Inflation Reduction Act Impact on Oncology Reimbursement

[Graklee]

Hello, first-time poster on this forum, I'm creating this thread to ask a question about the impact of the recently passed (2022) Inflation Reduction Act on heme/onc compensation. Some caveats, I know predicting future compensation is always difficult and not a reason to choose/not choose a sub-specialty, but I do want to be as informed as possible as I consider a future career path.

From what I understand, much of the compensation in Heme/Onc that accounts for the high salary for a non-procedural specialty derives from a cut of chemo/immuno therapy infusions which are reimbursed under Medicare part B. However, starting in 2028, the Inflation Reduction Act allows for medicare to negotiate prices with pharmaceutical companies on drugs within Medicare part B, which would significantly cap prices and therefore decrease the cut going to heme/onc (and other) doctors There are some significant exclusion criteria, notably that drugs are ineligible for negotiation if they have been FDA approved for fewer than 9–13 years or have a generic or biosimilar on the market (the articles I'm linking to explain it much better than me ).

Do you think this will impact heme/onc as a community or private practice? Also do you think compensation in hospital employed positions may eventually downtrend to line up with other non-procedural IM subspecialties? Any thoughts would be appreciated!

Links:

https://www.cnbc.com/2022/08/12/drug-prices-passage-of-inflation-reduction-act-gives-medicare-historic-new-powers.html

IRA Medicare Part B Negotiation Shifts Financial Risk to Physicians | Avalere

The Inflation Reduction Act (IRA) was signed in August 2022 and requires the Secretary of Health and Human Services (HHS) to negotiate and publish a "Maximum Fa

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[osprey099]

Nobody knows or can predict what future compensation will be like. If you're a resident, decide on a fellowship based on if you can see yourself doing it for 20+ years. Don't choose a specialty based on perceived income potential (that's premed/med student mindset). There are ways to make a lot of money in pretty much any medicine subspecialty.

Having said that, in my opinion, our field is more shielded than others from broad legislative impacts because pharma companies' financial interests align with ours. Merck made 3.5 billion off Pembro last year. You can bet they and others will lobby like hell to protect or even increase those profit margins regardless of whatever legislation comes about.

 

[solidonc2020]

If you think you want to do medical oncology for x, y, and z non-financial reasons, just know that compensation is quite good currently in comparison to other medicine subspecialties (close to GI and cardiology with overall better QOL in my opinion, likely better compensation than any of the fields that may have better QOL depending on the job like endocrine, rheum, allergy) and concerns about reimbursement should not deter you from the field.

Conversely, trying to predict compensation is nearly impossible and should not be a major reason to choose oncology. I do understand asking though, as I would not have likely chosen to do an extra 3 years of training if I didn't expect some ROI with an improvement in compensation over gen med/hospitalist salaries (such as with endocrine, nephrology, etc). I feel lucky that the field I was excited about through training turned out to be well-compensated, but if it's not the right field for you independent of the money you will not be happy.

ETA: That article is from 2022 and salaries have only increased since then.

 

[whoknows2012]

I get your point and it’s not an invalid question but onc salaries others have mentioned cont to increase nicely year over year faster than many other specialties (saw recent chart at 4%/yr) top ~5 out of all specialties surveyed. Go into hem/onc if you’re interested in it. It’s going to be impossible to predict future salaries…