Does owning cancer equipment change treatment patterns?

Does owning cancer equipment change treatment patterns?

Today’s article follows the money trail to expose a different form of bias: the kind that takes place when doctors own their own diagnostic and therapeutic equipment.

For people living with cancer, this kind of bias can have a particularly painful impact.

Radiation therapy brings out medical bias

In the United States, cancer is the second most common cause of death, killing nearly 600,000 Americans each year.

It is also one of the most expensive sectors of U.S. medicine. The annual price tag for cancer treatment is projected to reach $173 billion by 2020, according to the New England Journal of Medicine.

Over the years, radiation therapy has not been immune to cost inflation.

In most cases, the cost of this therapy is influenced by two things: (a) the radiation therapy machine and (b) the length of treatment.

The treating physician determines both. And when that physician has a financial investment in the equipment he or she uses, it’s money — as often as science — that often motivates treatment decisions.

Let’s get one thing straight

Most doctors are mission-driven people who strive to do what’s best for their patients. Those who train for years to help people wouldn’t knowingly compromise a patient’s well-being for financial gain.

But when doctors and hospitals make large capital investments in their own medical equipment, even well-meaning professionals tend to favor approaches that benefit their bottom line.

This ethical grey area sparked the passage of Stark Laws, federal legislation that prohibits physicians from making referrals when there’s a conflicting financial relationship in play.

However, these prohibitions don’t apply to all health services. In fact, they exempt doctors who provide health services in their own offices. Why? Legislators viewed onsite access to diagnostic and therapeutic technologies as an added convenience for patients.

Today, compelling evidence suggests physicians who own and use their own equipment generate more personal income without necessarily improving the quality of medical outcomes. Not in every case, but enough to cause legitimate concern among people living with cancer.

Proof that dollars drive treatment bias

For patients whose cancer has spread (or “metastasized”) to the bone, the pain can be excruciating. While no treatments offer a cure, there are two palliative radiotherapy options that help ease the pain.

The traditional approach is to treat bone metastases with radiation, delivering a limited dose each time over 10 days.

The thinking goes that “fractionating” the total dose into smaller parts helps minimize damage to surrounding tissues. This is important in some clinical situations, particularly when treating cancers of the head, neck or abdominal areas.

But a newer option involves using a higher dose in a single treatment. According to an oncology group trial, the shorter approach offered the same amount of pain relief as the longer treatment for some bone metastases.

And with fewer radiation sessions, overall costs for the single treatment are significantly lower.

When you compare the two, it seems like a no-brainer. Who wouldn’t want a shorter treatment schedule and faster pain relief? One would hope every radiation therapist would embrace this approach.

Unfortunately, that’s not the case.

That’s because many private-practice doctors are reimbursed by the number of therapy sessions they provide. This “fee-for-service” payment model means doctors often choose longer courses of treatment over shorter ones.

More treatments, more money.

For example, a recent study comprised largely of private practitioners with financial investments in their own equipment shows that up to 96% of patients receive the longer course of care – even when they’re eligible for single course radiation therapy for prostate cancer that has spread to the bone.

Compare that to group medical practices where reimbursements aren’t based on a fee-for-service model. In these settings, 76% of doctors report using single fraction radiation for cancer that has spread to the bone.

Lower cost treatment options exist

Advances in engineering and computer delivery systems offer a glimmer of hope that radiation therapy can be delivered in cheaper, faster and more precise ways in the near future.

Today’s more exact therapeutic approaches — hypo-fractionation, radiosurgery and Gamma Knife, among others — deliver precisely targeted radiation therapy over a shorter period.

And use of these newer technologies in the right clinical situations can deliver superior results while reducing costs.

For example, patients whose cancer had spread to some areas of the brain obtained better clinical outcomes when treated with newer machines compared to traditional treatments.

A number of recent clinical trials in the United States, Canada and England highlight the effectiveness and potential cost savings of these newer radiation treatment paradigms.

Breast cancer radiation therapies that once took six weeks are now complete in just four. And for select groups with low-risk breast cancer, radiation therapy can be delivered as a one-time dose in the operating room.

Some men with low-risk prostate cancer can receive non-invasive radiation beam treatments in just five days vs. 35 or more treatments delivered over seven weeks. The clinical outcomes are not only just as good, but also $7,000 less.

Changing cancer practice patterns

Translating these opportunities into common practice will be slow as long as physicians have incentives to use of the machines they already own.

