Academic Oncology and the "Chemotherapy Concession"

I recently came across an article discussing the difficulty in recruiting academic oncologists that brings to light some issues that are not commonly discussed in the literature (see: Why Academic Divisions of Hematology/Oncology Are in Trouble and Some Suggestions for Resolution). Below are two excerpts from it:

Academic divisions of hematology/oncology seem to have difficulty recruiting and retaining excellent productive clinicians. A major reason for this is that salaries do not compete with the private sector for similar work....The academic salaries are approximately one third of practice because the chemotherapy concession has been given to the academic hospital. In addition, there may be substantial problems in under-billing, lack of attention to detail in billing, and poor collection practices....Academic practice still has much to offer, including opportunities for research and multidisciplinary team management, although the differences may narrow over the coming years. Attention to detail in the billing, collection for work performed, and increasing academic salaries to levels nearer to private practice are necessary components of the solution to recruit and retain quality productive clinicians.
                                                   (and)
Chemotherapy is the only commodity sold from doctors’ offices. Some of our internist colleagues are incredulous that so much of the income comes from chemotherapy (one calls this "the dirty little secret" of oncology.) The ethics of this arrangement are complex, however. Without the revenue from chemotherapy, the office cannot run because so much nursing and support staff is needed; with it, the doctor has a potential conflict of interest to give chemotherapy and concentrate less on evaluation and management. It also means that without this concession, academic oncologists will never approach more than one third of private practice income.

One of the issues raised in this article is that oncologists are attracted to private practice because it is more lucrative due to the chemotherapy concession. This is the markup on the administration of chemotherapeutic agents to cancer patients that is paid to physicians in private practice -- it can be very lucrative. As succinctly noted in the second paragraph below, "chemotherapy is the only commodity sold from doctors’ offices. Here's more revelatory details about the chemotherapy concession from another article on the web (see: It's Still A Chemotherapy Concession):

Not only do the medical oncologists have complete logistical, administrative, marketing and financial control of the process, they also control the knowledge of the process. The result is that the medical oncologist selects the product, selects the vendor, decides the markup, conceals details of the transaction to the degree they wish, and delivers the product on their own terms including time, place and modality.

Hold on to your hats. The second issue raised above is that the employers of academic oncologists, the hospitals in which they practice, keep this concession money for themselves and underpay their oncologists, at least compared to the private sector earnings and in the opinion of the author. The third issue is that this oncology concession provides an incentive to treat/over-treat patients, particularly with very expensive drugs. This is referred to in the second paragraph delicately as "a potential conflict of interest." I raised this latter issue in a previous note (see: Some Tips for Selecting a "Good" Doctor and a "Good" Hospital) in which I advised readers with life-threatening problems such as cancer to seek care in academic cancer centers in order to avoid this conflict of interest and perhaps avoid over-treatment.

As to the problem of hospitals retaining most of the "oncology concession" revenue, there is not much that can be done about it. I believe that most private practice will soon disappear as the result of the triple juggernaut that we are facing: Big Pharma, Big Health Insurance, and Big Hospital Systems. As a whole, they constitute Big Medicine (see: Physician Private Practice Declines; the Last Barrier to Emergence of "Big Medicine"). Almost all physicians will soon be working in some manner or other, directly or indirectly, for hospital systems. I also suspect that the "oncology concession" will soon diminish. This will be the inevitable result of negotiations between Big Pharma, Big Health Insurance, and Big Hospital Systems about how much it's really worth to treat cancer patients and with what chemotherapeutic agents

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