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TL;DR
Outside of all discussions re: possible increase demand for XRT, possible increased patients, possible increased indications.... the year-on-year national cost and reimbursement for rad onc is dropping. It must increase by ~30-40% (ie projected growth in rad onc MD numbers) over the next 10 years so that rad onc MD salaries will not drop. This will be unprecedented/unlikely. Alternatively, rad oncs must increasinglymake successfully demand more of a percent of their collections.
Suppose all of the following are true:
1) Spending, and reimbursement, in radiation oncology have held steady or slightly declined for the last 10 years. Reasons: decreasing fractionation, steady/decreasing XRT utilization rates, and moving to SBRT and SRS e.g. (which reimburses less than high-fraction IMRT), and a decline in IMRT reimbursement. There are numerous lines of evidence for this; e.g., Medicare rad onc allocations were about ~$1.67 billion in 2012 and ~$1.58 billion in 2018. This number might have been as high as $2.2 billion in 2012. Suffice it to say the number is going down it seems.
2) Given #1, assume "average" rad onc spending makes up about 7% of all cancer spending (~$2 billion on average out of ~28.7 billion CMS cancer spending e.g.) in 2012 and rad onc won't claim a GREATER share 5-10y from now. (I.e., systemic/biologic spending will outpace rad onc spending.)
3) This ~7% figure will hold steady over time, perhaps decrease and little evidence it will increase.*
4) Let's say that ~550,000 new XRT patients will "occur" in 2020 and the rate of new XRT patients will hold mostly steady over time, at least 5-10y time frames (meaning repeat XRT patients will too; an equilibrium is or will be reached eventually).
5) Given #2, we can calculate about $6.1 billion spent for radiation for all payers in 2012 (7% times 87.5 billion).
6) We can also arrive at this figure another way. We can guess about 480,000 XRT patients in 2012. The average cost of a course of XRT is about $12,000. This gives us ~$5.8 billion (480,000 * $12,000). So the $6.1 billion from #5 and ~$5.8 billion agree very well.
7) Let's assume $6 billion as a round number therefore, and that this $6 billion/year captures ALL rad onc payer reimbursement (including the difficult to quantify repeat XRT business etc.).
8) Given all past ~10y trends, assume $6 billion being the number for 2025 and 2030 (esp given that the average cost of xrt per patient is steady/declining).
9) So...$6 billion seems to be the "pie." And it's a steady pie. And that is optimistic.
Now for the "economics..." if you accept all the above (which seems solid to semi-solid...you can see where this going). In 2012, if we have ~3900 rad oncs, that is $6E9/3900 = $1.5 million billed per rad onc. If we allow ~25% of global per rad onc, that's a $384,000 annual salary on average. In 2020, we will be at $6E9/5000 rad oncs (at best), at a $300,000 annual salary. By 2025 we can assume $6E9/6000 and a $250,000 annual salary. Running these numbers out to 2030 shows a $215,000/year salary is possible in 2030. These are AVERAGES. (And like a single BED calc, maybe it's not the raw number that counts as much as the trend and comparison to another raw number. That trend being there could be a ~30% salary decrease that rad oncs are facing 10y from now.)
Either average salaries will go down in the future, or they won't. If they don't it means only one of two things: radiation oncologists will begin making more of a percent of what they collect, or there will be a historically unprecedented (minor) explosion of the "$6 billion pie." The focus is on the $~6 billion "pie." To be totally transparent, you can pick different numbers to make the salary average predictions be better. But, if we are also still being honest, we can pick numbers making them worse.
*[edit: rad onc's slice of cancer cost pie held steady for commercial 2004-2014 at 4% e.g.]
Outside of all discussions re: possible increase demand for XRT, possible increased patients, possible increased indications.... the year-on-year national cost and reimbursement for rad onc is dropping. It must increase by ~30-40% (ie projected growth in rad onc MD numbers) over the next 10 years so that rad onc MD salaries will not drop. This will be unprecedented/unlikely. Alternatively, rad oncs must increasingly
Suppose all of the following are true:
1) Spending, and reimbursement, in radiation oncology have held steady or slightly declined for the last 10 years. Reasons: decreasing fractionation, steady/decreasing XRT utilization rates, and moving to SBRT and SRS e.g. (which reimburses less than high-fraction IMRT), and a decline in IMRT reimbursement. There are numerous lines of evidence for this; e.g., Medicare rad onc allocations were about ~$1.67 billion in 2012 and ~$1.58 billion in 2018. This number might have been as high as $2.2 billion in 2012. Suffice it to say the number is going down it seems.
2) Given #1, assume "average" rad onc spending makes up about 7% of all cancer spending (~$2 billion on average out of ~28.7 billion CMS cancer spending e.g.) in 2012 and rad onc won't claim a GREATER share 5-10y from now. (I.e., systemic/biologic spending will outpace rad onc spending.)
3) This ~7% figure will hold steady over time, perhaps decrease and little evidence it will increase.*
4) Let's say that ~550,000 new XRT patients will "occur" in 2020 and the rate of new XRT patients will hold mostly steady over time, at least 5-10y time frames (meaning repeat XRT patients will too; an equilibrium is or will be reached eventually).
5) Given #2, we can calculate about $6.1 billion spent for radiation for all payers in 2012 (7% times 87.5 billion).
6) We can also arrive at this figure another way. We can guess about 480,000 XRT patients in 2012. The average cost of a course of XRT is about $12,000. This gives us ~$5.8 billion (480,000 * $12,000). So the $6.1 billion from #5 and ~$5.8 billion agree very well.
7) Let's assume $6 billion as a round number therefore, and that this $6 billion/year captures ALL rad onc payer reimbursement (including the difficult to quantify repeat XRT business etc.).
8) Given all past ~10y trends, assume $6 billion being the number for 2025 and 2030 (esp given that the average cost of xrt per patient is steady/declining).
9) So...$6 billion seems to be the "pie." And it's a steady pie. And that is optimistic.
Now for the "economics..." if you accept all the above (which seems solid to semi-solid...you can see where this going). In 2012, if we have ~3900 rad oncs, that is $6E9/3900 = $1.5 million billed per rad onc. If we allow ~25% of global per rad onc, that's a $384,000 annual salary on average. In 2020, we will be at $6E9/5000 rad oncs (at best), at a $300,000 annual salary. By 2025 we can assume $6E9/6000 and a $250,000 annual salary. Running these numbers out to 2030 shows a $215,000/year salary is possible in 2030. These are AVERAGES. (And like a single BED calc, maybe it's not the raw number that counts as much as the trend and comparison to another raw number. That trend being there could be a ~30% salary decrease that rad oncs are facing 10y from now.)
Either average salaries will go down in the future, or they won't. If they don't it means only one of two things: radiation oncologists will begin making more of a percent of what they collect, or there will be a historically unprecedented (minor) explosion of the "$6 billion pie." The focus is on the $~6 billion "pie." To be totally transparent, you can pick different numbers to make the salary average predictions be better. But, if we are also still being honest, we can pick numbers making them worse.
*[edit: rad onc's slice of cancer cost pie held steady for commercial 2004-2014 at 4% e.g.]
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