what is your thought about this drug pricing article?

[HemOncCheng]

If I interpret the data correctly, the difference in % is huge, not sure how to interpret the dollar difference. How can physician practice survive and still get a good pay given the much upper hand hospital systems have in profiting from the drug? Would love to know others perspective/experience.

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[osprey099]

If I interpret the data correctly, the difference in % is huge, not sure how to interpret the dollar difference. How can physician practice survive and still get a good pay given the much upper hand hospital systems have in profiting from the drug? Would love to know others perspective/experience.

I think this is why a lot of previously independent practices are having to sell to hospital systems or get acquired by private equity or management organizations like US Onc.

I do think that value based care is the future and when/if VBC becomes the main driver for compensation, the drug margin aspect and whether a practice is eligible for 340b pricing becomes less important.

 

[TexasMed22]

I think this is why a lot of previously independent practices are having to sell to hospital systems or get acquired by private equity or management organizations like US Onc.

I do think that value based care is the future and when/if VBC becomes the main driver for compensation, the drug margin aspect and whether a practice is eligible for 340b pricing becomes less important.

Do you really think value based care is ever going to happen? If that's the case, I would think preventative family med and peds would get paid the most, and neurosurgeons operating on people with a 6 month life expectancy would get paid pennies.

The above situation seems highly unlikely to occur in the US in the near future to me

 

[osprey099]

Do you really think value based care is ever going to happen? If that's the case, I would think preventative family med and peds would get paid the most, and neurosurgeons operating on people with a 6 month life expectancy would get paid pennies.

The above situation seems highly unlikely to occur in the US in the near future to me

I certainly hope VBC never happens. But the reality is the OCM and now EOM from Medicare is in-play as we speak, although EOM isn't scheduled to finish until 2028. VBC is probably not going to be the only determinant of pay, but likely to be a significant piece of how much Oncologists get paid in the future. I hope I am wrong though.

 

[HemOncCheng]

Do you really think value based care is ever going to happen? If that's the case, I would think preventative family med and peds would get paid the most, and neurosurgeons operating on people with a 6 month life expectancy would get paid pennies.

The above situation seems highly unlikely to occur in the US in the near future to me

Given what I see from the real world, I intend to agree. There are so many motivations and players in the system. Patient care is not always the priority.

 

[bobsmith]

I think this is why a lot of previously independent practices are having to sell to hospital systems or get acquired by private equity or management organizations like US Onc.

Yep, I feel like the calculation for these independent practices is basically, "do I want a larger slice (percentage wise) of my current, smaller pie, or a smaller slice (percentage wise) of bigger pie?

The math ends up favoring the latter; add in aging physicians who don't want to deal with increasing management problems/complexity, and I can see why so many of them have sold.

Problem is, once the pies start to get worse tasting (or God forbid, smaller), you've lost your control over the whole baking operation!

(maybe I took the analogy too far)

 

[osprey099]

Yep, I feel like the calculation for these independent practices is basically, "do I want a larger slice (percentage wise) of my current, smaller pie, or a smaller slice (percentage wise) of bigger pie?

The math ends up favoring the latter; add in aging physicians who don't want to deal with increasing management problems/complexity, and I can see why so many of them have sold.

Problem is, once the pies start to get worse tasting (or God forbid, smaller), you've lost your control over the whole baking operation!

(maybe I took the analogy too far)

I think this is a great analogy.

I do think that private practices is the better financial choice, even if reimbursements are declining. We oftentimes get hung up by total compensation and RVU numbers that we oftentimes forget about taxes. As a partner/business owner of a private practice, there are so many tax deductions you can take advantage of (deducting K1 losses from personal tax, real estate deductions, etc). Im not a tax professional but I wouldn't be surprised if the take home pay of a 600k earning private practice partner was greater than a 700k earning W2 employed oncologist..

 

[HemOncCheng]

also, my private practice attending from my residency always told me never, ever employed by hospital, although hospital has upper hands, because you lose control. I think it really depends on what you are looking