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Lawrenceville, NJ (Dr. Simone) – In 2005, Medicare bureaucrats thought that the high profit margin in chemotherapy caused physicians to overuse chemotherapy.  They changed the way they paid physicians for drugs, making private oncology practice much less profitable and in some cases a losing proposition.  Private insurance companies also followed the lead of Medicare and reduced their reimbursements to physicians.  This forced a mass migration of cancer care to hospital owned facilities. Were the hospital lobbyists involved also?  This shift to hospitals dramatically increased the taxpayers cost for cancer care.   
Medical costs of cancer care in United States will rise by 27% between the years 2010 and 2020 according to the National Cancer Institute.  Cancer drugs account for 8 of the 10 most expensive drugs paid for by Medicare. The average monthly cost for oncology drugs in the year 2013 was more than $10,000 with some costing over $30,000 per month.  The federal government, the biggest payer of cancer care, made cancer costs soar because Medicare pays an extra $6500 a year when chemotherapy is given to a patient in a hospital owned facility.  Private insurers also pay a higher premium for care delivered in a hospital setting.  In addition, Medicare and commercial insurers pay almost double the amount for chemotherapy agents when they are billed by hospital owned compared to physician owned facilities.  And remember, another group of bureaucrats forbid the government from negotiating for cheaper drug prices from Big Pharma.    
This government intrusion causes patients to bear a higher burden of the overall cancer costs.  In a hospital owned facility, the patient pays for each individual dose and this is not so in a private oncologist’s office. When Medicare’s payout increases so does that of the patient who generally has a 20% coinsurance payment.      
In 2011, Medicare had to cut costs even more because of the Budget Control Act of 2011.   So the bureaucrats shined again with their ASP + 6 payment for drugs. Medicare decided to pay only 6% above the average sales price to the oncologist for buying, storing, handling and administering chemotherapy drugs.  ASP + 6 was soon cut to ASP + 4 which was a 33% cut.  And drug costs have soared over the last five years.  Annual cost for the most common chemotherapies is up $200,000 a year and this forces more patients to hospital owned facilities.  

The costs will keep spiraling upward because of Government intrusion and clever lobbyists, forcing cancer patients from private practitioners to hospital owned facilities incurring much higher costs.

(c) 2017 Charles B Simone, M.MS., M.D.