Show Us the Money: Medicare Data Disclosure Highlights Expensive Treatments

In an unprecedented action, on April 9, 2014, CMS publicly released data disclosing Medicare payments made to physicians in 2012. CMS Principal Deputy Administrator Jonathan Blum  told the media on the morning of the release that the reasons behind the disclosure were three-fold: (1) because the public had a right to know; (2) to help understand geographic variation in spending; and (3) to aid in the identification of fraudulent activity. Yet, in the flood of responses to the release, different patterns in the data became evident and other, maybe unanticipated, discussions arose. Many have noted that oncologists and ophthalmologists make up two of the three most highly billed types of providers on the data list. Blum and other CMS representatives acknowledged this pattern and stated that these higher numbers were due to more expensive drugs. In addition, recent reports have emerged that highlight these treatments and question their necessity in the presence of less expensive alternatives.

Data Disclosure

According to an analysis by the Washington Post, the Medicare data revealed that, in 2012, the highest Medicare-paid specialists were ophthalmologists, oncologists, and pathologists. While the report noted that many factors could explain that trend, including “costly overhead” that necessitate costs to be forwarded to pharmaceutical companies or medical device manufacturers, the piece focused on the role fraud might play in explaining the extremely large reimbursement amounts received by some physicians. In general, most other reports on the subject also evaluated the disclosure as a means of fraud detection. A Reuters story noted the ecstatic reaction of lawyers representing whistleblowers in Medicare fraud cases that now may have potential incriminating evidence at their fingertips. Yet, viewing these numbers in light of other recent findings with regard to and in response to allegations of overspending on certain types of treatments in the field of oncology and ophthalmology, perhaps the investigative lens should be widened to analyze these trends in treatment as well.

Treatments Questioned

Although not directly related to the Medicare data disclosure, a recent perspective published in the New England Journal of Medicine is relevant to this discussion. According to this piece, high cost cancer drugs are dominating patient and provider options. The study’s authors reference estimates that reveal that one year of treatment for cancer per patient using new drugs costs over $100,000. Further, the article indicates that this cost is both borne by the patients and other payers and that these high prices form barriers to comparative effectiveness trials that could establish the efficacy of alternative, cheaper drugs. In this light, these authors might argue that the extravagantly high Medicare payments made to oncologists evident in the 2012 data is a function of this new cancer drug market that protects itself against cheaper interlopers.

Similarly, Boston University reported on the dominance of the macular degeneration treating drug Lucentis® in the field of ophthalmology. This treatment is ranked as one of the most heavily reimbursed procedures by Medicare and many ophthalmologists have blamed their high fees on the cost of this single drug which is six times more expensive than an alternative product, Avastin® that is typically used to treat cancer but is used off-label for macular degeneration as well. The BU report described the findings of  Professor Manju Subramanian, who says that while treatment with Lucentis costs $50,000 per year, Avastin, which Subramanian claims works equally well, rings in at $650 per year. Both Lucentis and Avastin are owned by the same company, which would stand to lose millions if providers begin to prescribe the less expensive option.

Oncologists Respond

The flood of response and reactions to the Medicare data release included formal statements released by several professional associations in the oncology field, including the American Society of Clinical Oncology (ASCO), the American Society of Hematology, the American Society for Radiation Oncology, and the Association of Community Cancer Centers. While each of these groups affirmed their support for greater transparency in Medicare payments to physicians, each entity also expressed concern over the release of the data without context or explanation of the details of the payment system. For instance, the statement released by ASCO asserted that “[m]ost of the amounts shown in the Medicare database for oncologists are not, in fact, revenue to oncology practices. Instead, these Medicare payments merely cover the upfront costs of purchasing drugs for patients.” While these statements certainly may quell debate about over-the-top reimbursements as to doctors’ salaries and, perhaps, even foreclose allegations of fraud, they do not address the root of the problem, which is that expensive treatments appear to dominate certain fields, causing staggering, and perhaps, unnecessary reimbursement amounts.

