Dr. Peter Bach, director of The Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, says research shows doctors prescribe higher priced drugs when they bring in more profit.

“It is refreshing to see Medicare move towards an experiment where they pay for drugs using a flat fee reimbursement, where what doctors and hospitals make is related to giving the drug, not how much it costs,” Bach said in a statement to Shots.

But other cancer doctors aren’t so thrilled.

The American Society of Clinical Oncology opposes the CMS proposal. The proposal could have a major effect on oncologists because many cancer patients receive their chemotherapy treatments in doctors’ offices or clinics.

“It is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques,” said ASCO CEO Allen Lichter in a statement posted on the physician group’s website.

ASCO, the Pharmaceutical Research and Manufacturers Association and about 100 other physician and advocacy groups sent a letter to Health and Human Services Secretary Sylvia Burwell last week opposing the payment changes.

“The Centers for Medicare & Medicaid Services (CMS) has released a proposed rule outlining a demonstration project that would modify drug reimbursement based on zip codes in certain regions of the U.S. The American Society of Clinical Oncology (ASCO) believes that it is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques.

“ASCO has long advocated for comprehensive payment reform to achieve high-quality, high-value care for every patient with cancer, and we hope the Administration will reconsider the narrowly focused proposal today’s announcement appears to pursue. Physicians did not create the problem of drug pricing and its solution should not be on their backs.

“ASCO is currently assessing the full impact that the CMS proposal will have on the ability to provide patient-centered cancer care to all Medicare beneficiaries who need it, and will send detailed comments to CMS. The society will not yield in its push for a more rational drug reimbursement system and real payment reform.”

The summary of this letter is “We believe that this type of initiative, implemented without sufficient stakeholder input, will adversely affect the care and treatment of Medicare patients with complex conditions,” the letter said. One of the things that we have seen and I am an example was when I had to lecture in Canada and was given the cheaper drug…with the horrible complication of suicide ideations. That is, wanting to commit suicide after the cheaper drug was “required.”

The agency plans to field-test the new reimbursement formula, as well as a handful of others ideas, in different regions of the country starting later this year. CMS will then compare the results to determine which changes are effective at reducing drug spending.

CMS is also planning to test a handful of so-called value-based pricing ideas. The first would pay for drugs according to how well they work.

For example, if a cancer medication is very effective in eliminating a specific tumor, but is also used on a second, different condition with less success, Medicare will pay less when it is used for the second condition than the first. Sloan Kettering’s Bach, who served as an adviser to CMS on cancer policy in 2005 and 2006, argued for varying payments for drugs this way in a 2014 paper published in JAMA, the Journal of the American Medical Association. The approach is called indication-based pricing.

The agency also plans to work with drug makers to link prices to patient outcomes, perhaps paying less for medications when patients end up being admitted to a hospital.

To me and many others who study healthcare and who treat patients, this is where the problems lie. Pharmaceutical companies charge exorbitant prices for drugs blaming it on the cost of FDA approval, getting the drug to market and the liability costs that they are exposed to in the USA. So, I say this is the cost of doing business here in the US, but maybe we need to find a way to lower these costs. Why do other countries have lower prices on the same drugs?….malpractice and the cost of investigation, before they can bring the drug to market? This needs to fixed! However, no candidate for office speaks about these issues. Why? They would anger some of the SuperPacs who donate to their campaign.

Private insurers and pharmacy benefit managers have been testing similar ideas.

Cigna last month said it had agreed with drug maker Novartis on a pay-for-performance deal for the heart failure drug Entresto. Under the agreement, Cigna will pay less if patients taking the medication are hospitalized for heart failure.

And Express Scripts, the biggest manager of pharmacy benefits, says it’s working with cancer drug manufacturers to pay indication-based prices that tie cost to how well the drugs perform.

The CMS proposal is open for public comment until May 9. Conway said the field tests would begin after the comment period is complete.

Another drug related article, which I thought was important to point out this week was the CDC recommending that physicians restrict the use of narcotics in the chronic pain patient. This is a no brainer and should have been done long ago.

