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After that recent episode with Scott Haas (EP365), where we talked about the real deal with PBM contracting, I kicked into high gear trying to untangle this whole apocalyptic honky-tonk we call benefits for prescription drugs. Notice I did not say prescription drug benefits because that would imply that pharmaceuticals are only charged for under the umbrella of pharmacy benefits. Ha ha, that would be just too easy. No, some pharma drugs are charged as part of patients\u2019 medical benefits. An amazing primer for what that looks like in the real world follows. \xa0

Just pointing out that any self-respecting healthcare market distortion deserves another, and if anything qualifies as a market distortion, it\u2019s buy and bill\u2014what I talk about with Dr. Mitchell in this healthcare podcast. In the following weeks, we\u2019ll chat about how the market has responded to this buy and bill market distortion that we talk about in this episode. So, next week, we\u2019re gonna get into all the different kinds of bagging: the so-called brown bagging, the white bagging, the clear bagging \u2026 and what is this newfangled gold bagging? Spoiler alert there. Tune in next week.

And here\u2019s another spoiler alert: While in this show today we chat about how provider organizations tend to make somewhere between 4.5% and 20% additional over drug costs, there was a recent study claiming that 4.5% to 20% is chump change. Some provider organizations are, in fact, making four times to six times the cost of the drug\u2014a very expensive drug, mind you (lots of zeros here)\u2014in profit. In the show in two weeks, I\u2019m speaking with April Yongchu and Erik Davis from USI about exactly and specifically how provider organizations can manage to perform this \u201clet\u2019s make hundreds of thousands of dollars today\u201d magic trick. So, with that, here\u2019s your encore.

In the April [2020] issue of Value-Based Cancer Care (that\u2019s a journal), there\u2019s an article talking about a keynote presentation and a study highlighting a big problem for patients with cancer: toxicity. It\u2019s a fact that some chemo agents are pretty toxic, but in this healthcare podcast I am talking about financial toxicity. The financial burden of cancer care has a seriously negative influence on patients\u2019 quality of life.

This keynote speaker quoted in the Value-Based Cancer Care article implored his fellow oncologists: \u201cThink twice before ordering costly interventions that may have little impact on the clinical course,\u201d he said.

This might be difficult for a number of reasons, and one of them is that oncology centers make money, a whole lot of money, sometimes the most money, from infusing cancer medications. It\u2019s this little payment paradigm called \u201cbuy and bill.\u201d The cancer center buys the meds and then gets paid an additional fee to infuse the drug. This fee is a percentage of the drug cost.

You\u2019ve probably heard a lot lately about the skyrocketing costs of some of these cancer agents. Realize that if you\u2019re an oncology center, the higher the drug costs, the higher your revenue. Now consider the patient suffering under the weight of increased cost sharing and employers and taxpayers who are funding this strange payment model.

In this healthcare podcast, I dig into this so-called \u201cbuy and bill\u201d payment model with Aaron Mitchell, MD, MPH. Dr. Mitchell is an oncologist and health services researcher over at Memorial Sloan Kettering.

Aaron Mitchell, MD, MPH, is a practicing medical oncologist and health services researcher. He is an assistant attending at Memorial Sloan Kettering Cancer Center in the department of epidemiology and biostatistics. His research focuses on understanding how the financial incentives in the healthcare system affect physician practice patterns and care delivery to cancer patients. He cares for patients with prostate and bladder cancer.

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04:34 Following the drug and following the dollar.
04:56 The \u201cbuy and bill\u201d system.
05:43 The perverse and problematic incentives of the system.
08:38 \u201cIt creates the incentive for us to gravitate toward the more expensive drug.\u201d
08:42 The hesitancy to address the financial toxicity of drugs for patients.
09:53 Why the only person losing in this situation is the patient.
10:51 The financial impact from the patient perspective.
13:57 Are patients realizing this impact?
14:42 Solving the problem of oncology drug choice.
16:45 Reimbursement reform.
18:24 Capitated systems and incrementalist impacts to reimbursement reform, and what these look like.
23:30 Are we at a tipping point?
23:51 \u201cThe current system \u2026 works too well for too many people.\u201d
25:01 Who isn\u2019t well served by the current system.
25:32 Who has to lead the charge for change.
28:28 Large oncology providers vs small oncology providers in the buy and bill system.

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Check out our #healthcarepodcast with @TheWonkologist of @sloan_kettering as he discusses #oncology #drugpricing and #reimbursement. #healthcare #podcast #digitalhealth

Following the drug and following the dollar. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

The \u201cbuy and bill\u201d system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

The perverse and problematic incentives of the system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

\u201cIt creates the incentive for us to gravitate toward the more expensive drug.\u201d @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Why is there hesitancy to address the financial toxicity of drug pricing for patients? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Why the patient is the only one that loses. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

What\u2019s the financial impact from the patient perspective? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Are patients realizing this financial impact? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Solving the problem of oncology drug choice. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

What should reimbursement reform look like? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

\u201cThe current system \u2026 works too well for too many people.\u201d @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Who has to lead the charge for change? @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

Large oncology providers vs small oncology providers in the buy and bill system. @TheWonkologist of @sloan_kettering discusses #oncology #drugpricing and #reimbursement. #healthcarepodcast #healthcare #podcast #digitalhealth

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Recent past interviews:

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Stacey Richter (INBW34), Ashleigh Gunter, Doug Hetherington, Dr Kevin Schulman, Scott Haas, David Muhlestein, David Scheinker, Ali Ucar, Dr Carly Eckert, Jeb Dunkelberger (EP360), Dan O\u2019Neill, Dr Wayne Jenkins, Liliana Petrova, Ge Bai, Nikhil Krishnan, Shawn Rhodes, Pramod John (EP353), Pramod John (EP352), Dr Eric Bricker, Katy Talento, Stacey Richter (INBW33), Stacey Richter (INBW32), Dr Steve Schutzer (Encore! EP294), Lisa Trumble, Jeb Dunkelberger, Dr Ian Tong, Mike Schneider, Peter Hayes

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