Until we can eliminate the bias of physicians who own their equipment, we won’t deliver the highest quality in the most cost effective ways to patients.

As Upton Sinclair famously wrote, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”

Robert Pearl is a physician and CEO, The Permanente Medical Group. This article originally appeared on

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  • Suzi Q 38

    “…….As Upton Sinclair famously wrote, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”

    Thank you, Dr. Pearl for letting us know that this practice exists.

    Most people are terrified if they discover that they have cancer.
    We do whatever the surgeon says, because he will “cut it out” and then we believe all our problems will be over.

    We also dutifully do whatever the oncologist says, because after all, this is new and scary for us and they know what is best.

    Your article reminds us that the treatment of cancer is big business for not only the doctors who own the machines, but for profit hospitals as well.

    I at least know that I have to do my “homework” and at the very least, ask the right questions.

    It definitely will be more asking questions if need be. Gone are the days when I “blindly” go with what my doctor wants me to do.

    This story is a good example of financial abuse when patients are the most vulnerable.
    Shame on them.

  • Eric Strong

    I am reminded of a neurologist who used to consult at a hospital I previously worked at. I always thought it was crazy that she recommended an EEG for every patient she consulted on, irrespective of the patient’s neurological symptoms. (For laypeople, EEGs are appropriate in only a tiny minority of acute neurological problems.) Then I realized that she was the sole neurologist credentialed to interpret EEGs at the hospital. Didn’t seem so crazy any more.

  • John C. Key MD

    I think this is mostly poppycock. The Stark bill was an unnecessary insult to the whole medical profession. And the silly sequelae: I mean, seriously, is anyone going to prescribe because they have some imprinted Post-it notes on their desk? Or prescribe Humalog because Eli Lilly gave me a cheap stethoscope, hammer, and tuning fork in 1972? Good grief.

    I’ve never owned any chargeable medical equipment. But no matter: the reductio ad absurdum of all this is that any and all physicians are are at risk, or could be tempted by, a desire to run up the bill. It’s pretty easy to come up with a few anecdotal stories whether they be of radiation oncologists, neurologists, or general practitioners. Sure it happens. We’ve all seen it and always will. It’s the way of the world and can’t be eliminated.

    Government and big medicine are not lily-white in this either. Dr Pearl is affiliated with a pretty big entity himself. The gentleman protests too much, methinks.

    The individual physician is the least likely source of financial abuse–much more likely to be from government, big medicine, big pharma. No need to make worried patients suspect their doctors of nefarious motives.

    • Lisa

      Saying there is no need to make “worried patients suspect their doctors of nefarious motives” is just plain out paternalistic.
      I think the studies referenced in the article are more than a few anecdotal studies and points potential problems.

      As a cancer patient, I found this very article very interesting and will consider it when if I ever have to have radiation.

      • John C. Key MD

        That’s your misfortune. You clearly have an overly-expansive view of paternalism. Must be some comfort in cultivated victimhood.

        • Lisa

          Oh, come on this has nothing what so ever to do with vicitmhood. How do you explain the findings of the studies?

          • JR DNR

            Once upon a time, personal attacks wouldn’t be published here. I don’t like the change.

          • Lisa

            Thanks, but the ‘attack’ was pretty mild, imo. And I really am interested in hearing what Dr. Key thinks about the studies.

          • JR DNR

            He responded to me with:

            “Studies? You can make a study show any thing you want to support a given position.”

            The reason it bothers me is that I know doctors treat their patients this way too, but the fact they can act this way in PUBLIC without any shame…

            That’s what gets me. It’s one thing that they get away with it behind closed doors where people can make it into “he said/she said”… but the fact no one cares when they are doing it public says LOADS about the culture of medicine.

          • Lisa

            I get it.

          • John C. Key MD

            You are correct. This site has really declined. Too many non-clinician whack jobs posting on it.

            Studies? You can make a study show any thing you want to support a given position.

          • JR DNR

            The purpose of the site is to bring different players together.

            I didn’t mention anything about a study, only your negative, bullying comment. Sad you respond by another negative, bullying comment.

          • Lisa

            1) I am not a whack job.

            2) This article was originally posted in Forbes, which is not a publication directed at medical clinicians. Only a clinician is qualified to comment on the issues raised in the article? I think not.