Why hasn’t it? Greed. The pain practices and drug companies make money on treating pain with drugs and it has created a new industry…Drug Treatment Centers who just dole out the drugs, but with different names. And for the physician and patient sometimes it is the easiest route to pain relief….with a buzzzzz!

Some times I just don’t know whether we are going to ever make any progress in the Heroin/narcotic addition problem the hangs over all of our communities.

Addiction medicine experts Tuesday welcomed the CDC’s recommendations, which zeroed in on the importance of avoiding opioid prescriptions as the first line of treatment for patients with chronic pain. Prescription opioids have driven the current controlled substance abuse epidemic, as well as the recent resurgence in heroin use.


The CDC recommends that doctors prescribe over-the-counter pain medications, exercise and behavioral treatments before using opioids. When opioids are prescribed, the CDC suggests beginning with low-dose versions of immediate-release pain relievers rather than prescribing the long acting, extended-release opioids. That reduces the chance of misuse or abuse of those drugs.

CDC Director Dr. Tom Frieden said the guidelines should offer physicians safe treatment options for patients with chronic pain, who make up only 5% of long-term users of opioids but account for 70% of all prescriptions for pain relievers.

“Changing medical practice isn’t quick, and it isn’t easy,” Frieden said. “But we think the pendulum on pain management swung way too far toward the ready use of opioids.”

And in fact, the guidelines are a return to an older practice of medicine.

Physicians trained in the 1960s and 1970s—amid a wave of urban heroin use—were taught to reserve opioids for the most severe forms of pain, such as cancer or end-of-life care. That approach remains accepted.

But in the 1990s, some specialists argued that doctors were undertreating common forms of pain that could benefit from opioids, such as backaches and joint pain. The message was amplified by multimillion-dollar promotional campaigns for new, long-acting drugs like OxyContin, which was promoted as less addictive.

One current hurdle to curbing the number of prescriptions is that it’s much easier for a busy clinician to prescribe a 30-day supply of oxycodone or Percocet to treat a patient’s chronic pain than it is to convince him or her to do physical therapy. The time constraints affecting physicians’ practice has never been more acutely felt than in this era of healthcare reform that emphasizes quality and value-based payment.

According to the CDC, healthcare providers wrote 249 million prescriptions for opioid pain medications in 2013. Such wide availability of opioids since the 1990s has led to a drug abuse epidemic that has affected almost every part of the U.S.

The number of drug overdose deaths increased by 242% between 1999 and 2014, according to the National Institutes of Health. Drug overdoses killed more than 46,000 people in 2013, killing more that year than car crashes.

The CDC guidelines also recommend clinicians review data through state prescription drug monitoring programs before starting a patient on opioid therapy and check it periodically while they are being treated to determine if a patient is receiving doses that could put them at risk for overdose.

Providers have been critical of prescription drug monitoring programs. They say mandating a review of state-run drug prescription databases could lead to inaccurate information and would be an administrative burden for them. They also have said frequent prescription changes might reveal a lack of coordination among providers, not drug abuse.

According to Dr. Gail D’Onofrio, chair of Yale School of Medicine’s emergency medicine department, improving opioid prescribing practices of primary-care physicians must involve education and the resources needed to find evidence-based pain care alternatives.

“I can’t just say to a patient, ‘Go and get some acupuncture,’ ” D’Onofrio said. “We really need to have more of an integrated service between primary care and pain management that lines together and looks at these patients and sees what would be the best options for them.” And we all have to weigh the possibilities of the addiction factor and not just leave it up to the State or new industry of drug treatment center, never getting these patients off the narcotics. Consider that many States and many pharmacies are backing plans to make some of these narcotic reversal agents over the counter available.

My philosophy is that by accepting our mistakes half the problem is solved. Denial perpetuates errors. Accidents, poor judgment, callousness, incompetence, errors in patient encounters are welcome too as long as it doesn’t get you in trouble.

Many times we drop the ball. Many times we keep mum when we see an injustice. After all we are humans too!

We need to get real in our approach to this addition epidemic. We are wasting too much money and way too many lives in this battle!

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