During the holidays, I received the letter below from Dr. Peter Eisenberg, Medical Director at California Cancer Care, an oncology practice in Northern California. A member of The Century Foundation’s Working Group on Medicare Reform. Eisenberg is a very experienced, and successful oncologist, who has served on the board of the American Society of Clinical Oncology and the Association of Northern California Oncologists.

One of the things I admire about Eisenberg is that he pulls no punches. In the extraordinarily candid letter below he criticizes a health care system that pays physicians fee-for-service for “doing more” in the form of ever more aggressive treatments.

Sometimes they are effective. Often they are not. Meanwhile, the same system pays little or nothing for what some call “thinking medicine”—consulting with other doctors, counseling patients, giving them choices, and offering services that recognize patients as human beings.

“Medicare pays just $69 for a 15 minute office visit with an established patient; $103 for 25 minutes and $138 for a 40-minute visit,” Eisenberg observes. “As you might imagine” he adds, “even if our doctors saw back-to-back patients 10 hours a day, we would not generate the kind of dollars from evaluation and management fees on our Medicare population to pay more than a fraction of our costs, including rent, salaries for our large staff and our new electronic medical records.

But Eisenberg does not just blame “the system.” He recognizes that all of us—doctors and patients, not to mention insurers and Pharma—help perpetuate a system that, too often, values the most expensive and aggressive treatments over patient “care.” In our society, patients play a role; we expect that everything can and should be cured. Or, as Eisenberg put it: “we expect that we can smoke 2 packs a day for 30 years and the doc will ‘fix it.’”

In the eye-opening final section of this letter, Eisenberg talks, very specifically about the “financial inducements” that lead many oncologists to decide which drugs to use—and how frequently to administer them—based, not on what is best for the patient, but on what will maximize the physician’s reimbursement.







Dear Maggie:

I have been working on this since you asked me some questions about our practice. Maybe it is more than you asked for, but I thought that I’d put my answers in context. Just the other day Stanford University’s Alain Enthoven wrote on the Opinion Page of the New York Times that we docs ought to be salaried. Though for 30 years I have practiced fee-for-service medicine, had a wonderful career and lived comfortably, I cannot argue! The waste associated with the inherent conflicts of interest in fee-for-service medicine is more than we can afford.

At the same time, the way reimbursement is set up, oncologists couldn’t stay in business if we were not paid fee-for-service for selling chemotherapy drugs and services. Some estimate that up to 70% of our earnings come from the sale of chemo drugs.

Maggie, as you know, oncologists are not paid to collaborate with their patients or with other doctors. Listening to patients and chatting with them, asking other docs about a patient, going to conferences, e-mailing experts about problems and looking up stuff in a book (old way) or the net (new way) are not billable events.

Neither is sitting for half an hour at lunchtime with our nurses, medical assistants, research director and the other docs in our office to go over tomorrow’s patients, field questions about problems patients have called in, and converse about problems a patient is having. Can you imagine what this daily meeting costs in terms of salary? Can you imagine why others don’t do this?

Oncology is a team sport and there is evidence that collaborative practice—not only with the patient and her family, but with other docs who are caring for her as well as smart others who bring different areas of expertise to the table, can provide better care.

Do you want to go to a doc and be treated according to his treatment plan after an hour-long visit? Or would you rather that he present your case, along with the pathology slides and the imaging studies, to a group of other docs representing a number of disciplines (medical, surgical and radiation oncology, diagnostic radiology, pathology, nursing, social work, dietetics, pain control, pulmonary, gastroenterology, etc.) to be viewed and discussed?

Smart docs are not afraid to consult with the smarter (or more experienced) docs at the university and even send patients there to get their treatment if the care is complicated and not well–known to us. But there are plenty of docs who, for one reason or another, choose not to refer their patients to another institution. Of course there are plenty of patients who would rather get their care closer to home, but as a recent article in PLOS pointed out, the doctor has an obligation to inform the patient that he might well get better care elsewhere.

