When docs are paid less, inappropriate prescribing drops

Take medical uncertainty.

Add financial incentive to treat.

Voila! Increased utilization.

Now take away financial incentive to treat. Guess what you get?

MedPageToday explains in the case of hormone therapy for prostate cancer:

Medicare accomplished what clinical guidelines and evidence-based medicine couldn’t: it reduced unnecessary use of androgen deprivation therapy (ADT) in prostate cancer.

Inappropriate use decreased by almost 30% from 2003 to 2005, following enactment of the Medicare Modernization Act, which lowered physician reimbursement for ADT. Appropriate use of ADT did not change during the same time period, according to an article in the Nov. 4 issue of the New England Journal of Medicine.

“Our findings suggest that reductions in reimbursement may influence the delivery of care in a potentially beneficial way, with even the modest [reimbursement] changes in 2004 associated with a substantial decrease in the use of inappropriate therapy,” Vahakn B. Shahinian, MD, of the University of Michigan in Ann Arbor, and co-authors wrote in conclusion.

“The corollary is that reimbursement policies should be carefully considered to avoid providing incentives for care for which no clear benefit has been established. The extreme profitability of the use of gonadotropin-releasing hormone (GnRH) agonists during the 1990s probably contributed to the rapid growth in the use of ADT for indications that were not evidence-based.”

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Gregory D. Pawelski

November 4, 2010 at 12:33 pm

I first became aware of the chemotherapy concession in 2000 when the Clinton administration was attempting to change Medicare reimbursement practices. NYT’s Reed Abelson wrote about it in January 2003 that brought it to my attention again. I found out the this issue (i.e. physicians having a financial incentive to select certain forms of treatment over others because they received higher reimbursement) was first raised in official, recorded testimony at a Medicare Executive Committee meeting in Baltimore in March, 2000.
There was a gastroenterologist in attendance who complained that Medicare had cut his reimbursement for colonoscopies from $400 to $108 and how all the doctors in his large, multi-specialty internal medicine group were hurting, save for two medical oncologists, whom he said were making a killing running their in-office retail pharmacies.
It apparently was finally receiving some public scrutiny. CMS was going to force steep reductions in Medicare drug reimbursement to physicians for chemotherapy infusion procedures. That triggered Congress to act with pressure from cancer doctors. What resulted was the introduction of the “The Quality Cancer Care Preservation Act of 2003.” It would increase Medicare reimbursement for practice expenses while reimbursing chemotherapy drugs at rates closer to cost.
The concept of having a system which rewards doctors for giving chemotherapy, and doesn’t reward them for spending a half hour talking to a patient to explain why chemotherapy wouldn’t help is a bad system. But money will always corrupt. And the chemotherapy reimbursement system was corrupting. A bad system that created bad incentives that creates bad medicine.
I would imagine that some are influenced by the whole state of affairs, possibly without even entirely admitting it. Social science research shows that people can be biased by self-interest without being aware of it. There are so many ways for humans to rationalize their behavior.


November 4, 2010 at 2:23 pm

My dad has protate cancer, and I think it’s absolutely appalling that doctors sell unnecessary drugs to patients for their own gain.

Glenn Laffel, MD, PhD

November 11, 2010 at 7:59 pm

The “Man bites Dog” angle on this story is that inappropriate use of medical castration therapy was reduced by only 25% as a consequence of the reimbursement shift. There were still very high rates of inappropriate use after the cuts!
Go figure. Maybe the offending docs should be asked to swallow a bit of their own medicine?