Today, more than 50 Michigan residents will die from cancer. Over 140 will receive cancer diagnoses and begin the fight of their lives. A new federal proposal could make their battle even tougher. To save money, the Medicare Payment Advisory Commission has suggested that Congress cut reimbursements for medical treatments covered by Medicare Part B. These cuts would make it harder for Michiganians to receive the care they need.
Medicare Part B reimburses doctors for drugs that are administered in an outpatient setting and treat critical conditions, such as cancer, rheumatoid arthritis and autoimmune disorders. Take Behcet’s Disease, a chronic autoimmune disorder generally treated with immunosuppressive drugs. A common outpatient-administered treatment is infliximab, a “biologic” therapy that fights tumors and other inflammation.
Part B used to reimburse doctors, who would pay for these drugs up front, the average sale price of the drugs plus an extra 6 percent to cover administrative costs, such as storage, handling, and staff salaries. However, with the 2013 budget “sequester” still in effect, doctors today only receive the drug’s average sales price plus 4.3 percent for additional costs.
MedPAC would like to cut payments to doctors even further. Their plan would cut doctors’ reimbursement rates by billions of dollars over a five-year period. With lower reimbursements, some clinics would struggle to stay open. There are almost 400 clinics struggling financially across the United States. Forty-three of those are in Michigan.
Lower reimbursements could cause these clinics to either shut down altogether or turn away patients. Due to past reimbursement cuts, 380 American clinics have been forced to close. Of those that didn’t close, about half of community cancer clinics sent patients elsewhere. Ironically, patients turned away from community clinics often wind up at hospital outpatient departments, which costs Medicare substantially more.
Fortunately, various politicians and organizations recognize the harm in Medicare cuts. Last year, the Centers for Medicare & Medicaid Services released a proposal similar to the current MedPAC one, and the Community Oncology Alliance, American College of Rheumatology, the American Society of Clinical Oncology and more than 240 members of Congress objected.
About one in four Michigan residents live in rural areas. These residents should be particularly concerned by MedPAC’s proposal. Rural areas are disproportionately affected by reimbursement rates cuts. After all, it costs more to ship supplies to a rural area, so rural clinics already face tighter margins than other healthcare providers. And when rural patients lose access to their clinics, the next-nearest physician might be a long way away.
For rural patients — and the clinics and hospitals they use — Part B cuts would make a problematic situation even worse. Rural patients tend to be older, poorer, and sicker than those living in urban areas, and rural healthcare providers tend to rely more heavily on reimbursements from public programs.
Those providers are already under immense financial pressure. Since 2008, according to the Community Oncology Alliance, Michigan has seen 34 clinics close and 13 more acquired by hospitals, reducing options for those patients who already had few.
Even hospitals, despite having a size advantage over clinics, are struggling in rural areas. According to the Chartis Center for Rural Health, 19 of Michigan’s 65 rural providers have negative operating margins. As local residents (and hundreds of former employees) remember, Michigan lost Cheboygan Memorial Hospital to bankruptcy in 2012, though its assets were eventually purchased by a larger healthcare company. So Part B cuts could make it harder for rural hospitals to provide treatments, too.
Michigan residents have a lot to lose from Part B cuts. Slashing a program that provides lifesaving care to patients is no way to support them in the fight of their lives.
Mirta Santos is executive director of the American Behcet’s Disease Association in Rochester.