            One thing I noticed when I was diagnosed with breast cancer is that my older doctor’s approach to treatment was different than that of younger doctors. Their approach would have cost the system more money (chemo based on tumor size & total load, not on the chances that the cancer would recur as determined by oncotype tests) and I would have been at risks for serious side effects. I don’t know how much my doctor’s treatment decision was influenced my financial factors, but that was in the back of mind when I asked for further testing to determine if I really would benefit from chemo.

            One of the studies on urology noted that reluctance to change prescribing patterns was influenced by the length of time in practice. This confirms what I suspected, so yep studies can support a given study position. But is that the case of the studies in the article? I don’t know – I haven’t read them in detail. But I do think that patients do need to be aware of financial conflict of interests, both on the part of doctors in private practice and for institutions. for profit and not for profit. That is not the only factor to weigh in making a decision, just an indication of possible bias.

          • BC

            Sadly, I think current practice environment has made it difficult for some patients to trust their doctors. Lisa, your skepticism I am sorry to say is totally justified. However, I honestly believe that most oncologists will not give you chemo just to make more money.

            As I alluded to in my other replies, it is also not as straightforward as you might think. Depending on the practice setting, some oncologists may lose money by giving certain types of chemotherapy, or at least not make enough to tempt them to over-treat. Did you know that Oncotype DX is very expensive? I have on a few occasions been billed by the HMO for ordering this test (~$4000), since they didn’t think the test is indicated. Also, the company that owns Oncotype DX sponsors studies and does extensive marketing to expand its intended use. I use the test and think it is often very helpful, but as usual the benefit of the test is over-stated in many instances. Keep in mind that it has not yet been validated by a prospective randomized clinical trial. If Oncotype DX were a drug, it would fall far short of the standards for FDA approval.

          • Lisa

            I’ve seen a lot of advertising for Oncotype DX and yes, I know Oncotype DX is expensive. I had two (two different tumors, with different pathologies). My insurance company paid for the first without any delay, but balked at paying for the second one. (This is the only time I have ever had trouble with a claim). When I requested my second tumor be tested, I knew there was a possibility that this might happen and I was willing to pay for the testing out of pocket if necessary. My insurance company did pay, mainly because Genomic Health contested their decision. They did this even after one of their financial counselors spoke with me and was aware that I was prepared to pay for the test out of pocket and that I didn’t need a payment plan to do so.

            As a patient, I want as much information as possible to make decisions. And in my case, this test was helpful in my decision to opt out of chemo. While I really don’t think my oncologist made his recommendation for chemo based on his financial interest, I do think his recommendation was made in an environment where the standard of care was changing. That makes the process more difficult.

        • Eric Strong

          I don’t think Lisa’s response warrants this type of disrespect.

          “Big Medicine” (whatever exactly that refers to) may be a culprit of unnecessary and/or excessively expensive treatments, but that doesn’t mean private docs aren’t guilty of this as well.

    • BC

      Exactly. It is absolutely true that some doctors’ practice will be driven by a profit motive, but it is not a general rule. The author makes it sound like this is a pervasive problem in radiation oncology (I’m not a radiation oncologist, btw). The reality is not as black and white as he portrays… Consider the following:

      He cites an article that exposes how urologists who own the radiation machine treats a higher percentage of their patients with radiation. On the flip side, urologists who don’t own radiation might be biased to doing more surgery since referring patients to radiation means loss of revenue. Or how about being biased for watchful waiting over treatment because you’re practicing under an HMO contract that makes it not worth the hassle of doing surgery, managing complications, etc.

      He also cites an article that shows radiation oncologists at the VA being far more likely to offer a shorter course of radiation – maybe they have to in order to cut down on the huge waiting list?

      Do you know what really happens in the real world? Patients don’t have insurance coverage or are at the mercy of snail-pace HMO referral bureaucracy and wait until they get a pathologic fracture or spinal cord compression. That’s why they would need a longer treatment course. Medicare mysteriously do not reimburse stereotactic radiotherapy done as an inpatient, so we end up doing a longer-course radiation.

  • BC

    “Today’s article follows the money trail to expose a different form of bias: the kind that takes place when doctors own their own diagnostic and therapeutic equipment.”

    How about the kind of bias that takes place when:

    Insurance companies take money from people and get to keep some of it if they don’t spend it on their medical care

    A large corporate entity accepts money from health plans with the incentive of reducing cost of medical care

    Politicians accept campaign contributions from pharmaceutical companies, EHR vendors, etc.

    Etc., etc.

