Drug-Addicted Oncology Practice: The Drug Test.

Purpose: The buy-and-bill model of pharmaceuticals has been an economic reality for medical oncology practices for more than 30 years. Infusion services, once just a supportive service, grew exponentially in most practices between 1991 and 2000, to the point at which revenue from these services created a high, which made all things possible, including care of underinsured or uninsured patients. This altered state was further enhanced in the early part of this past decade when the introduction of high-cost chemotherapeutics and biologic agents created the euphoria of big business and a true dollar distortion for even the smallest oncology practice.

Results: In 2005, government and payer intervention forced average wholesale price to average sales price conversion to reduce the drug effect. Concurrently, payer scrutiny of utilization and medical necessity with further dose reductions, equating to margins, led many practices to experience painful drug withdrawal symptoms. Despite the enormous financial risk for unreimbursed expense and acknowledged spiraling decline of drug margins of greater than 30% since 2002, the seductive possibility of a financial fix keeps the practices hooked.

Conclusion: Many practices will make poor financial choices and will gamble with their financial health by consuming precious resources to support the habit. We propose the drug test: Run your practice financials without drugs. Can you cover the total practice expense without drugs? If not, determine your level of dependency on the drug margin, and adjust your service lines and salaries accordingly. We issue the following warning: Drug dependencies may be hazardous to the financial health of your organization.