Study Questions Government’s $1.3 Billion Stockpiling of Tamiflu® and Relenza®

Researchers at the Cochrane Collaboration and BMJ (formerly British Medical Journal) are questioning the U.S. government’s spending of $1.3 billion on stockpiling antivirals such as Tamiflu® and Relenza®, noting that there is no credible evidence demonstrating the two neuraminidase inhibitors lower hospital admissions and complications of influenza. While clinical trials showed that influenza-like symptoms in Tamiflu and Relenza takers were alleviated a half-day sooner than patients who took a placebo, the antivirals actually increased occurrences of nausea, vomiting, headaches, psychiatric disturbances, and renal events. Researchers also found that there was insufficient evidence to demonstrate Tamiflu and Relenza prevent person-to-person spreading of influenza.

“We now have the most robust, comprehensive review on neuraminidase inhibitors that exists,” said BMJ Editor-in-Chief David Tovey. “Initially thought to reduce [hospitalizations] and serious complications from influenza, the review highlights that Tamiflu is not proven to do this, and it also seems to lead to harmful effects that were not fully reported in the original publications. This shows the importance of ensuring that trial data are transparent and accessible.”

According to Cochrane and BMJ, the evidence that was previously presented to government agencies regarding Tamiflu and Relenza, which subsequently led to the expensive stockpiling of the antivirals, was incomplete. However, the Review, “Neuraminidase inhibitors for preventing and treating influenza in healthy adults and children,” involved 20 Tamiflu and 26 Relenza trials, involving over 24,000 people. “Drug approval and use cannot be based on biased or missing information any longer,” stated review authors Dr. Tom Jefferson, Dr. Carl Heneghan, and Dr. Peter Doshi. “We risk too much in our population’s health and economy. This updated Cochrane review is the first time a Cochrane systematic review has been based only on clinical study reports and regulator’s comments. It is the first example of open science in medicine using full clinical study reports available without conditions. And therefore the conclusions are that much richer. We urge people not to trust in published trials alone or on comment from conflicted health decision makers, but to view the information for themselves.”

According to Cochrane, “the review clearly recommends that guidance on the use of both neuraminidase inhibitors (oseltamivir and zanamivir) in the prevention or treatment of influenza should be revised to take account of the evidence of small benefit and increased risk of harms.” In addition, given the lack of evidence that supports original claims of the antivirals’ benefits, the review raised questions on whether stockpiling of the drugs is still justifiable.

Vermont’s Single Payer System Slow Down

On May 28, 2011, Gov. Peter Shumlin signed Act 48 into law, which calls for a three-stage implementation of a publicly-financed universal health care system by 2017. The goal of Act 48 is an eventual state-funded and operated single-payer system. It’s three years later, however, and what momentum the Act had is starting to slow down, especially as the Governor is expected to release the finance plan for the project.

Single Payer System Design.

Vermont’s move to a single payer system was designed to meet the federal requirements the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA). In doing so, it may take advantage of federal monies targeted for Vermont’s Health Insurance Exchange and to petition for federal waivers that would streamline Vermont’s reform. The system should extend coverage to each of Vermont’s 620,000 residents while containing soaring health care costs.

Vermont’s plan establishes a state Health Insurance Exchange, as mandated by new federal health care laws, that will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters. The exchange will be managed by a five-member board which sets reimbursement rates for health care providers and streamlines administration into a single, unified system. On the Exchange, Vermont residents and small employers will be able to compare rates from a variety of plans and enroll in the plan of their choice. Among the criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.


There are many benefits to a single payer system. When the government owns and operates one health insurance plan for all residents, it sets a single price for each medical procedure. These prices tend to be lower because the government is negotiating one rate for all citizens. Administrative costs are also lower because there is no insurance company. Physicians send their bill to the federal government.


Of course, it’s not quite that easy – single payer system also has several problems. First, the government is the one to make difficult decisions about what benefits will and will not be covered. It could theoretically be up to the government to determine whether or not a patient will receive things like prescription drugs or dentist visits. Some single payer systems are associated with longer wait times for medical care, however a recent study by the Commonwealth Fund found that while some single payer systems have longer wait times, others see patients quicker than here in the United States.

