Thursday, July 29, 2004
Chicago Tribune: As everyone knows by now, Medicare will be covering prescription drugs, courtesy of flawed legislation that promises to be every bit the financial boondoggle that its harshest critics imagined.
Not everyone recalls, however, that even before the new law was passed, Medicare covered some drugs, including Lupron, a treatment for prostate cancer.
Lupron turned into a scandal, as federal bureaucrats utterly failed to control its use and cost. For years, doctors were billing Medicare hundreds of dollars for each monthly shot they administered to patients, even when the medicine came their way as a free sample.
Finally, Medicare is calling a halt to such blatant profiteering. On Tuesday, the Bush administration proposed cutting reimbursement rates for doctors providing cancer treatments in their offices, at a projected savings of $530 million.
These long-overdue changes wouldn't kick in until 2005. They merely bring the payment schedule of the government health-insurance program in line with prices negotiated long ago by private plans. Nevertheless, the proposals immediately came under attack from doctors who threatened to cut back their practices and send patients elsewhere if the gravy train stops.
Enough, already. No one questions that these same doctors have been grossly overpaid for these particular treatments over the years. Saying the windfall helps compensate them for unrelated operating expenses such as nurse salaries and office equipment sounds an awful lot like the Pentagon trying to justify its infamous $640 toilet seats.
Unfortunately, Medicare's vulnerability to this sort of overbilling has contributed to a culture of corruption in the health-care industry.
In 2001, Lake Forest-based TAP Pharmaceutical Products Inc. paid $885 million and pleaded guilty to a criminal charge of conspiring with doctors to bill the government for free Lupron samples.
TAP was hardly alone. Congress uncovered evidence that at least 10 pharmaceutical companies were manipulating prices for the limited number of drugs covered by Medicare.
This month, a federal jury acquitted eight executives from TAP of charges related to the aggressive marketing of Lupron. The jury determined the sales practices at issue were not criminal. They were plenty disturbing, though.
In fact, the best defense proved to be that gifts, vacations and cash lavished on doctors for prescribing the cancer drug were standard operating procedure across the industry.
Pharmaceutical companies have spent almost $5 billion a year on such freebies, perpetuating a system that at its worst erodes patient trust and pushes up health-care costs dramatically.
In bringing common sense to Medicare payment rates, the Bush administration is rescinding an open invitation to abuse. It is hoped the lesson learned in pricing cancer treatments will help guide implementation of the broader Medicare prescription-drug benefits as they kick in during 2006. While the best course would be killing this disastrous legislation, any effort to reduce waste along the way is welcome.