Now Doctors are Turning Away Cancer Patients

According to an article in the Washington Post on April 3, 2013, doctors are now turning away cancer patients who can’t pay out of pocket. We previously reported how MD Anderson, a leading cancer hospital in Houston, Texas demanded an upfront payment in cash from Sean Recchi before he would even be admitted to the hospital and about the mind boggling expense of prescription drugs. The patient by the way had health insurance. The admitting agent told him, “We don’t take that kind of discount insurance.” Fortunately, a family member was able to write the check for $83,900. that was demanded before treatment would begin.

Now doctors are doing the same thing – refusing to administer life saving drugs to Medicare cancer patients using the rationale that they they would be losing money because their payments from Medicare are reduced 2% by the sequester. To hear the doctors tell it, they would be put out of business by the smaller payment. However, a little simple math (something that neither the complaining doctors or the writer of the Post article evidently can do) shows that the doctors would still be making money even with the reduced payment. And since they have a ton of other ways to bill patients over and above the bill for the administration of the drug, they still would be making plenty of money. They are just miffed that they wouldn’t be making quite as much money as before so they are taking a page out of the hospitals’ book and demanding payment or at least the difference in payment in cash from the patient upfront before administering the drugs.

“If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. “The drugs we’re going to lose money on we’re not going to administer right now.”

That’s absolute poppycock and here’s why. Medicare is subject to a 2% reduction under the sequester. Doctors are paid the average of what the pharmaceutical companies charge for the drug which is outrageous in itself but no skin off the doctor’s nose. In addition doctors were paid an additional 6% for storing and administering the drug.

Say a drug cost the doctor $10,000. for one dose (not atypical of today’s prices which can be at least double that amount for some drugs). So the doctor would be paid $10,000. + $600. or $10,600. prior to the sequester. After the sequester the doctor is now being paid 2% or $212. less. So the doctor is paid $10,388. The doctor pays the drug company $10,000. and is left with $388. How is this losing money?

However, Vacirca stated that from now on his clinic would start turning away a third of their patients under the ruse that the more expensive the drug, the more money they would lose. But the simple math above belies that fact. In fact the more expensive the drug, the more money Vacirca’s clinics make for doing the same thing – administering a shot. It costs the doctor no more time or effort to administer an expensive shot than it does to administer a cheap shot. Moreover, the doctor will receive more money from Medicare for the expensive shot than for the cheap shot because he is paid on a percentage of cost basis. Vacirca, however, wants you to believe that the 2% reduction on the price of the drug swallows up the 6% the doctor formerly made. Not so. As the drug gets more expensive, the percentage the doctor gets for administering the drug also increases so that the final result is that the doctor makes more money not less.

The Post reported: “Doctors at the Charleston Cancer Center in South Carolina began informing patients weeks ago that, due to the sequester cuts, they would soon need to seek treatment elsewhere.”

Doctors’ advocacy groups are petitioning Congress to lower the amount that the sequester takes out of their payment. Of course if the Federal government wanted to, it could force the pharmaceutical corporations, Big Pharma, to lower prices or to negotiate prices, something that the Bush administration refused to do when they enacted Medicare Part D drug coverage.

So the doctors who can’t do simple math (or maybe they can but are just trying to pull the wool over Congress’ eyes) are lobbying Congress (who most certainly aren’t capable of doing simple math) to come to their aid and increase the amount they get for administering a dose of a life saving cancer drug. The doctors are saying that the hospitals could possibly take on the patients they are rejecting, but we’ve already seen how hospitals are demanding upfront cash payments from patients so the chances of non-profit (although they make tons of profit) hospitals taking up the slack are about the same as a snowball’s chances in hell.

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John Lawrence

John Lawrence graduated from Georgia Tech, Stanford and University of California at San Diego. While at UCSD, he was one of the original writer/workers on the San Diego Free Press in the late 1960s. He founded the San Diego Jazz Society in 1984 which had grants from the San Diego Commission for Arts and Culture and presented both local and nationally known jazz artists. John received a Society of Professional Journalists, San Diego chapter, 2014 award. His website is Social Choice and Beyond which exemplifies his interest in Economic Democracy. His book is East West Synthesis. He also blogs at Will Blog For Food. He can be reached at j.c.lawrence@cox.net.

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