Pause in the Process.

Under Act 48, Governor Shumlin was required last year to outline some financing options for lawmakers to consider but that has yet to be done.  The legislation required that the state provide an outline on how it plans to raise the estimated $1.7 billion to $2.2 billion to finance the future single payer system. At the beginning of the current legislative session, the governor said a menu of financing options would be released in April for legislators to discuss. Now, Governor Shumlin says he will wait until 2015 for the release. Despite the delay in developing the financing plan for the state’s single payer system, Shumlin said in a recent interview that he still thinks there’s enough time to meet his target date of 2017 for Vermont to become the first state in the country to implement a single payer health care system.

“I believe that we will collectively come to the same conclusion, that moving to a system where you spend less money for better quality and better outcomes,” said Shumlin. “Combined with a payment system where we all, based on our ability to pay, (will) lead to prosperity and an affordable quality health care system for all.”

He offered a slightly different reason for the stall in another interview last February, when he said the decision to delay unveiling the finance options was made over the past several weeks. “We have a very good business advisory group … that’s helping us to put together a package that will work for Vermonters as well as for businesses,” he said. “As we’ve gotten into the weeds of the various details that need to be ready to lay out a menu of options, there’s pretty broad agreement that we’re just not there yet.” Either way, it’s clear Vermont needs more time.

Fresh Faces to Figure Things Out.

Governor Shumlin has made some new hires to help him with figuring out details for the Exchange. Agency of Commerce and Community Development (ACCD) Secretary Lawrence Miller will become Senior Advisor to the Governor and Chief of Health Care Reform, where he will be tasked with overseeing the state’s health care reform efforts and transition to Green Mountain Care. He will report directly to the governor. Patricia Moulton will replace Vermont Administration Secretary Lawrence Miller when he moves up to advise the Governor.

In a recent interview, Miller commented, ““We know that concern about health benefits holds people back from striking out on their own and starting new businesses, and it keeps people locked in jobs for the wrong reasons…Health insurance is also a huge cost factor for all enterprises, including our schools.  We obviously have to do something different. I am encouraged that Vermont’s efforts at cost containment are beginning to bear fruit, and I am ready to help move us forward.”

Global Budget Payment.

Recent reports indicate that at least one hospital in the state will begin testing a “global budget payment” system. Global budgets are set payments determined by state regulators to care for the population a hospital serves, as opposed to the hospital billing for each individual service it provides. With this program, if the hospital exceeds its budget it loses money. The budget is based on the hospital’s historic revenue with adjustments for inflation and changes within the population it serves.

For more information on health reform in Vermont, please see Michelle Oxman’s post, “Highlight on Vermont: Implementing the ACA on the Road to a Single Payer System,” from February, 2014. She reviews the struggles Vermont is having with its Health Insurance Exchange and the state’s struggle to provide coverage for its uninsured population, which is the highest in the country.

Official Testifies About HRSA’s Health Workforce Investments, Goals, Successes

On April 9, 2014, Rebecca Spitzgo, Associate Administrator of the Bureau of Health Professions in the Health Resources and Services Administration (HRSA), testified before a Senate Subcommittee on Primary Health and Aging regarding the nation’s primary care workforce needs and HRSA’s activities and in this area. In light of recent investments from the American Reinvestment Recovery Act of 2009 (ARRA) (P.L. 111-5) and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), Spitzgo’s testimony focused on: (1) recent investments to strengthen the primary care workforce; (2) new efforts to build a primary care workforce; (3) diversity programs; and (4) training for comprehensive primary care.

HRSA’s Mission and Focus

An agency of HHS, HRSA is the primary federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable. HRSA was created in 1982, when the Health Resources Administration and the Health Services Administration were merged. Its stated mission is to improve health and achieve health equity through access to quality services, a skilled health workforce, and innovative programs. In its efforts to strengthen the health care workforce, HRSA’s workforce programs emphasize the training of the next generation of primary care providers, strengthening up the primary care training and development infrastructure, providing incentives for students to choose primary care and to practice where the Nation needs them most, and repaying loans for primary care providers willing to work in some of the Nation’s most underserved areas.

