Should cancer doctors be paid more when more expensive cancer drugs are given? Absolutely not! Yet the government has been doling out money this way for years. Medicare Part B pays for drugs. When cancer doctors or oncologists administer chemotherapy in their office, they are currently paid about 6% of the price of the drug plus a little more.
What that means is that if the oncologist chooses a drug which costs say $ 100 he or she will be paid $6 (plus a small standard fee). Choose another drug which has been approved to treat the same cancer that costs $1000 and the fee is now $60. To make matters worse when oncologists are employed by hospitals (which is now more often the case rather than independent practices), there is pressure from administration to order the more expensive drug.
Whether the more expensive drug actually works better becomes not as important as what the bottom line is. Medicare, to its credit, realizes this and is trying to change the way it pays oncologists. One proposal would pay a much smaller percentage of the drug price at about 2% and pay a much larger fixed fee, which would not vary based on the price.
What this would do is reduce the financial incentive so that doctors can make decisions about which drug to use based on which is most effective with the least side effects rather than which one lines his or the hospital’s pockets the most.
Expect to hear some noise from drug manufacturers, who of course would prefer docs to administer the Porsche rather than the Hyundai version of any given chemotherapy.