    Why stop there? What about the bias of being paid to see a patient? Go ahead, put all doctors on flat salary and get rid of private insurance. We’ll save billions from not having to pay CEOs, administrators, billing specialists, etc.

    • Lisa

      I don’t know if the word bias is exactly the word I would like to use; but clearly the profit motive exists in medicine and it has to be questioned. And don’t get me started on $ in politics.

      • BC

        The profit motive is HUGE in medicine, not only should we question it but ideally we should re-structure the whole healthcare industry to move away from doing more and seeing more patients just to make more money. I just laugh at the self-righteous hypocrisy and naivety of pointing fingers at the private practice physicians. Very little of the ill-gotten gains in medicine go to the doctors…

        • Lisa

          There is a difference between a pcp in private practice and a doctor who will profit if a very expensive treatment is prescribed. But medicine should not be a for profit business, either for doctors in private practice or for corporate owned institutions.

  • rtpinfla

    Lets see if I have this correct:

    1) The vast majority of physicians do the right thing for the right reasons for their patients.

    2) A few physicians that use specialized equipment will use their equipment to generate profit.

    3) Therefore, we should take way all the the specialized equipment from all the physicians-ostensibly have 1-2 centers with said equipment that will “do the right thing” to improve the quality of care at a lower price. Yeah right, that always works.

    Based on the article, it seems clear that Dr. Pearl thinks that only doctors are susceptible to looking after their bottom line.

    Does he truly believe that taking such equipment out of the hands of physicians and into the hands of Corpmed and it’s army of accountants and MBA’s will result in more appropriate use of medical procedures without looking at the bottom line? That is nothing short of ludicrous and insulting to physicians.
    If anything, things would get worse. Facility fees, increased travel to “specialty centers”, additional consults with whatever physician is working for the MBA’s at the specialty center, delays in care due to the additional consults (unless the MBA’s plan on assuming all the responsibility for the patient while getting their procedures done). Look at the push for robotic surgery. More expensive, no evidence of improved outcomes, yet pushed by hospitals as the way to go. Do you really think that they are looking out for what is actually best for their patients?
    This kind of thinking is downright scary.

    • Lisa

      I suspect Dr. Pearl, as he the CEO of Kaiser, thinks a not-for-profit model is the best. Different set of conflicts….

  • southerndoc1

    If there is a serious problem here (and I’m not convinced there is), the source is the corrupt RUC, which grotesquely overvalues certain procedures and treatments, and intentionally devalues thoughtful analysis.

    You get what the RUC says you should pay for.

  • subatomicdoc

    Dr. Pearl makes a business case for going to Kaiser Permanente rather its private practice competitors. He argues that less radiation treatments costs less, as an executive with a vested interest rather than as a clinician understanding of the medical literature.

    I am a private practice radiation oncologist in the Northeast. I don’t
    own any equipment. I do recognize there is potential for financial conflicts,
    but there are also clinically important considerations that the author glosses over. That’s understandable since he’s an executive without an oncology background. But to claim the moral high ground, he should back up his opinion with facts.

    Single fraction radiation for bone metastasis is an excellent treatment I offer, but it doesn’t apply universally to all cancer patients. Dr. Pearl only identifies one trial when there are many trials supporting this approach. But it isn’t just financial incentives that drive using multiple treatments. He cited a small study of 78 radiation oncologists employed by the VA hospitals — not the norm for the US employed radiation oncologists as he suggests.

    A larger study just published from Canada, where all radiation oncologists were salaried, showed a much lower rate of using single fraction – 49%. This study also summarized prior research showing single fraction radiation rates of 4-64%. Dr. Pearl cited an extreme outlier; money is
    not the sole factor.

    Dr. Pearl also seems a little muddled about when high dose radiation is used, and how. For breast cancer, it’s well established that we can shorten the course of breast radiation for some patients to 15-16
    treatments from 25. I’m not sure why he mentioned single fraction radiation, aninvestigational approach mostly on protocols, so blithely.

    He also starts mentioning highly expensive equipment for stereotactic radiation. The biology, technique and purpose of treatment with this equipment is different – and although it’s fewer treatments the technical reimbursement received by hospitals is much higher than standard 3D radiation.

    For prostate cancer, Dr. Pearl seemingly accuses radiation
    oncologists of self-referral abuses. In fact, the self-referral issue is
    related more to non-radiation oncologists owning the equipment and the American Society for Radiation Oncology has openly opposed self-referral. But it sounded good when Dr. Pearl writes it — even if it isn’t accurate. And five treatments for prostate cancer is promising but investigational. 2014 NCCN guidelines calls “extremely hypofractionated regimens…an emerging treatment modality”. NOT standard practice.

