Manipulating Physicians To Block Access Isn’t The Way To Control Healthcare Costs

It’s no secret to anyone involved in health care today that a daunting challenge involves how to ensure appropriate use of new medicines that offer tremendous curative power at an inordinately high cost.

The best way has yet to be found. But two entirely wrong ways have emerged, and both involuntarily implicate treating physicians badly, one in an obvious and outrageous manner, the other in an opaque and devious one. As it happens, the American Medical Association’s House of Delegates is meeting this weekend, affording the country’s medical establishment the perfect opportunity to take a firm and forceful stand against both.

The obvious and outrageous “cost control technique” was announced last month by one of the country’s largest managed care organizations, WellPoint, potentially impacting thousands of patients in New York City and across the state. The company stated simply that instead of continuing to have cancer-treating doctors (oncologists) select which drug on its formulary to use for a particular patient, it would start “incentivizing” doctors to use the one it favored (usually the cheapest). This “incentive” will take the form of a $350 monthly payment per patient.

Policymakers have another term for such “incentives.” Under the Federal anti-kickback statute, any person or entity who receives, pays, offers or solicits anything of value in order to induce or reward the ordering or referral of products and services covered by federal health care programs is guilty of a felony, and faces civil monetary penalties of up to $50,000 per violation and may be the subject of a claim for treble damages under the False Claims Act.

The scope of the statute is limited to federal health care programs such as Medicare and Medicaid — so while this particular application may lie outside the law’s reach, that doesn’t change what it is. WellPoint would undoubtedly argue that its goals are altruistic – to reduce costs. Perhaps, but does that give Drug Company X the right to pay a physician a monthly stipend to prescribe its drug because it happens to be cheaper than Company Y’s? This gambit could quickly become the rage unless patients who expect doctors to have their care foremost in mind (and doctors who agree) demand it be stopped.

The other “cost control” technique is much more opaque and devious. The objective is to keep information from the physician and the patient, leading to use of the less expensive medicine because actual “selection” of drug defaults to a third party (the payer). This applies to a particular category of medicines called “biologics” – those made using living cells and very large and complex molecules — and comes into play when an original (or “pioneer”) biologic loses its patent exclusivity and other makers compete for market share by marketing similar ones (called “biosimilars”).

Those who would deny doctor and patient the right-of-selection have concocted a pretty easy way to do it – give the original, and every biosimilar to it, the same name. Strange as it may sound this is no frivolous proposal, in fact the U.S. Federal Trade Commission held a hearing on it earlier this year, where some suggested it was necessary in order to promote “competition.”