The Student News Site of North Carolina A&T State University

The A&T Register

The Student News Site of North Carolina A&T State University

The A&T Register

The Student News Site of North Carolina A&T State University

The A&T Register

    Medication costs more

    CHARLOTTE (AP) — Large nonprofit hospitals in North Carolina are dramatically inflating prices on chemotherapy drugs at a time when they are cornering more of the market on cancer care, an investigation by two newspapers has found.

    The Charlotte Observer and The News & Observer of Raleigh found hospitals are routinely marking up prices on cancer drugs two to 10 times over cost. Some markups are far higher.

    It’s happening as hospitals increasingly buy the practices of independent oncologists, then charge more for the same chemotherapy in the same office.

    Asked about the findings, hospital officials said they are relying on a longtime practice of charging more for some services to make up for losses in others. Hospitals have a name for this: cost-shifting.

    “The drug itself may just be the vehicle for charging for the services that are provided (elsewhere),” said Joe Piemont, president of Carolinas HealthCare System, a $7 billion chain that runs about 30 hospitals.

    The rising price of cancer treatment has financially devastated many families, while driving up insurance costs and causing some patients to put off needed treatments.

    “If you have enough money or good-enough insurance, it may not be an issue for you,” said Donna Hopkins, CEO of Dynamic Medical Solutions, a Charlotte-area company that audits medical bills. “If you’re somebody who doesn’t have that, it can be a death sentence.”

    After examining chemotherapy bills collected by the Observer, Hopkins called the markups “outrageous.”

    Some of the largest markups are made by nonprofit hospital chains that generate millions of dollars of profit each year and have billions in reserves.

    The newspapers obtained and analyzed a private database with information on more than 5,000 chemotherapy claims to get insight into pricing for cancer patients, a group that faces some of the nation’s highest medical bills.

    The drug data, along with scores of interviews, help explain why hospitals have become so expensive — and why health care spending now makes up 18 percent of the national economy.

    Among the markups found:

    — Levine Cancer Institute, owned by Carolinas HealthCare, this year collected nearly $4,500 for a dose of irinotecan, a drug used to treat people with colon cancer. The average sale price: less than $60.

    — UNC Health Care collected $228 for nine units of cisplatin. That was 14 times the drug’s average sales price.

    — Duke University Medical Center received $19,420 for a course of rituximab, used to treat lymphoma and leukemia. Medicare would have allowed a maximum payment of $6,420.

    — Forsyth Medical Center in Winston-Salem, owned by Novant Health, collected about $680 for 50 milligrams of cisplatin. The markup: more than 50 times the average sales price.

    Chuck Moore, the patient in the Forsyth case, got nine weeks of chemotherapy for cancer at the base of his tongue in 2008 and 2009. Though he had good health insurance, he still paid about $15,000.

    “I’ve never had a business where I could get a markup like that,” Moore, now an assembly plant supervisor now living near Atlanta. “It seems almost predatory.”


    Increasingly, private oncologists are under financial pressure to sell their businesses to hospitals. When they do, hospitals often charge more.

    In a review of claims for seven cancer drugs, the newspapers found that charges for all but one drug were significantly higher at hospitals and hospital-owned clinics — usually more than 45 percent higher.

    At the newspapers’ request, Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, examined data from thousands of 2011 chemotherapy claims and found that hospital-owned facilities in the state tend to be paid 50 to 150 percent more for cancer drugs than independent oncologists.

    Dr. Ira Klein, assistant to the chief medical officer at Aetna insurance company, said he believes the acquisitions of oncology practices by hospitals have increased costs without improving the quality of care.

    “We’re essentially enriching people and getting nothing for it,” he said.


    Hospital officials defend their pricing.

    Unlike many independent clinics, they say, hospitals suffer losses from treating patients without insurance and patients covered by Medicaid, the government program for the poor and disabled. Some independent oncologists acknowledge that they often refer such patients to hospitals.

    Hospital officials say they provide counseling and many other cancer services that insurers don’t cover.

    Officials for Carolinas HealthCare and Novant Health emphasize that they provide free care to many financially needy cancer patients.

    • Associated Press