Protect Our Nation's Cancer Care System
A few weeks ago the Medicare Payment Advisory Commission (MedPAC) made a huge mistake. It voted to recommend Congress numerous changes to the way drugs are paid for under Medicare Part B. The biggest change would move physicians away from the existing system where they are paid based on the average sales price (ASP) of drugs plus a 6 percent markup to cover administration and other expenses. The proposal would drop payments over wholesale cost to just 3 percent in 2018 as well as introduce a drug formulary whose prices have been negotiated by third-party vendors.
If implemented, the most recent MedPAC recommendations will continue the slow death of our nation’s cancer care system through poor public policy. They will add fuel to the fire that has been raging for more than a decade, pushing cancer patients away from the local, affordable community oncology clinics, and forcing them into the much more expensive hospital setting.
Before 2004, the cancer care delivery landscape was incredibly stable, with 84 percent of chemotherapy delivered in independent, physician-run community cancer clinics, like my own. However, as the actuarial firm Milliman noted in a study published last year, by 2014, there had been a dramatic shift in the site of cancer care delivery: Only 54 percent of chemotherapy was being delivered in community cancer clinics. The remainder had moved to the far more expensive hospital outpatient setting.
The reasons for this are a textbook example of the unintended consequences of bad public policy. It all started with the Medicare Modernization Act’s dramatic change to Part B drug reimbursement in 2003. This was compounded further by the Centers for Medicare and Medicaid Services’ (CMS) decisions that cut drug reimbursements by including wholesaler prompt pay discounts and the Medicare sequester in calculating reimbursements. These cuts devastated community oncology practices while hospitals found an elephant-sized loophole in the 340B Drug Discount Program that actually increased their profit.
The MedPAC recommendations ignore those of us on the frontlines who see the dismantling of the independent community cancer care system every day. If approved and implemented, these misguided recommendations will continue its destruction, consolidating care into the much more expensive hospital setting, and only increasing Medicare Part B spending. How much more expensive? Consider this startling statistic: in 2014 alone, Milliman found that it cost Medicare $2 billion more to provide cancer treatment in hospitals than if it had remained at a physician-run community cancer clinic.
The impact these polices have had on our nation’s cancer care system will only grow if the recommendations are implemented. For example, according to the Community Oncology Alliance’s 2016 Practice Impact Report, in New York, 30 community cancer clinics have been acquired by hospitals and 12 have closed completely since 2008. On a national scale, the causalities are much greater, with 380 practices closing and another 609 acquired by hospitals. Patients are the ones suffering most as they have less access and are paying more for their care.
MedPAC, and the Congress it advises, should look to the practices and providers themselves for solutions, not distant bureaucrats in ivory towers. Community oncology practices understand the realities and problems of the increasing cost of cancer care. We are seeking solutions using data, market facts, and the real-world medical experience of physicians, nurses, administrators, and others seeking to craft viable, patient-centric solutions. This includes participation in the Centers for Medicare & Medicaid Innovation Oncology Care Model, the development of the Oncology Medical Home concept, and numerous other public and private initiatives. We know what works – but if policymakers ignore us, they will be doomed to repeat the failures of history.
MedPAC’s Medicare Part B payment proposal will backfire. It will encourage more Medicare spending and cancer patients will suffer. MedPAC and Congress should change course by looking at the real world of cancer care, with a critical eye toward doing what is best for taxpayers and, most importantly, patients.
Dr. Vacirca is a practicing oncologist, CEO of NY Cancer Specialists in Long Island, NY, and president of Community Oncology Alliance.