Recent Investments to Strengthen the Primary Care Workforce

In her testimony, Spitzgo stated that, to date, ACA and ARRA investments have resulted in:

  • the training of an additional 1,700 primary care providers, including physicians, advanced practice nurses, and physician assistants, as well as 200 behavioral health providers;
  • the doubling of the numbers of clinicians in the National Health Service Corps (NHSC) from 3,600 in 2008 to nearly 8,900 in 2013; and
  • nearly 1,600 advanced practice nurses in the NHSC and nearly 2,600 nurses in the NURSE Corps working in high need communities.

Spitzgo also noted that the ACA provides $230 million over five years to fund the Teaching Health Center Graduate Medical Education (GME) program, which has expanded residency training for primary care residents and dentists in community-based ambulatory patient care settings, including HRSA-funded health centers. According to Spitzgo, this program supported more than 300 primary care resident full-time equivalents (FTEs) in 21 states in academic year 2013-2014, and is expected to support nearly 600 FTEs in academic year 2014-2015.

New Efforts to Build a Primary Care Workforce

Spitzgo testified as to the several new programs and initiatives to build a better primary care workforce contained in the President’s FY 2015 Budget, including:

  • A workforce initiative to support the training of 13,000 new physicians by 2024 and grow NHSC clinicians from 8,900 in 2013 to 15,000 in by FY 2015.
  • A new residency program, the Targeted Support for GME program, will build on the Teaching Health Center GME program, focusing on residency training in ambulatory, preventive care delivered in team-based settings. This new program includes a $100 million set aside for children’s hospitals in FYs 2015-2016, to be distributed via formula that will continue to support the same types of disciplines currently funded through the Children’s Hospitals GME Payment program.
  • Continued support of the NHSC.
  • A new $10 million Clinical Training in Interprofessional Practice program, which will support community-based clinical training in interprofessional, team-based care setting.
  • $4 million for the Rural Physician Training Grant program to provide support for medical schools to recruit and train students interested in rural practice.

Diversity Programs

In her testimony, Spitzgo stressed HRSA’s success in facilitating a diverse healthcare workforce. She offered the following statistics:

  • Underrepresented minorities and individuals from disadvantaged backgrounds accounted for approximately 45 percent of those who completed HRSA’s health professions training and education programs during 2012-2013.
  • More than half of the nearly 1,100 NHSC scholars and residents in the pipeline are minorities.
  • In FY 2013, African American physicians represented 17.8 percent of the Corps physicians, which exceeds their 6.3 percent representation within the national physician workforce.
  • In FY 2013, Hispanic physicians represented 15.7 percent of the Corps physicians, exceeding their 5.5 percent representation in the national physician workforce.

Training for Comprehensive Primary Care

Spitzgo’s testimony focused on HRSA investments to support the behavioral health disciplines and the integration of oral health into primary care. With regard to behavioral health, she noted that:

  • NHSC providers (including health service psychologists, licensed clinical social workers, licensed professional counselors, marriage and family therapists, and psychiatric nurse specialists) have increased from 700 in 2008 to 2,440 in 2013.
  • If they count psychiatrists, psychiatric physician assistants, and psychiatric nurse practitioners, more than 2,800 out of nearly 8,900 clinicians in NHSC (as of September 30, 2013) provide behavioral health services.
  • A partnership between HRSA and the Substance Abuse and Mental Health Services Administration (SAMHSA) will train and provide placement assistance for approximately 1,800 additional behavioral health professionals and 1,700 behavioral health paraprofessionals.

Spitzgo further testified that HRSA funds several programs that support training and education necessary to improve the integration of dental care into primary care. Sptizgo also noted that approximately 75 percent of the more than 1,300 dentists and dental hygienists in NHSC work at health centers or health center look-alikes.