We also are not paid to remember your name. Our office has a large staff because we try to serve the folks we care for. As a result, we have two nurse practitioners, one research person, and six clinical folks assisting our six doctors. Our 8 nurses and nurse practitioners plus 16 full-time staff members (medical records, front office receptionists, clerks, insurance specialists, patient care coordinator, and a CEO earn a total of $125,000 a month .

At one of our yearly retreats, we had Rachel Ramen, the author and friend of our practice, talk to us about service. We learned about the notion that one needs to find out where our patient is and start there. Our care of a patient begins before we even meet them in person. Before the appointment, Thomas, our new patient coordinator, spends 20 to 30 minutes chatting with the prospective patient on the phone obtaining all kinds of information, orienting her to our practice and explaining what to expect. It is not unusual for a new patient to ask me to meet Thomas at her first visit to thank him for his kindness .

Our front office ladies—there are 4 of them; one answers the phone, the other 3 greet and check out patients—know the name of each patient and their family members. They give each person a big hello when they arrive. This might seem silly, but almost every day a patient or family member tells me how great our front office staff is. I recently read an article that talked about how important it is to, not only honor a patient’s informed wish for treatment, but to respect her as a person. Patients really don’t want to be numbers.

After a patient is seen by the doc—we do the initial consultation– the Nurse-Practioners see folks in follow-up. And there begins a relationship between the patient and our office staff that is as intimate and as close as you can imagine. With anxiety being appropriately and understandable high, patients have all kinds of questions and concerns that we can’t and haven’t anticipated.

Our medical assistants spend literally the entire day on the phone solving problems. Our small hospital census—5.2 patients a day—is a result of our following through on patient concerns and seeing them in the office before problems become ones that can only be solved in the ER or hospital. We often use the office as an emergency room, but much more conveniently for our patients and at a much lower price..

It is certainly possible that we are not as efficient as we could be. Our patients receive very speedy responses to their needs. It is possible that the system just cannot accommodate the level of care that we provide at the current cost.

I should point out that the only folks who can really generate revenue are the physicians, nurse practitioners, and the nurses who provide chemotherapy. Folks in the front office, our medical assistants and the hoard of employees who also “care” for our patient’s cannot bill for the services they provide.

Neither can I bill for innumerable phone calls and tasks I perform at my desk, when I am not sitting face to face with a patient. Similarly, e-mails to other docs asking for advice or coordinating care among other disciplines go unpaid.

The reason oncologists have been able to grow a practice as large as ours and provide the level of service we do is because of the revenue we obtain from selling chemotherapy drugs and services.

Meanwhile, the Medicare fee schedule that reimburses us for the drugs themselves has been cut. We are paid just 6% over the actual sale price (ASP.) And since we are not a 1,200 doctor practice like US Oncology, we do not get the discounts or rebates that they receive from drugmakers. In our case, sometimes the Medicare reimbursement is actually less than what we have to pay for the drug. For instance, we actually lose about $200 every time we give a shot of Neulasta, a drug to increase white blood count and prevent infection in patients receiving chemotherapy.

But we are paid more for administering the drugs than we were in the past, so it makes economic sense to administer them more often. Not every doctor is willing to do that. The practices that shows some restraint and don’t treat everyone who walks through the door with chemo are the ones that are suffering.

The truth is that there is no clearly effective chemotherapy for a distressing number of malignances. In those cases, if I find that first line therapy isn’t working, I won’t automatically offer a second type of chemo. Instead, assuming the patient wants a frank appraisal of her condition, I’ll explain the realistic goals and options available. In my experience, and in the community in which I live, patients seem to want to know as much as they can about their illness, even if the news is bad. Delivering terrible news is difficult, time-consuming and extraordinarily painful for all involved. But good decisions depend upon an honest and forthright discussion and providing the patient with the information and tools to make decisions.

I have told patients, “I know that I can make you sick, but I am not certain that I can make you better! . . . In the foreshortened time that you have left, you need to think about what you want to do. Do you want to spend that time in this office, with me and my staff, or is there someplace else you would like to be, something else that you would like to do?”

