A Call to Eliminate 'Chemotherapy Concession'

Nick Mulcahy

January 02, 2013

A new study confirms that financial incentives exist for some US oncologists in the prescribing of chemotherapy and growth factors for treatment-related anemia.

These potential "inducements" are not widespread, existing for only about 25% of 480 medical oncologists surveyed, and are mostly among fee-for-service clinicians or those with financial incentives in their salary structure, found the authors, who were led by Jennifer Malin, MD, PhD, of the University of California, Los Angeles. She is also medical director of oncology of WellPoint, a managed care company headquartered in Indianapolis, Indiana.

Such financial incentives need to be "decreased" because they may be contributing to rising cancer costs, Dr. Malin and colleagues explain.

"Eliminating the chemotherapy concession" is a "potentially effective solution" to these financial temptations, the authors write in the discussion section of the study, which was published online December 26th in the Journal of Clinical Oncology.

The chemotherapy concession describes the process whereby oncologists buy their own stock of drugs and then mark up the cost when billing payors for their administration. "Specialty pharmacy programs" that work in tandem with payors could supplant this concession by supplying clinics with drugs, effectively eliminating the "buy and bill" process, say the authors.

The chemotherapy concession accounts for approximately 65% of revenue in a typical oncology practice, "dwarfing the income from evaluation and management," write the study authors, citing other research.

Another expert sees the same problems as the study authors but stops short of calling for an end to the chemotherapy concession.

"The current system is set up to reward prescribing more," writes Yu-Ning Wong, MD, of Fox Chase Cancer Center in Philadelphia, Pennsylvania, in an editorial accompanying the article.

"Uncoupling the relationship between prescribing patterns and income may be an important step in controlling cancer costs," she also writes.

However, in comments made to Medscape Medical News, Dr. Wong emphasized that "we need to talk about how we pay for cancer care as a whole, not just how we pay for intravenous chemotherapy."

We should not cut the reimbursements for intravenous chemotherapy... Dr. Yu-Ning Wong

Furthermore, she said that "we should not cut the reimbursements for intravenous chemotherapy without increasing reimbursement elsewhere to pay practices for the work they need to do to care for the patients."

For example, said Dr. Wong, there have been 7 new drugs approved for the treatment of metastatic kidney cancer since 2005, but only 2 are intravenous. The remaining 5 are oral drugs, but they still have the potential to cause side effects such as hypertension, diarrhea, skin rashes, and fatigue.

"Oncologists are still responsible for managing these toxicities, yet unlike intravenous chemotherapy, they don't get reimbursed for the administration," she said.

"We need to think about how to fairly compensate a practice for the work they do to care for cancer patients," Dr. Wong commented.

Study Reported Perception of Financial Gain

The new study is not proof that oncologists made more money by prescribing chemotherapy and growth factors, says Dr. Wong.

The survey upon which the study is based only asked clinicians whether they perceived that their income would rise if they prescribed chemotherapy and growth factors.

Nevertheless, it is important research because it indicates that financial incentives might matter, she says.

"If oncologists think that they will make more money by prescribing more, perhaps they will write more prescriptions," Dr. Wong points out.

The study also found that there was an association between practice type and perceived financial benefits.

Compared with medical oncologists who were paid a fixed salary, those who were in fee-for-service practices or who were paid a salary with a productivity incentive were more likely to anticipate greater income if they administered chemotherapy (odds ratio, 7.05 and 7.52, respectively; for both, P < .001). Similar associations were found for growth factor administration.

Overall in the survey, 40% to 50% of physicians whose incomes were based on fee for service or who received a salary with productivity incentives indicated that their income would increase when they prescribed chemotherapy or growth factors.

Dr. Malin and her coauthors used data from the Cancer Care Outcomes Research and Surveillance study (CanCORS), which examined care delivered to more than 10,000 patients initially diagnosed with lung or colorectal cancer from 2003 to 2005; these patients were living in northern California, Los Angeles County, North Carolina, Iowa, or Alabama or received care in 1 of 5 large health maintenance organizations (HMOs) or 15 Veterans Health Administration (VHA) sites. Data that were collected included physician surveys.

Problems With Specialty Pharmacy

The study authors acknowledge that there are "many challenges" related to implementing specialty pharmacies in oncology, "including issues related to storage, administration, and concerns about waste if site-of-care laboratory testing indicates that the drug should not be given."

Both the authors and Dr. Wong discuss other options to reduce potential financial incentives in the medical oncology setting.

"Another approach that has been proposed involves paying providers for episodes of care (eg, adjuvant therapy for stage III colon cancer) in which the payment would cover all costs of care, including chemotherapy and supportive care drugs," write the study authors. "The impact of this and other similar approaches on the cost and quality of cancer care is not yet known."

Dr. Malin is an employee of WellPoint and is a consultant to Onyx Pharmaceuticals. Dr. Wong is a consultant to Independence Blue Cross and has a research grant with Aetna.

J Clin Oncol. DOI: 10.1200/JCO.2012.43.6063, 10.1200/JCO.2012.46.6169. Abstract, Editorial