ADDITIONAL INFORMATION REGARDING OVARIAN CANCER & RADIATION/CHEMOTHERAPHY BY GREG PAWELSKI
A Physician Compensation Report titled, "Oncology Income May Drop 40% by 2005," comments that Clinical Oncologists in practices that infuse chemotherapy drugs say that changes made in their 2004 reimbursement schedule by the Medicare reform law will result in income losses ranging from 2% to 15%, depending on each practice's payer mix and current prices for purchasing the drugs. For 2005, practice managers predict physician income losses of another 25%, if Congress doesn't repeal the new law's reimbursement cuts for next year. Median physician compensation and benefit expense was $446,000 in 2002, the report says.
Congress is giving oncology practices 2004 to shift from a drug-based business to a service-based business, like 98% of other practices. Even if practices that cling to the drug-based reimbursement model in 2005 stand to lose up to a quarter of their revenue, making them paupers who only will make $285,000 to $328,000 per year, the government feels that oncologists are padding their salaries with excess drug utilization, at a huge expense to the taxpayer.
According to the Government Accountability Office (GAO), oncologists will see a net increase in Medicare revenue for oncology drugs, their preparation and their administration in 2004 and 2005, despite reduced payments for certain drugs. Providers feared the change would represent significant reimbursement cuts. However, the GAO said that in a review of 17 drugs, Medicare rates would exceed physician costs by 22% in 2004 and by 6% in 2005.
It will be interesting to see how utilization patterns change when financial incentives change. This is hardly a situation that will leave cancer patients dying in the streets, driving hundreds of miles for lack of a community cancer center. Although it might leave a few oncologists short some of the income to which they have grown accustomed. The medical lobby opponents of the reimbursement changes are working to interest Congress in a change of direction. A membership that makes $450,000 per head has some influence, to say nothing of the big Pharmaceuticals.
Greg Pawelski
To return to the main Greg Pawelski page click
Here