It has taken me a while to sort out how I feel about the drugs we use. I began practicing in the late 1970s, and I remember the increasing role and influence of chemotherapy. As more drugs became available, with more evidence that they were effective, our optimism increased –and use increased as well.

It became clear to many physicians—consciously or not–that selling chemotherapy was really the business they ought to be in as we were compensated so very well for it. The time one spent with patients was not compensated nearly as well. This is not unlike the rewards bestowed upon those who perform operations (at least historically), pass tubes into orifices (GI) or make holes for tubes (cardiology & orthopedics), purchase and use their own imaging machines etc.

When doctors are paid to “do more” there is always the potential for conflict of interest. Keep in mind that physicians are human beings with the same kinds of responses to financial incentives as everyone else. Despite our training and promise to put our patient’s interest first, we succumb to incentives that often come in the form of more revenue.

As time went on and science grew, we became increasingly more successful in providing chemotherapy that actually worked, and it was a lot easier for doctors to sell chemotherapy than it was for them to spend the kind of time necessary to give patients choices.

Keep in mind that in the late ‘70s and ‘80s there was not much discussion about “shared decision-making.” If a patient had cancer, and we knew that tumors responded to a certain chemotherapy regimen by shrinking, physicians assumed that patients would choose to take it, if it was offered to them. “You have cancer, you need chemo,” seemed to be the mantra.

It was not until much more recently that the notion of quality of life, and the fact that just because we shrunk a tumor doesn’t mean that people will actually live longer, was clear to us.

Nevertheless by the mid 1980s it occurred to me that selling chemotherapy was not a sustainable business plan. I thought that insurers would figure out that margins on drugs were too high and cut reimbursement. With that in mind, in 1990, I established the Association of Northern California Oncologists (ANCO).

I hoped that ANCO could rally docs around the idea of evidence-based medicine and take our science and good results to the insurers, who, seeing the wisdom of our arguments, would reward us for being so scientific, thoughtful and restrained. Boy, was I naïve! It seemed that docs so valued their independence—and made so much money — that they would not rally around anything.

In the late 1980s, I went to a Clinical Practice Committee Meeting of our professional society and asked them to consider establishing guidelines for treatment. At the time, I was consulting for Blue Shield of California and was impressed with the wide variation in treatments for similar conditions. I was told under no uncertain terms that my comments and recommendations weren’t welcome!

From the insurance side, there also wasn’t much interest in decreasing wide variations in how doctors treated similar malignancies. I suspect that insurance companies have an easier time making it more difficult for docs to get paid rather than investing in innovative ways to collaborate with physicians. Moreover, if insurers put time and money into researching the most effective treatments, those guidelines would become public—and would benefit competing insurers.

Ultimately, the job of insurance companies is to pay claims. My sense is that they either pay them or not, and holding up payment is what they know how to do. It would have been nice both for insurers and physicains to agree on treatment pathways, but it didn't happen.

Some years later, in the mid ‘90s, I sponsored a meeting of 50 N.California oncologists for a weekend. We had speakers representing folks doing quality studies and electronic medical records and the insurance industry, but no docs really waned to compromise, merge practices and establish standard treatment plans.

Why is there so much variaion on how much treatent is given for similar conditoins?

\ If you ask doctors you’ll hear a variety of answers. Here goes:

n Patient and family expectations. Sometimes, I hear docs say the equivalent to “the patient made me do it,” when justifying the administration of futile chemotherapy. But it is my experience that patients almost always want to be told the truth about their illness and its treatment and prognosis. Patients want to be offered reasonable and realistic options for treatment and they rarely choose treatments with a very small chance of success.

n Societal expectations. We expect that we can smoke 2 packs a day for 30 years and the doc will fix it. And when, through no fault of their own, people develop cancer, many feel certain that it must be curable. Maybe too much of Dr. Kildare and Welby. We just aren’t as good as they are!

n The doctor’s ideal as healer. After all, why did I go to med school if not to fix people? In fact, my earliest memories of contemplating medicine come from the 1950s when I was single digit years old. I remember thinking that there is nothing medical people wouldn’t do or spend to help a sick person! I really did think that! Stuff was cheaper then, and we didn’t have as many choices of treatment!

