From a story in today’s NYT by Gina Kolata:
Oncologists like Dr. Ward say the reason they are being forced to sell or close their practices is because insurers have severely reduced payments to them and because the drugs they buy and sell to patients are now so expensive.
So doctors are affiliating with hospitals that can charge higher prices to insurers. Hospitals can also buy larger volumes of chemotherapy drugs at lower costs than can independent doctors.
“Say there was a Costco that had very good things at reasonable prices,” said Dr. Barry Brooks, a Dallas oncologist in private practice. “Then a Neiman Marcus comes in and changes the sign on the door and starts billing twice as much for the same things.” That, he said, is what is happening in oncology. […]
The American Hospital Association cites advantages for patients being treated by hospital doctors. “The hassle factor is reduced,” said Erik Rasmussen, the association’s vice president of legislative affairs. Patients can have scans, like CT and M.R.I., use a pharmacy and get lab tests all in one place instead of going from facility to facility, he said.
And, he added, there is a reason hospitals get higher fees for their services — it compensates them for staying open 24 hours and caring for uninsured and underinsured patients.
For doctors in private practice, providing chemotherapy to uninsured and Medicaid patients is a money loser. As a result, many, including Dr. Ward before he sold his practice, end up sending those patients to nearby hospitals for chemotherapy while keeping them as patients for office visits.
“We hate doing it, I can’t tell you how much we hate doing it,” said Dr. Brooks, the Texas oncologist. “But I tell them, ‘It will cost me $200 to give you this medication in my office, so I am going to ask you to go to the hospital as an outpatient for infusions.’ ”
Dr. Peter Eisenberg, in private practice in Marin County in Northern California, said: “The disgrace is that we have to treat people differently depending on how much money they’ve got. That we do diminishes me.”
The piece also indicates how hospitals can make therapeutic choices that lead to greater profit.