Higher oncology costs driven by practice setting

The good news is that the five-year relative survival rates for major cancers are rising. The bad news is that patient out-of-pocket costs associated with IV cancer drugs have also increased as physician-owned practices have been purchased by hospitals, according to a recent report from IMS Institute for Healthcare Informatics.

Patient access to life-saving oncology medicines that are now infused or injected in hospital outpatient facilities may be threatened as the costs are nearly triple that of patients receiving the treatments in physician-owned offices.

Pharmacists protest higher cancer drug costs

“In the U.S. patient out-of-pocket costs associated with IV cancer drugs have risen steeply as consolidation of smaller group practices into larger hospital systems has triggered higher outpatient facility costs shared with patients,” according to the IMS Institute report.

Costs of daunorubicin, doxorubicin, bevacizumab, and epirubicin administered in 2012 in hospital outpatient facilities were 975%, 275%, 259%, and 244% higher than if they had been administered in physician-owned facilities, according to the report. See chart (bottom of web page) of the relative costs of other cancer drugs used in these practice settings.

“Reimbursement levels for the administration of drugs are higher than those for physician offices. For typical targeted therapies that are infused or injected by an oncologist, reimbursements for hospitals are at least double those for physician offices. This has brought sharply higher costs to payers over the last two years,” said IMS Institute Executive Director Murray Aiken.

“These higher costs are associated with higher patient out-of-pocket costs, depending on insurance plans and benefit designs and can trigger reduced persistence by patients and higher overall costs of care,” he said in a video recording on the IMS website.