There is lots of hype about new treatments. I can remember as a young oncologist, scouring the ASCO abstracts for a new treatment for an illness and being excited about a marginally better drug. Perhaps it is time and age that has made me more cynical, as many of the supposedly “better” treatments just did not turn out to be more effective

n Don’t “take away hope!” The lamest of reasons for treating someone—especially with medicines that make them sick! Hope exists in many forms and skillful medical folks with time to spend with their patient can present alternatives other than:

§ “Take chemo = keep up hope,” or

§ “No chemo = no hope!”

I prefer to re-frame the discussion around realistic expectations and discuss what it is that the patient is hoping for. Everyone agrees that living forever is not realistic. And talking about quality of life as opposed to quantity of life gets some traction these days, as patients and families understand Q of L better.

So, assuming the patient is open to such a discussion, I can then promise to be aggressive in controlling pain and in managing other symptoms. In the meantime, I will encourage my patient to live each day to the fullest–striving to live as well as possible rather than as long as possible.

However, rationing chemotherapy is not an issue. If, after being carefully taught that treatment is not very effective and has nasty side effects, a patient wishes to proceed with chemotherapy, I will provide it for her.

n Real, (but sometimes small) chance of success. We do have data on many clinical situations; for example we have evidence of the benefit of first line chemo in advanced non-small cell lung cancer. We know that median survival increases by a couple months. We know that, with treatment, the chance of living a year increases from 15% – 20% to 30% – 40%.

But it is difficult to explain some of this material, especially to folks with poor math skills, and it is time-consuming, as well.

So rather than making it clear that the average patient lives only a couple of month longer—and that the chances of surviving for a year are less than 50/50, it is much easier to say, “Yes, you do have a tough disease, but I think we can help you, so let’s start treatment tomorrow!”

Of course, treating Hodgkin’s or another curable disease is something else.

But most of the cancers we treat with chemo are not curable. Doctors need to be paid for the time it takes to explain the potential benefits as well as the downside of chemo—so that the patient can make a decision about how he wants to spend the time he has left.

n Financial inducements. This is a really tough item to discuss, let alone prove. Most of us truly believe that we are doing good and that doing well comes with it. But, I have heard docs say the most incriminating things and do things that are clearly in their own best financial interest. For example, I have heard doctors talk about:

o Treating patients with a 2 hour infusion of pamidronate (a generic drug used to treat cancer that has spread to the bone) rather than a 15 minute infusion of Zometa, because one could make $500 more on the generic pamidronate.

Many physicians rationalized the use of the more profitable, but longer infusion drug on the basis that, “we have a business to run;” “we’d lose $40,000 a month;” “if we don’t do this we will have to close our doors;” and “my patients are mostly Medicare and they don’t mind hanging around the office for a longer infusion – – in fact they are really very fond of our staff and like spending time with them.”

A small study of 184 patients who were randomly assigned to a two hour infusion or a 15 minute infusion revealed that 92% preferred the shorter infusion. (Chern, et al, Supportive Care Cancer, 2004)

· A physician leader of a drug purchasing group suggested that one might reasonably evaluate regimens to maximize reimbursement. For instance, for stage IV non-small cell lung cancer, he suggested using cisplatin and etoposide (given on days 1, 2 and 3 of a three week course) rather than carboplatin and Taxol (given once every three weeks). He argued that there was data to support the use of cisplatin as a better agent than carboplatin and pointed out that Carboplatin’s use was the result of aggressive Bristol-Myers Squibb marketing. In addition, he noted, using cisplatin and etoposide took advantage of the increase in administration fees since patients would have to come 3 days rather than one day in a three week period.

· When reminbursement for Gemzar and Taxotere was less than cost, it was reported that some practices took these meds off their shelves until Medicare increased payment. When I asked one doc how he would treat bladder cancer without Gemzar, he said, “I’ll use Taxol, it’s almost as good!”