    The best way for Dr. Pearl to back up his claims is show us Kaiser’s utilization data — inform the readers KP’s rates single fraction radiation for bone metastases and five fractions for prostate cancer.

    • Mary Ann Rose

      As a radiation oncologist who has practiced for 30 years both in academic settings and in private practices, most recently as Professor of Radiation Oncology at UC San Diego and Medical Director of UCSD’s North County facility, I strongly support my colleague’s assertion that most radiation oncologists try to do what is RIGHT for the patient. There are situations which are appropriate for the reduced number of treatments, known as hypofractionation, but this is not yet considered standard of care for all breast or all prostate patients. As for single fraction treatment of bone metastases, many of us do use this approach in patients who have limited life expectancy, but our professional society ASTRO’s position paper on the subject does inform us that patients treated this way are more likely to need retreatment. As systemic treatments improve and patients are living longer, the late effects of high dose/short course radiation may prove to be unacceptable in patients with metastatic disease but a relatively long life expectancy. We need to do the appropriate thing, not the expedient or the cheapest thing for our patients.

      In my former position, I treated Kaiser patients for the last three years since Kaiser has a contract with UCSD for radiation therapy services on a set case rate basis–in other words UCSD gets paid a certain amount per case no matter what the recommended treatment. I am happy to say this worked well for all parties, including the patients who were pleased with our services, and the physicians, who were free to treat according to best practices. I am glad that Kaiser trusted me to do the right thing, despite Dr. Pearl’s misgivings.

      • subatomicdoc

        Thanks for sharing, Mary Ann. I think there are good reasons to limit overutilization, and there are some offenders. But it’s very easy for a CEO of a large healthcare organization to brand independent doctors as too expensive, appealing to crowd opinion rather than persuading with quality data.

        Kaiser should share its data if it’s going to make blanket statements suggesting it’s cheaper than its competitors. A recent publication suggests that privately insured patients may pay more when hospitals buy physician practices and doctors are employed rather than independent:

        If Dr. Pearl chooses to discuss a medical discipline he doesn’t understand well based upon utilization, he could at least share Kaiser’s for comparison. If he shared actual charges from KP, that would be even more generous for informed readers to compare to independent practices’ prices.

  • BTM_MD

    The quality of the discussion around this topic reflects its
    importance. As a practicing radiation oncologist at Kaiser Permanente with directly relevant clinical experience, I’m hoping to address some of the points raised in critiques of my colleague’s article and help contribute to the thoughtful debate.

    It is true that there are valid clinical considerations that
    affect a treating physician’s decisions around the type and direction of radiation therapies. In my experience there have been some instances when I will recommend a longer course of radiation fractionation for patients whose clinical presentation would likely render a shorter course of radiation less effective. Simultaneously it is clear to
    me that my group practices differently than many other health care models around us. As an additional example beyond those cited in the piece, it is interesting to note that at times billing for different parts of radiation preparation on the same day is not allowed. I have spoken with providers in a fee-for-service environment that will have patients return for multiple separate visits on different days to complete the tasks that could be completed in one day. This occurs whether or not it is less convenient or more expensive for the patient. It is decisions like this stemming from relatively hidden incentives that I think
    Dr. Pearl fairly points out are not always wrong, but should be evaluated. Some of the previous comments shed light on other aspects of the relevant medical research.

    While it’s true that clinical factors rightfully affect how we treat an individual patient, it’s equally true that payment systems and self-referral arrangements create a financial incentive for some treating physicians who own the equipment. The question is whether or to what degree that financial incentive affects clinical decisions.

    Like most physicians, I went into medicine to first and foremost help people and provide care; I’m affronted when someone questions my
    dedication to my patients. But is it really so unreasonable for patients to ask whether incentives play a role in our recommended treatment?

    While I don’t agree that Dr. Pearl’s column asserted that financial incentives are the only factor affecting treatment decisions or that
    independent practices are the only type of practices susceptible to different incentives than others (as some comments suggest it did), there are studies, including a report by the Wall Street Journal,
    that suggest self-referral incentives play some part in influencing decisions about treatment options in some cases.

    As oncologists, we can rationalize a flawed system, be shocked that patients might question our motives, or have a constructive dialogue about the issue. I’m pleased to see that we’re choosing the latter.

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