Cancer clinics across southwest Ohio are struggling to provide drug therapies for many of their patients as a result of Medicare cuts in reimbursements for cancer drugs included in the government’s spending cuts known as sequestration.
The 2 percent cut in drug reimbursements not only applies to the average cost of the drugs but also the cost to store, handle and administer the drugs. That can make treatments cost-prohibitive for many private practices, which may be forced to send patients to hospitals or other skilled nursing facilities where treatments typically are more expensive.
“Our greatest concern is that when care is shifted from a private office into a hospital setting it causes a substantial increase in the overall cost of care,” said Dr. Charles Bane, an oncologist at the Greater Dayton Cancer Center. “Because medications are often more expensive when acquired by a hospital, the (insurance) co-pay portion for patients is often higher.”
Hospitals routinely mark up the prices of cancer drugs to cover facility costs and to make up for losses in other services they provide. The cost differential can be substantial when compared to drug treatments administered at a doctor’s office or clinic, Bane said.
“Chemotherapy treatments vary tremendously depending on the type of cancer we’re treating and the type of treatment the patient is receiving,” he said. “But costs ranging in the many thousands of dollars a month for chemotherapy are not unusual.”
Hospitals costs more
A recent study from the Washington-based consulting firm Avalere Health found average chemotherapy costs per episode — or the length of treatment — were $28,200 in a doctor’s office versus $35,000 in a hospital in 2012, a 24 percent difference.
The associated increase in out-of-pocket costs for cancer patients seeking treatment in hospitals can easily reach thousands of dollars a year, Bane said. That would have a disproportionate impact on those living on fixed incomes who are covered by Medicare — the government health insurance program for seniors and the disabled.
Joyce Kirby of Centerville is a breast cancer survivor who is among the estimated 85 percent of Ohio Medicare beneficiaries who are 65 or older. She has private supplemental insurance to cover any gap in Medicare coverage for the chemotherapy treatments she began receiving twice a week at the Dayton Cancer Center after undergoing a single mastectomy in February.
Still, she laments the government cuts that she fears will force many cancer clinics to close, which would displace Medicare beneficiaries at a time they’re fighting for their lives.
“If you don’t have the kind of insurance I have, it could be a life-and-death situation,” Kirby said. “To think that our government could come in here and say that we’re going to make it impossible for our doctors to keep all of their staff and keep their clinics open just doesn’t make sense to me.
“We’re blessed to live in this country,” she said. “But I fear we’re in danger of becoming a Third World country with lines around one building because they’ve closed all the other facilities.”
According to a recent survey from the American Society of Clinical Oncologists, almost a quarter of the 500 members surveyed indicated prolonged sequester cuts would force them to shut their doors.
Twenty-two percent of survey respondents said they had already closed satellite clinics. In addition, 50 percent of respondents said they had already begun to send Medicare patients to hospitals for chemotherapy, and nearly three quarters (74 percent) of respondents said they were having difficulty paying for chemotherapy drugs.
The survey was conducted from April 23 to May 1, less than a month after the sequester cuts took effect April 1.
Monitoring the impact
So far, most Dayton-area practices have continued to provide drug therapies for their Medicare patients despite the sequester cuts, said Robert Baird, chief executive of the Dayton Physicians Network, the largest oncology group in the area with 37 doctors and 15 locations stretching from Cincinnati to Troy.
“The way we’re handling it in our network right now is every month we’re monitoring the impact on certain medications, the ones that are underwater,” he said, referring to those cancer drugs for which the Medicare reimbursement is below cost.
“In some instances, we’ve been successful in finding (charitable) foundation support and other outside support to help with costs. And we’ve delayed a lot of the non-essential capital expenses and delayed hiring or replacing staff.”
Such cost-cutting measures are unsustainable in the long run, Baird said.
“We either have to absorb those increased costs for medications … or we can send them (cancer patients) to an alternative site for treatment like a hospital,” he said.
While referring patients to hospitals may help in the near term, it probably won’t be a viable long-term solution, Baird said.
“If we were to send even a third of our patients and transfer their care to a hospital setting, they couldn’t handle it,” he said. “They don’t have the staff; they don’t have the space.”
Mark Shaker, senior vice president at Premier Health Partners, agreed.
“If they closed Greater Dayton Cancer Center that would be a strain on our community, for sure,” said Shaker, who keeps close tabs on the hospital network’s outpatient infusion centers. “I don’t have capacity for that many patients. But we haven’t seen a huge influx yet, and I don’t think that’s imminent.”
Clinics cutting back
A recent survey of more than 500 members of the American Society of Clinical Oncologists found the automatic 2 percent budget cuts to Medicare chemotherapy drug reimbursements that took effect April 1 have had a significant impact on their practices and patients. Among the findings:
• 80 percent of survey respondents said that sequestration cuts have affected their practices.
• 74 percent of survey respondents reported having difficulty paying for chemotherapy drugs.
• 50 percent of respondents reported sending their Medicare patients elsewhere for chemotherapy, primarily to more expensive hospital outpatient infusion centers.
• Nearly 50 percent reported not being able to continue caring for Medicare patients unless they have supplemental insurance.
• 22 percent reported they have or will need to close satellite clinical or outreach clinics, assuming the sequester cuts remain in place.
• 14 percent reported having to stop taking Medicare patients altogether at the time of this survey.
Source: American Society of Clinical Oncology
We have closely followed the implementation and effects of sequestration and its impact on the local economy and the people who live here.