· Amgen “bundled” Aranesp and Neulasta, tying rebates for the white cell-increasing drug, Neulasta to a practice’s use of the red cell-increasing drug, Aranesp. For instance, if a practice used less than 65% of its erythropoietin as Aranesp, it would lose its Neulasta rebate. A loss of this rebate resulted in the practice’s purchase of Neulasta at $209 more than Medicare pays. Therefore, if the practice does not buy more than 65% of its erythropoietin from Amgen, it must come up with $209 out of its own pocket to supplement the purchase of Neulasta for its patients. Amgen capitalized on its perception that physicians will buy products that maximize their reimbursement. This was easier than trying to sell its products based on solid clinical superiority.

· Sometime ago, we received an e-mail from our “Leukine Sales Consultant” at Berlex who pointed out that if we “move all CSF (colony stimulating factors = meds which increase blood counts) to Leukine” we would “save” $430,000. While Leukine , like other CSFs, does increase the white count it is not FDA-approved for use with most chemotherapy regimens and clinical trials have not been done to show its equivalence or superiority to rival drugs.

Maggie, it is my understanding that patients expect physicians to make recommendations based on what it is best for the patient, not what is financially best for the physician. It is my contention that patients suffering from cancer would be appalled to understand that they could have received a 15 minute infusion rather than the two hour infusion but for the fact that the physician made $500 more per infusion. (Currently this financial difference has disappeared.)

I have been trying and trying to find a rationale to support the style of medicine with which I am familiar. Unfortunately, I think that the incentives are so mis-aligned and the temptations are so great that docs have a tough time making the right decisions. Look at the increase in diagnostic imaging in those practices that have purchased diagnostic imaging machines. “We have to feed the beast,” I have heard.

My simple-minded solution is to re-align incentives so that the docs are paid for doing the right thing. What the right thing is, of course, can be open to interpretation. What patients think is right may be different from what the payer thinks is right. That gives me a headache!

But clearly, we need guidelines for the most effective care – and patients need to know whether their doctors are following the guidelines. Medicare needs to jump on the quality band wagon and support docs’ use of quality programs such as ASCO’s Quality Oncology Practice Initiative (QOPI), a voluntary program that serves to encourage oncologists to examine their practice and to compare themselves to others. Currently, over 1,500 physicians in more than 400 practice sites are registered and the American Board of Internal Medicine considers QOPI to fulfill an oncologist’s requirement for quality improvement in his recertification.

Patients also need to understand that as long as Medicare pays fee-for-service there is a potential for conflict of interest.

But patients really do not want to hear about doctors’ incentives. An article in Health Affairs in 2000 (Miller and Horowitz) showed that:

1. Many patients are unaware of the financial incentives their own physicians face. Only about half of the respondents wanted information about the incentives.

2. Trust in physicians is high; 84% of patients completely or mostly trusted their physician to put patients’ interests first.

3. “Many patients stated that the information was not relevant to them because they trusted their physician. In fact, some stated that they would not want the information because it would raise unwelcome doubts.”

4. “Patients also expressed confidence that they could judge the quality of their care and could change physicians if they were not satisfied.”

5. “Many patients stated that they would want to learn if the incentives imposed any cost on them.”

“In general, patients expressed strong reluctance to raise the issue [of incentives] with their physicians for a variety of reasons, including fear of embarrassing or angering the physician; belief that the topic is too “personal” and “intrusive” to raise; perceived irrelevance to treatment; and desire not to take valuable time away from clinical matters .”

I have a real problem in placing the burden of figuring out whether a doc is looking out for a patient’s best interest on an ill, frightened and anxious patient. As professionals, we have a sacred responsibility to put patients’ interests first.

Ultimately, Medicare may want to reduce the fees it pays “outlier” doctors,, reducing the incentive to over-treat. Meanwhile, Medicare needs to pay doctors for the time it takes to really explain the pros and cons of treatment to their patients in depth– so that patients can make an informed choice—and not just give informed consent.