The Oncology Concession Under Attack by Health Insurance Companies

The oncology concession is the percentage of the cost of chemotherapy (i.e., the drug markup) that is retained by the oncology group for prescribing the drug (see: Academic Oncology and the "Chemotherapy Concession"). These are a number of problems associated with such a payment not the least of which are the following: (1) there is an incentive for an oncologist to treat the patient with advanced disease with little hope of significant amelioration of it; and (2) there is an incentive to treat the patient with newer, non-standard biotech drugs that are frequently more expensive. Health insurers are now evaluating new oncology payment systems in order to remove these perverse incentives (see: Insurers Test New Cancer Pay Systems). Below is an excerpt from the article:

The insurers have begun tightening oversight of the care provided to patients with many different types of cancer, hoping to lower expenses by experimenting with new ways to pay specialists. UnitedHealthcare plans to announce on Wednesday a one-year project with five oncology practices, offering doctors an additional fee. The new fee is meant to encourage doctors to follow standard treatments rather than opting too often for individualized and unproven courses of therapy, which can include the most expensive drug combinations. By proposing a different type of payment structure, companies hope to lower doctors’ dependence on a system that generates substantial sums for cancer specialists who routinely favor top-of-the line treatments.....Many specialists favor the most aggressive care even if there is little to no evidence the patient will benefit, because both doctors and patients have every incentive to spare no expense. Patients and their families often demand one last treatment. And oncologists can reap tremendous profits, sometimes earning more than half of their income on the difference between what they pay for chemotherapy drugs and what they charge the insurers for the patient’s treatment plan.....Some insurers say there may be savings if doctors just follow standard treatments, rather than a variety of alternative regimens, for patients with the same type of cancer.....In the UnitedHealthcare program, for example, oncologists still get a fee even if the patient is not getting chemotherapy. To make sure no one is stinting on care, the oncologists involved review one another’s treatment decisions and results. The doctors involved in the program say there is no danger that they will fail to treat patients who would benefit from another round of chemotherapy.

The pilot program described above makes perfect sense to me. However, the article contains some code-speak that require some interpretation. Standard treatment, which is what the insurance companies are attempting to reimburse for, can be alternatively described as proven treatment regimens. My guess is that if oncologists were to use the terms proven and unproven to refer to the, say, two chemotherapy regimens being offered to a patient, most patients would choose the former. I also don't think that all patients with far advanced lesions should be treated. However, some of this decision-making can be based on subtle nuances of how the treatment (or non-treatment) options are presented to patient and the family by the oncologist. If as much of half of an oncologist's income is based on which type of chemotherapy is administered, an arched-eyebrow or frown by him or her can make a big difference. I would like to move to an environment where what's best for the patient always rules the day.

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It's quite bad to remove incentives of oncologists.If any oncologist is doing a great job then he/She should get an incentive.Insurers should be careful here.