Some Cancer Clinics Spend Thousands More Per Patient in Medicare Dollars


From radioactive PET scans to costly chemotherapy doses, the quantity of tests and treatments a cancer patient undergoes could depend largely on where he or she receives care, according to an analysis by researchers at Memorial Sloan Kettering (MSK) and others, including Jeffrey D. Clough, formerly of the Center for Medicare and Medicaid Services and currently of the Department of Medicine at Duke University, published in the new April issue of Health Affairs.

The differences in patient care could be due to a lack of discrete guidelines on the effectiveness of a treatment, or the result of a less virtuous reason: the long-held theory that some practices take advantage of fee-for-service payment models that offer financial incentives to add treatments and services.

The analysis, which reviewed Medicare payments to 1,534 medical oncology practices across the United States in 2011 and 2012, found that many practices were receiving significantly more money than others per patient for chemotherapy. Spending on cancer imaging and inpatient hospitalization differed as well. The study does not include information on which beneficiaries had better outcomes of their treatment.

Among the findings:

  • The largest differences were found when comparing oncology clinics based on their Medicare payments for chemotherapy. Practices in the 75th percentile recouped $3,866 more per patient per year than clinics in the 25th percentile. Chemotherapy costs include drugs used to treat cancer, the cost of infusing them, and the cost of drugs to manage chemotherapy side effects (e.g. ‘supportive care drugs’).
  • There were also variations from practice to practice among patients who had to be hospitalized. Patients of practices in the 75th percentile spent many more days in the hospital, costing Medicare on average $1,872 more per patient, than those of practices in the 25th percentile.
  • For advanced imaging services like PET scans or MRIs, often cited as an area of excess spending, the differences were smaller. Practices in the 75th percentile recouped an average of $439 more per patient per year than clinics in the 25th percentile.

While other research has studied cancer-care costs by examining data related to all advanced cancer patients in a particular region, this study is different in that it looked at cancer patients on Medicare being served specifically by medical oncologists. The study found that the portion of care that cancer doctors directly control — the spending on cancer chemotherapies — is the area where the greatest differences in spending are.

We can’t tell from this analysis which patients were treated appropriately and which may have gotten inappropriate chemotherapies and tests, notes Peter B. Bach, Director of MSK’s Center for Health Policy and Outcomes and one of the study’s authors. But either way, it emphasizes the importance of getting spending on chemotherapy under control and ensuring that Medicare patients get care that is driven by their needs, not the practice where they happen to end up receiving care.