UnitedHealth Group Inc., the biggest U.S. health insurer by sales, will pay cancer doctors to stop marking up the prices of drugs, in a test aimed at reducing costs for medical plans and their customers.
Physicians serving 1,500 cancer patients in Georgia, Missouri, Ohio, Tennessee and Texas will receive reimbursement for the wholesale cost of medicine they administer, plus a fee that will stay the same regardless of the drugs involved, UnitedHealth said today in a statement.
That will erase an economic incentive for doctors to prescribe more-costly drugs, as physicians now buy the medicines from drugmakers and charge as much as 30 percent more when submitting claims to insurers, said Lee Newcomer, UnitedHealth’s senior vice president for oncology for UnitedHealth, based in Minnetonka, Minnesota. Cancer drugs account for 60 percent of income for oncologists, Newcomer said.
“If they are using expensive drugs, that’s OK -- we’re going to reimburse for the cost of that,” Newcomer said. “But they’re not going to make any more or less profit off of it, and we’re not going to pay inflated prices for a drug.”
Newcomer said it’s unclear how much money the experimental system may save UnitedHealth. Its commercial insurance unit, UnitedHealthcare, spent $1.1 billion on injectible chemotherapy drugs in 2009, about a quarter of the company’s cancer-care spending, he said.
Thursday, October 21, 2010
UnitedHealth Alters Pay Rules on Cancer Treatments - Bloomberg
via bloomberg.com
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Typically, doctors give patients prescriptions for drugs that are then filled at pharmacies. But medical oncologists bought chemotherapy drugs themselves, often at prices discounted by drug manufacturers trying to sell more of their products and then administered them intravenously to patients in their offices.
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.
A patient wants a physician’s decision to be based on experience, clinical information, new basic science insights and the like, not on how much money the doctor gets to keep. A patient should know if there are any financial incentives at work in determining what cancer drugs are being prescribed.
Some oncologists prescribe chemotherapy drugs with equal efficacies and toxicities. I would imagine that some are influenced by the whole state of affairs, possibly without even entirely admitting it. Social science research shows that people can be biased by self-interest without being aware of it.
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