Chemotherapy: A financial gain for oncologists

Concession Stand

Imagine sitting down with your doctor to receive the shocking news that you have bone cancer and only a couple of years to live. Even worse, he tells you that your life expectancy will be considerably shorter unless you immediately begin an intensive round of chemotherapy.

Then imagine saying, “No thanks; no chemo for me,” and going on to live for well over a decade.

Against the odds, that’s what happened to Michael Gearin-Tosh, a don of English literature at Oxford University. In the e-Alert “Land of the Living” (3/11/03) I told you about Mr. Gearin-Tosh’s remarkable book, “Living Proof: A Medical Mutiny,” in which he describes the rigorous nutritional regimen he used to control his cancer.

“Living Proof” is not an attack on chemotherapy use, but it offers a reminder that the need for chemotherapy should always be questioned because this harsh treatment is sometimes prescribed for cancers that simply don’t respond to chemo. Why? The answer to that question uncovers a disturbing business aspect of chemotherapy that few patients ever get a glimpse of.

Offsetting costs

Cancer patients often receive chemotherapy drugs in the offices of their oncologists. This procedure, now fairly standard, was established in the early 90’s to avoid the high costs of administering the drugs in a hospital. The wrinkle that makes this situation unique is that the oncologists purchase the drugs themselves and bill their patients. And the wrinkle that makes this situation a potential problem is that oncologists typically charge patients far higher amounts than they pay for the drugs. This practice is known as “chemotherapy concession.”

The oncologists say they require the additional revenue from selling the drugs to offset the cost of special facilities and staff to administer the drugs. And because chemotherapy has become such a standard treatment, virtually all prescriptions for it are covered by insurance or Medicare, so the markups are generally not paid for by patients.

At face value, this would seem to be reasonable. But I’m sure you won’t be surprised to find out there’s much more to it than that.

Everyone pays

The problem with this “concession” systemis that it perpetuates the use of chemotherapy – a problem that can be broken down into three distinct problems.

PROBLEM 1: Taxpayers are footing a large portion of the payout that goes to oncologists.

According to the New York Times, the amount that the government pays may be more than $1 billion per year. That’s $1 billion more than the actual cost of the drugs. This amount doesn’t include the additional totals paid to doctors by insurance companies – totals for which there are no current estimates, although the chance is very good that the burden carried by insurance companies is at least equal to the amount carried by Medicare. And as we’ve often seen, when insurance claims rise, our insurance premiums follow.

The Times quotes Dr. Larry Norton, an oncologist and former president of the American society of Clinical Oncology, as saying that he and other doctors are just trying to “break even.” Well, things are tough all over, but don’t pass the hat just yet to help your local oncologist squeak by, because according the Medical Group Management Association, over the last ten years oncology has become one of the most lucrative fields of medical practice, largely due to the chemotherapy concession. By some estimates, two-thirds of a typical oncologist’s total revenue comes from the concession.

Research suffers

PROBLEM 2: Because oncologists have a strong monetary incentive to prescribe chemotherapy (after all, they’re just “breaking even”), they are less likely to refer patients to clinical research exploring possible cancer cures and less abrasive therapies.

Natural Health Line recently interviewed Nicholas Gonzalez, M.D. – a clinical researcher who has treated cancer with nutrition for many years. When Dr. Gonzalez was recruiting patients for a federally funded study of a cancer treatment based on a nutrition regimen, enrollment in the trial was complicated by the fact that many oncologists were reluctant to refer patients and lose the revenue that the chemotherapy concession would bring.

Hard to justify

PROBLEM 3: The most important problem is the way chemotherapy concession affects the treatment of patients.

Two years ago, Ezekiel J. Emanuel, M.D. (an oncologist and bioethicist), presented the results of a study that examined the medical records of almost 8,000 cancer patients. Dr. Emanuel found that in cases where chemotherapy was administered in the final six months of life, ONE-THIRD of the patients suffered from cancers that are known to be unresponsive to chemotherapy!

In Dr. Emanuel’s words, “providing chemotherapy to patients with unresponsive cancers is hard to justify.”

I’d say that’s putting it mildly.

Specific types of cancer that are not responsive to chemotherapy include: pancreatic, melanoma, hepatocellular, renal cell, and gallbladder. If you are diagnosed with one of these cancers and are prescribed chemotherapy, it’s time for a second opinion.

To Your Good Health,

Jenny Thompson
Health Sciences Institute


“Chemo Versus Nutritional Therapies: Is a Conflict of Interest Compromising Fair Evaluation of Alternative Cancer Treatments?” Peter Chowka, Natural Health Line,, 3/1/03

“Oral Presentation by Ezekiel J. Emanuel, M.D.” Abstract #953, American Society of Clinical Oncology, 5/12/01

“Drug Sales Bring Huge Profits, and Scrutiny, to Cancer Doctors” Reed Abelson, The New York Times, 1/26/03