Tag Archives: health care cost

N.C. series explains high cost of cancer drugs

As part of an ongoing series on the cost of health care in The Charlotte Observer and The News & Observer in Raleigh, N.C., Ames Alexander, Karen Garloch and Joseph Neff put together a two-part examination of why independent oncology practices are vanishing and what effect that trend is having on the cost of cancer care.

In the end, it seems to come down to one simple fact: The system strongly incentivizes hospital-based oncology practices by essentially allowing them to charge more than their independent competitors.

…when hospitals buy (independent) practices, prices go up. Patients are billed based on the hospital fee schedule.

Nationally, chemotherapy costs 24 percent more in a hospital-based outpatient setting than in a doctor’s office, according to a study by the consulting firm Avalere Health.

“The suggestion that when a (physician) group comes to us … we raise their prices, that’s not true,” said Carolinas HealthCare President Joe Piemont. “When the group comes to us, they charge our prices. … These are our negotiated rates with (private insurance companies).”

While there are many other factors involved, the basis for the differences is that hospitals can bill insurers at higher rates because they have more leverage when negotiating. Hospital representatives say the higher prices go, at least in part, toward charity care, as well as additional services not provided by an independent practice.

Reporters hoping to replicate the trio’s work would do best to start with their July AHCJ article explaining how the series had come together, as well as their latest “How we reported this story” sidebar, located partway down this page.

Special, easy-to-get medical credit cards seduce providers, desperate patients

The (Bergen County) Record‘s Lindy Washburn reports on health care professionals who offer specialized credit cards which can cover certain health costs and can be acquired on site, often in the time it takes to go from diagnosis to emergency procedure. Washburn writes that many providers prefer these cards and it’s easy to see why.

The health care provider receives payment in full when the bank gives its “instant approval” to the patient’s credit application — even for care and services that would normally be billed over weeks or months. That has left patients thousands of dollars in debt — and paying interest rates of 24 percent or more — for care they didn’t receive or even agree to.

So, while some providers love the instant payments, Washburn writes, “state officials are investigating whether medical professionals are violating New Jersey’s consumer fraud law amid allegations that some health care providers have abused these credit sales.”

Among the complaints: Doctors, dentists and others pressure patients to “sign on the dotted line” when they’re vulnerable or in pain; they recommend more costly treatments than necessary, knowing the lending company will pay; and they fail to complete the promised treatment once the money is in hand.

In her CJR post on Washburn’s story, Trudy Lieberman, AHCJ’s immediate past president, writes that such arrangements are likely to become even more popular as co-pays and deductibles rise, and thus urges reporters to dig deeper into “what rights and protections consumers have in this brave new world of health credit cards.”

What I wanted to know is where are the protections of the federal Fair Credit Billing Act. Do they apply? How? What can someone do if they are pressured and treatments are not done?

And if there are not enough protections in place, should there be?

Federal funding of migrant health clinics under fire

Kaiser Health News’ Phil Galewitz spotlights a 50-year-old federal effort to provide health care to migrant farmworkers, one which provides funds to 156 health centers (list) throughout the country. There are 13 each in Texas and Florida and 27 in California, and in 2010 the government contributed $166 million to the care of about 900,000 migrant and seasonal laborers. “Such clinics,” Galewitz writes, “have become the latest flash points in the national immigration debate.”

Health center officials across the country describe how local, state and national law enforcement authorities have staked out migrant clinics, detained staff members transporting patients to medical appointments and set up roadblocks near their facilities and health fairs as part of immigration crackdowns.

Proponents say the clinics help ensure the health of the people most responsible for the handling and production of the American food supply, while conservative groups argue that the federal government shouldn’t be providing benefits for illegal immigrants, a group that makes up about half of the 3 million-strong migrant farm labor force.

Esophageal cancer screening could lead to runaway health costs

Reuters’ Frederik Joelving reports that a new, easier method of taking biopsies to detect esophogeal cancer, called TSA, has opened a up a whole new profit center for folks pushing cancer screening, despite the fact that, as Joelving writes, “there is no research showing that routine screening for esophageal cancer lowers the risk of dying from the disease. Specialist medical groups recommend against it, as does the American Cancer Society.”

Joelving’s report focuses on one physician, Dr. Jonathan Aviv, who has peddled the screening with particular vigor, recommending it for anyone over age 50. Here he is with talk show host Dr. Mehmet Oz:

Folks in the know are not nearly as impressed as the TV doctor.

While the cost of TNE is lower on a per-patient basis than traditional endoscopy, critics say testing millions of people would needlessly add billions of dollars to the already bloated U.S. national health bill and lead to lifelong follow-up testing for many people who would never get the disease.

“You are going to end up hurting a lot of people, and it’s not clear to me you’re going to help very many,” says Dr. Otis Brawley, chief medical officer of the American Cancer Society and author of “How We Do Harm: A Doctor Breaks Ranks About Being Sick in America.” “The simple, ‘Let’s find it early, let’s not pay any attention to the potential for harm’ – that same thought process is what started prostate cancer screening.”

Joelving even goes so far as to compare the test’s business potential to PSA, the well-known antigen screening for prostate cancer that costs the American health system at least $3 billion a year, and which one of its discoverers described as resulting in “a hugely expensive public health disaster.”

And, speaking of conflicts of interest, Joelving found Aviv has plenty.

At different times over the past decade, he was a paid consultant to three companies that make or sell TNE scopes and related equipment: Minneapolis-based Medtronic Inc, Pentax — now known as KayPentax, based in Montvale, New Jersey – and Vision-Sciences Inc, of Orangeburg, New York. Aviv says he is no longer a paid consultant to any of the companies, though he owns several thousand shares in Vision-Sciences and uses its equipment. The company’s systems cost between $30,000 and $60,000.

Watch the AHCJ Health Reform Core Topic pages for an upcoming feature by Joelving about how he reported this story. For more about screenings and comparative effectiveness research, see our recent article by Rochelle Sharp.

How health care price fixing works in Maryland

As part of her series in National Journal, Margot Sanger-Katz explains how four decades of health care price controls have held costs in Maryland from 25 percent above the national average in 1976 to 3 percent below average in 2009.

national journalIn addition to price, the state’s system has also had an impact on quality of care and on hospital access, because Maryland’s universal prices mean that inner-city hospitals won’t be lured out to more affluent suburbs as they have been in cities such as Detroit and St. Louis.

Maryland’s system is what health care economists call all-payer rate-setting. The cost-containment board looks at services and hospital needs and then selects a uniform menu of prices for all payers. In most states, prices for the same procedure vary. Some payers, usually the public ones such as Medicaid, get a steep discount, while others pay more to make up the difference. (The country’s most expensive CT scan of the head is $1,545, according to the international health-plan study.) In Maryland, Medicare, Medicaid, private insurers, and patients who pay cash all get the same bill for a CT scan. It means that bigger, more powerful hospitals can’t demand higher prices from insurers. It also means that hospitals that treat Medicaid patients don’t get bankrupted by skimpy reimbursement rates.

Sanger-Katz is writing this series as part of an AHCJ Media Fellowship on Health Performance, supported by the Commonwealth Fund.