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It's the sequester. And the sequester is good. Austerity for cancer patients. What could go wrong with that?

Cancer clinics across the country have begun turning away thousands of Medicare patients, blaming the sequester budget cuts...

After an emergency meeting Tuesday, ((North Shore Hematology Oncology Associates)) clinics decided that they would no longer see one-third of their 16,000 Medicare patients.

((Jeff Vacirca, their chief executive, said))

"A lot of us are in disbelief that this is happening. It's a choice between seeing these patients and staying in business."

Oh, but it's just an unintended consequence of doing something really, really stupid. Who could have predicted?
Legislators meant to partially shield Medicare from the automatic budget cuts triggered by the sequester, limiting the program to a 2 percent reduction - a fraction of the cuts seen by other federal programs.

But oncologists say the cut is unexpectedly damaging for cancer patients because of the way those treatments are covered...

The federal government typically pays community oncologists for the average sales price of a chemotherapy drug, plus 6 percent to cover the cost of storing and administering the medication.

Since oncologists cannot change the drug prices, they argue that the entire 2 percent cut will have to come out of that 6 percent overhead. That would make it more akin to a double-digit pay cut.

In other words, if the price of the drug is 94% of the total charged, and the other 6% is used to pay for the clinic's costs associated with the administering a drug, then reducing reimbursement by 2% means the government is really reducing what the clinic gets to cover costs by 33%, while the drug company that supplies the drug isn't taking a hit at all.

Isn't that sweet? But hey, there's hope. Maybe their patients won't all just up and "Die quickly!"

Cancer patients turned away from local oncology clinics may seek care at hospitals, which also deliver chemotherapy treatments.
There's just one catch. Catch 6500.
The care will likely be more expensive: One study from actuarial firm Milliman found that chemotherapy delivered in a hospital setting costs the federal government an average of $6,500 more annually than care delivered in a community clinic.
Seems like some cancer clinic administrators believe the tooth fairy will solve the problem.
Some cancer clinics are counting on the federal government to provide relief, and continuing to see patients they expect to lose money on...

"We're hoping that something will change, as legislators see the impact of this," Ralph Boccia, director of the Center for Cancer and Blood Disorders in Bethesda, Md., said.

What legislators would that be, I wonder? Ted "let's repeal Obamacare for the 36th time" Cruz? Paul "let's kill Medicare in your lifetime" Ryan?

I know for as certain as I could ever be that enough legislators do not exist to vote to make drug companies take a minor two percent hit in the amount they charge for cancer drugs. I suppose it is barely possible enough could be shamed to simply undo the cuts for drugs falling into this "gotcha."

But I wouldn't bet my clinic on it, Mr. Boccia.

Boccia estimates that 55 percent of his patients are covered by Medicare, making any changes to reimbursement rates difficult to weather.

"When I look at the numbers, they don't add up," he said. "Business 101 says we can't stay open if we don't cover our costs."

Not unless health care was treated like it is in every other industrialized country on Earth - as a right, not as a business.

Originally posted to jpmassar on Thu Apr 04, 2013 at 08:38 AM PDT.

Also republished by Occupy Wall Street, Progressive Policy Zone, Single Payer: The Fight for Medicare for All, Healthcare Reform - We've Only Just Begun, Single Payer California, and Monday Night Cancer Club.

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