There is an article on the front page of this morning’s Wall Street Journal describing the experiences of a Texas woman diagnosed with acute leukemia who had to come up with hundreds of thousands of dollars before she could be treated for her life-threatening disease.
The basic premise of the article is that hospitals are no longer going to treat first and bill later. The rising number of uninsured patients and those who do not pay their bills is reportedly creating an increasingly severe burden on non-profit hospitals, which in the past would have absorbed the costs.
I can’t say that I am surprised that this is going on. I am surprised that it has taken so long for the issue to get attention.
The costs of cancer treatment are escalating, in some cases--such as with the newer targeted therapies—substantially.
For example, based on some preliminary data that I have seen recently, the Medicare Part B program experienced a 36% increase in expenditures for bevacizumab (Avastin) from 2006 to 2007. This drug is widely used in the treatment of an increasing number of cancers (it was recently approved, for example in the treatment of advanced breast cancer). The actual numbers went from $456 million in 2006 to $621 million in 2007. This was in the face of a decreasing number of Medicare part B beneficiaries.
Other new drugs had similar large increases in costs to the Medicare program year over year. For one drug, natalizumab (Tysabri, which is used in the treatment of multiple sclerosis), although the numbers were smaller in absolute terms, the relative increase in cost to Medicare went up almost 800% year over year.
On the other hand, because of increased concerns and scrutiny of ESAs—which are drugs used to increase red blood cell counts in patients with cancer—Part B Medicare payments for these drugs decreased from $1.79 billion in 2006 to $1.47 billion, or about 18%, from 2006 to 2007.
(If there is any good news here, it is that the increase in costs of chemotherapy in the Medicare program “only “ went up $1.9 billion from 2006 to 2007 compared to an increase of $2 billion from 2205 to 2006. But that doesn’t take into account the decline in the number of beneficiaries who have transferred out of part B to Medicare Advantage HMO programs.)
These are big numbers, but more importantly, these are costs that are much less easy for hospitals and doctors to ignore, since they have to pay for the drug themselves before they can give it to a patient.
At hundreds of thousands of dollars of out-of-pocket costs, it doesn’t take long for a hospital or doctor to become much more concerned about their unreimbursed costs of care.
Health care professionals have always given their time for charitable care. However, as the demands for charity increase or people don’t have any health insurance or that insurance is inadequate, the margins available from other patients who pay for their services are decreasing, in no small part because of declining Medicare payments and managed care contracts.
If people decide they don’t want to pay a medical bill—maybe they don’t have the money, or maybe they think the charge is outrageous (as may be the case with the $20 pair of latex gloves described in the WSJ article), or maybe they just don’t want to pay for their own reasons—then there is less opportunity for those who depend on those payments to extend charity.
But when it comes to handing out expensive drugs with no or little chance someone is going to pay for those drugs, then the doctor or the hospital really have to question whether that is something than can afford to do. The expected reaction may well end up being the type of situation described in today’s newspaper article.
I am not here to make the judgments as to who is right and who is wrong. You can read the facts and come to your own conclusions.
What I do want to highlight is the fundamental issue, namely that we are going to see more and more circumstances where patients are going to have to quickly come up with large amounts of money on a moments notice to get care. The good old days are gone.
The best example in the article of how radically things have changed was the description of how the blocks and barriers were put into place for the patient before she could get an office visit with her doctor, or even during the midst of her receiving chemotherapy.
Personally, I can’t imagine being in the situation described in the article where a chemotherapy infusion was started and then interrupted until the patient or her family went to the finance office to pay the bill.
When I was in practice a number of years ago, it would have been unthinkable for a financial/billing representative to enter a patient’s examining room with me to first confront the patient about her bill before I could discuss her medical needs.
I am not saying these are not important issues. They are. But they don’t belong in the examining room or the treatment room. My advice: move it outside.
But that won’t make the problems go away.
Drugs are expensive. Wages—especially for nurses and other specialized health care professionals who are in increasingly short supply while demand continues to expand—are rising. Malpractice insurance is high. Maintaining the buildings, sophisticated medical equipment and information technology which are necessary for today’s modern medical practice are all expensive.
What concerns me is that I am not aware of anyone who is looking at this issue on a nationwide, comprehensive basis.
In my personal opinion, it is shameful that we do not have accurate, objective, community-based information on how patients, doctors and hospitals are dealing with the issues of cost in cancer care.
Are insurers covering these new drugs? Are Medicaid programs providing adequate coverage? Are people able to get access to evidence-based, effective cancer care? How are they coping with the high costs of targeted therapies? Are they making trade-offs with their lives because they can’t afford care?
If you think this is a problem for poor people, think again.
Take a close look at your health insurance—especially the chemotherapy and drug benefits—as well as your financial assets and see if you could afford thousands of dollars out of pocket tomorrow if you were diagnosed with an illness such as acute leukemia which requires immediate, intensive treatment to save your life.
These are not common illnesses, but they do occur. And the treatments and the payments won’t wait for you to sell your assets such as investment properties, especially in a market where the value of those assets have diminished considerably.
My friends, I hate to say this, but I suspect many of you are ignorant of the financial risks you face when it comes to getting treated for cancer.
You are employed and you rely on your insurance, but you probably have no idea of the deductibles and co-payments, or the limits that have been put into place on the maximum amounts that will be paid for chemotherapy or perhaps radiation therapy. Or you don’t know that the co-pay for your blood pressure medicine is $15, but for chemotherapy is 25%--which amounts to thousands and thousands of dollars. Or your lifetime total benefit is $1M, a number which disappears quickly if you have a serious cancer that becomes chronic with remissions and relapses requiring expensive treatments over the course of several years.
My bet is that you are closer to the situation described in today’s Wall Street Journal than you realize, and there will be no safety net to catch you.
You may be a wonderful person, with a wonderful family, who has worked hard your entire life. You have paid off your home, and saved some money. But, if current trends continue, no one will take that into account if you can’t come up with the co-payment or additional money for the costs of care not paid for by your insurance. Hospitals and doctors will be forced into situations where “Mr. Nice Guy” no longer applies.
If you haven’t been sick, then you probably don’t know that the safety net isn’t there anymore.
I had a conversation this past weekend with a physician colleague where we discussed our concerns about the rapidly increasing costs of medical care. Both of us have been involved in physician payment issues for many years, always trying to do the right thing to make certain that the payment structure made sense and was reasonable.
The conversation shifted to the costs of care, and how people can afford to pay their medical bills.
My colleague’s statement (which echoed my own thoughts) was a profound commentary on the times, when he said, “It is no longer whether THEY can afford to pay for medical care. Now WE have to worry how we can pay for our medical care.”
My friends, when the doctors—who are obviously as a group economically well-off and usually have excellent health insurance--start worrying about having enough money to pay for their care, then you know we are all in serious trouble.
Feedback
