Medicare Doctors Waste Billions, Manipulate Poor and Ethnically Diverse

NYAPRS Note: This excerpt from a recent ProPublica study (full article linked at bottom of page) highlights the prescribing disparities among doctors who serve Medicare enrollees. While NYAPRS has continuously advocated for “prescriber prevails” legislation, and maintain the importance of doctor preference when it comes to types of medication, we also understand that rampant abuse of the Medicare drug benefit actually serves to increase costs for everyone. Without proper oversight of this issue, persons experiencing poverty or who live in ethnically diverse urban neighborhoods will continue to be taken advantage of by a few doctors who can make more money from the higher costs of expensive prescriptions.

 

Medicare’s Failure to Track Doctors Wastes Billions on Name-Brand Drugs

Charles Ornstein, Tracy Weber and Jennifer LaFleur, ProPublica, Nov. 18, 2013

 

Medicare is wasting hundreds of millions of dollars a year by failing to rein in doctors who routinely give patients pricey name-brand drugs when cheaper generic alternatives are available.

ProPublica analyzed the prescribing habits of 1.6 million practitioners nationwide and found that a tiny fraction of them are having an outsized impact on spending in Medicare’s massive drug program.

Just 913 internists, family medicine and general practice physicians cost taxpayers an extra $300 million in 2011 alone by disproportionately choosing name-brand drugs. These doctors each wrote at least 5,000 prescriptions that year, including refills, and ranked among the program’s most prolific prescribers.

Many of these physicians also have accepted thousands of dollars in promotional or consulting fees from drug companies, records show.

While lawmakers bitterly disagree about the Affordable Care Act, Medicare’s drug program has been held up as a success for government health care. It has come in below cost estimates while providing access to needed medicines for 36 million seniors and the disabled.

But this seeming fiscal success has hidden billions of dollars lost to unnecessarily expensive prescribing over the program’s eight-year history.

The waste is exacerbated by a well-meaning benefit written into the drug program, known as Part D: Low-income patients pay less than $7 per prescription regardless of a medication’s cost. The unintended consequence is that doctors can dole out name brands with little fear of pushback from patients about price.

Taxpayers spent $62 billion last year on Part D — more than a third of it on this low-income subsidy.

Part D’s Ethnic Hot Spots

Along one mile-and-a-half stretch of Los Angeles’ Koreatown, seven primary care doctors have some of the highest rates of name-brand prescribing in the country. Nearly 3,000 miles away in Brooklyn, N.Y., a single building in a Russian community houses six such doctors.

By mapping doctors who favor name brands, ProPublica found unexpected clusters in ethnic neighborhoods in and around the biggest cities. The average cost of a Part D prescription in these enclaves can be more than 50 percent higher than that of surrounding areas, the analysis showed.

Researchers have previously noted regional differences in the way doctors prescribe drugs. But ProPublica's analysis aimed to unravel which individual doctors drive name-brand prescribing and what, if anything, they had in common.

Many worked solo or in small groups. Often they received their medical training outside the United States, records show.

Doctors’ drug choices can be influenced by many things — their peers, patient requests, a chat with a sales rep or studies in medical journals. In recent years, concern about undue influence has prompted many academic medical centers and large group practices to ban sales reps and to refuse free samples.

But many physicians in ethnic communities continue to embrace these relationships. When reporters visited offices in such neighborhoods of New York City and Southern California, drug reps crowded the reception counters as they unloaded rolling suitcases full of samples or waited to speak to the doctors.

Chinatown is one of the most densely populated parts of Manhattan. Outdoor fish markets crowd next to storefronts selling counterfeit handbags and pirated DVDs. Every block seems to have at least one pharmacy, and hundreds of medical offices are stacked above and around them. More than 90 percent of Part D prescriptions written in 2011 by these doctors were for the poor, Medicare data show.

The neighborhood is home to 20 high-prescribing primary care doctors who disproportionately favor name brands.

One of them, internist George Liu, is a founder and longtime leader of a prominent Chinese-American physicians’ association. In 2011, Liu wrote more than 9,000 prescriptions — 47 percent for name brands. By comparison, all internists in New York used name brands, on average, only 27 percent of the time.

Liu, who specializes in diabetes, said he does his own research on drugs and doesn’t depend on sales reps. A “new drug has a reason why it’s on the market,” he said.

Liu has given lectures for the makers of his favored drugs, he said. Three of his top 10 drugs are made by Eli Lilly, which has paid him $123,000 since 2010. One Lilly osteoporosis treatment, Forteo, cost Medicare $1,140 for a month’s supply.

Liu said scrutinizing how doctors use name brands is an "incorrect way of looking at medical care." He and his peers are saving Medicare money, Liu said, by staying open long hours and keeping patients from costly emergency room visits.

In an office nearby, Dr. Henry Chen praised Part D for making it easy for poor patients to get name brands. He said it’s wrong that state Medicaid programs for the poor and some private insurers force doctors to get prior approval before prescribing them.

Chen wrote more than 50,000 prescriptions in 2011, placing him among the top 100 prescribers nationally in Part D. Forty-five percent of his prescriptions were for name brands. He said picking a drug is like choosing how to get from New York to Washington.

“You could drive a Mercedes-Benz. You could drive a Rolls-Royce. Then you can drive a horse,” he said. All three would get you there, he said, “but the speed and the quality is different.”

Chen, who also has an office in Brooklyn, was paid $11,400 to deliver promotional talks for Eli Lilly and Merck last year. In 2011, he received more than $2,500 in meals from Lilly alone. Two of the drugs in his top 10 are made by Lilly and another by Merck.

Dartmouth researcher Morden said doctors in these areas are shifting the excess costs to others. “The other person one neighborhood over who’s getting a generic product is subsidizing the brand products for that whole neighborhood,” she said.

Not everyone in Chinatown defends such prescribing.

Dr. Perry Pong, chief medical officer of a local health center, was dismayed to hear that his colleagues stood out for pricey drug choices: “That’s bad. I’m ashamed of that.”

Pong said his center tells doctors to use generics first. But Medicare’s figures show some haven't done so, and Pong said he couldn't explain it.

http://www.propublica.org/article/medicare-wastes-billions-on-name-brand-drugs?google_editors_picks=true