Health care reform

Docs Fix Their Bottom Lines

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A new study finds the semi-obvious: When doctors get paid less to treat cancer patients with chemotherapy, they will treat more patients with chemotherapy and use more expensive drugs.

The study looks at the results from 2005 cuts in chemo reimbursement rates by Medicare. Interestingly, the researchers, Mireille Jacobson, Craig C. Earle, Mary Price, and Joseph P. Newhouse, don't try to gauge whether the changes resulted in better or worse health outcomes. Instead, they simply note that doctors seem to compensate for lower Medicare payment per patient by treating more patients, and "that payment reforms have real consequences and should be undertaken with caution."

More on the budgetary and medical perils of the Medicare reimbursement "doc fix" from honeymooner Peter Suderman here, here, and here. Or enjoy a video version of health care budget trickery:

Via Jerry Brito.

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  1. Or they just stop taking Medicare.

    1. I’m working on a “fix” for those uppity slaves.

  2. I wonder how soon we’ll see everything treated with chemo? Doesn’t pay great, but they can make up for it in bulk.

  3. This just in… This just in… The Laws of Economics cannot be repealed, no matter what Statists think… This and more news tonight, at 11.

    1. “a wolf has escaped from the zoo. What that means for your weekend…Next!”

  4. Didn’t somebody get slammed awhile back for suggesting that doctors do unnecessary procedures just to make some coin?

    1. The report does not indicate that the procedure per se is unnecessary, only that doctors are taking in more patients to treat them with the same profitable procedure in order to compensate for lost income.

      What that means is that individual action is always more powerful than bureucratic good intentions.

      1. I don’t know, those good intentions can be pretty powerful, too. Just not as, you know, intended.

        1. From the study synopsis: “The ultimate message is that payment reforms have real consequences and should be undertaken with caution.”

          Duh, whodathoughtit?

      2. What was happening before? Were cancer patients who needed chemo being turned away by doctors?

        The number of cancer patients needing chemo has not changed because of the reimbursement rate change. So if the number of cancer patients getting chemo is up, that means either doctors were refusing treatment before, or are going forward with unnecessary treatment now.

        1. The third-hand cigarette smoke and vehicle emissions of poison must be the cause of more cancer.

        2. Re: Tulpa,

          So if the number of cancer patients getting chemo is up, that means either doctors were refusing treatment before, or are going forward with unnecessary treatment now.

          Government “good intentions” always create perverse incentives. You may be right about doctors previously refusing to prescribe chemo to some of their Medicare patients.

          1. “When doctors get paid less to treat cancer patients with chemotherapy, they will treat more patients with chemotherapy and use more expensive drugs.”
            And also diagnose more carbunkles. We’re in a virtually epidemic of carbunkles. Although there is no cure, bi-weekly visits to the doctor for ongoing evaluation undoubtedly contributes to the increases in overall health spending.

            Physicians have a business with a can’t be beat business plan – come back and see me as frequently as necessary for me to make my yacht payments to check something out – or don’t, and die.

    2. Yes and he is getting slammed now for shaking down BP.

  5. individual action is always more powerful than bureucratic good intentions.

    If all those doctors were federal employees, they would be magically transformed into altruistic, selfless saints.

    1. Re: P Brooks,

      If all those doctors were federal employees, they would be magically transformed into altruistic, selfless saints.

      I already got a taste of selfless saints when I was getting my driver’s license. I prefer profit-seeking bastards – they treat one better.

    2. I imagine they’re altruism would be unaffected.
      But being the gubermint, doing a test for colon polyps (finger in the ass) would entail filling out thirty pages of “dignital ass penetration consent, monitoring, and follow-up forms,” entail having a nurse (specially trained in sexual deviant digital anal penetration) present, and having administration of a program to monitor complaints regarding said procedure, as well as racial and sexual disparities in the assignment of doctors with unusally long fingers.

      1. “…in the assignment of doctors with unusally long fingers”
        Of course, there are those who would prefer the doctors with unusually long fingers…not that there is anything wrong with that.

        1. what about girth ?

          1. Right on! Indeed, many say girth is more important than length…not that theres anything wrong with that

  6. Most businesses have no interest in killing their customers. But since these people only have a few years left to live, might as well perform a cashectomy on them.

  7. When doctors get paid less to treat cancer patients with chemotherapy, they will treat more patients with chemotherapy and use more expensive drugs.

    I’d like to know what happened to reimbursement for substitutable treatments. For some patients, surgery or radiation are also potentially effective.

    I’d also like to know if the outcomes changed – was the additional chemo effective? Were docs just filling their books with marginal patients to run the meter, with minimal impact on outcomes?

    Finally, I’d like to what happened to compensation to the chemo facility itself for the treatments.

    I can see docs cranking up their volume to make up for lower rates, to a point, but their time is finite, and at some point higher volumes are going to impact on quality.

  8. Good lord – I mean, how much does Joe Biden look like Walter”?

  9. It took hundreds of years and the invention of the semi-conductor for researchers to discover fixed costs?!

    The next time they make a discovery like that, I hope they keep it under their hats where the President can’t see it. Otherwise, he may try to do something about it, and I just can’t take it anymore.

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