January 25, 2019
About 40 million Medicare beneficiaries suffer from at least two chronic diseases. A new proposal from the Trump administration could result in worse outcomes for their conditions.
In an effort to reduce drug spending, the Department of Health and Human Services wants to alter Medicare “Part B,” the federal health insurance program that covers potent medicines administered by physicians. The changes could restrict patients’ access to dozens of advanced therapies for cancer, rheumatoid arthritis and other debilitating conditions.
One major change would affect how these medications are distributed. Right now, doctors purchase medicines, store them in their offices, administer them to patients and then seek reimbursement from Medicare. Under HHS’s proposal, private-sector middlemen hired and paid by Medicare would be responsible for purchasing drugs in bulk and distributing the medicines. Physicians would need to request the specific drugs they need from middlemen ahead of patients’ visits.
In other words, middlemen — not doctors with years of medical expertise and valuable face-to-face patient interaction — would be responsible for ensuring patients have timely access to critical medications.
Patients would almost certainly face treatment delays. That’s what happened when HHS established a similar pilot program from 2006 to 2008 that relied on such middlemen. Doctors sometimes didn’t receive medicines on time, which was one reason the program was ultimately shut down.
The middlemen could also restrict patients’ access to certain medications in an effort to steer people toward other, cheaper drugs. Such restrictions would make Medicare coverage significantly less generous. Right now, patients have unfettered access based on their condition and response to the medication to virtually all FDA-approved drugs that must be administered by physicians.
Another major change would affect how Medicare pays physicians for participating in Part B. Right now, doctors receive a markup equal to 4.3 percent of a drug’s average sales price. This markup helps cover storage and overhead costs.
Under the new proposal, doctors would receive a flat fee for administering Part B medicines. This flat fee would be lower than the markup many doctors currently receive. By effectively cutting reimbursements, the HHS proposal could make participating in Part B a money-losing proposition for physicians.
Many physicians already struggle to keep their doors open. In one survey, 80 percent of oncologists claimed that past reimbursement cuts affected their ability to practice. When the government cut reimbursements by just 2 percentage points in 2013, half of oncologists had to turn away patients and direct them to different facilities for treatment.
More than 400 community oncology clinics across the nation have closed in the past decade. An additional 350 are struggling financially, according to a Community Oncology Alliance report. The patients who rely on such clinics can’t afford any more barriers to care.
Cutting off patients’ access to lifesaving treatment could actually increase future health spending. This year, the United States will spend $3.5 trillion on health care — and 90 percent of that sum will be spent treating chronic disease.
The chronic disease epidemic is poised to worsen in the coming years. By 2050, the nation could spend up to $6 trillion each year battling chronic conditions. To sustainably shrink this spending, we must prevent people from developing chronic conditions or treat those conditions before patients fall gravely ill. Clinic closures and distribution delays would cause patients’ health to deteriorate.
Making it easier for patients to receive the care they need would reduce overall health-care spending. Medicare beneficiaries who receive consistent treatments and visit the doctor regularly have lower rates of hospital utilization, emergency room visits, fewer complications and overall lower costs of care per episode, according to a study from researchers at Johns Hopkins, Harvard and the RAND Corporation.
Tens of millions of Americans currently suffer from chronic diseases. And they’ll suffer for years to come if HHS proceeds to restrict access to medicines.
Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease. He wrote this for InsideSources.com.