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Incentive To Treat Bladder Cancer In Doctors' Offices Raised Medicare Costs

From the annals of bright health care ideas that have unintended consequences comes a tale of what happens when Medicare pays doctors more to do bladder cancer surgery in their offices.

Kidneys
(Wikimedia Commons)

If you guessed those doctors did more bladder biopsies and related procedures during office visits, you'd be right. But you'd be very wrong if you figured, as Medicare officials did when they came up with the plan, that the in-office work would dramatically reduce the expense of hospital care. Overall costs to Medicare for bladder cancer rose about 50 percent, says a study of the changes at a New York practice just published online by the journal Cancer.

The basic problem is that the 2005 hike in payments occurred without any guidelines to help doctors decide what was appropriate care, explained Dr. Micah Hemani, urology resident and lead author of the report. "Medicare's intention was to save costs," he tells Shots. "And that is not what's actually happening in our practice." Hemani is at New York University Langone Medical Center.

The increase in outpatient biopsies may have been a good thing, despite the expense. More cancer may have been detected and patients may have been treated appropriately without being hospitalized, but that assessment is beyond the limits of the current report. Another issue, Hemani says, is that there are no long-term data on the effectiveness of the office-based procedures.

In an accompanying editorial to the study, Dr. David Penson, a Vanderbilt urologist, writes that the increase in procedures is probably not "caused primarily by self-serving financial motives." Instead, Penson suggest the payment reduced the threshold for doctors to perform procedures. So it's less a conscious money-making decision than doing something relatively easy, just to be sure.

There are some caveats. The findings were based on data from a single medical practice affiliated with a big New York hospital. Still, Hemani told us, it's his guess "that this is a really a national problem."

He says the NYU docs are taking a closer look at which kinds of patients have the best results with office-based care and which should go the hospital route. Ultimately, he says, there need to be some rules of thumb on what's cost-effective and what's clinically efficacious. Those could wind up sending more patients to the hospital treating fewer of them in the office, he says.

Update: Dr. Len Lichtenfeld, deputy medical officer of the American Cancer Society, takes issue with bladder cancer report. Lichtenfeld, who serves on an expert committee that advises Medicare on payment, writes the researchers misunderstand what Medicare was up to:

Medicare didn't wake up one morning and decide that they wanted to pay doctors more in the hope they could save some money. They paid the doctors more money for the actual costs the doctor incurs for doing the service, just as they do for the more than 7,000 services that they cover and that are performed appropriately in the office setting.

You might be interested to know that the ACS publishes the journal Cancer, where the original article appears.

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