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May 9, 2019
David Burda
Consumerism Economics System Dynamics

The Deep State of Physician Prescribing Patterns

And you thought changing patients’ health behaviors was going to be hard. Try changing physicians’ drug prescribing patterns.

That’s the lesson from a new study in Health Affairs that reported the results of one health insurer’s attempt to get oncologists to switch to lower-cost generic cancer drugs for their patients.

Researchers from the universities of Pennsylvania and Minnesota studied the outcomes of a program that UnitedHealthcare (the Edina, Minn.-based commercial health insurance giant) launched in 2007. United designed the program .to incentivize the oncology practices that it contracts with to prescribe more generic chemotherapy drugs in place of their equivalent brand-name chemotherapy drugs.

Though not explicitly stated by the researchers in the study, you’d have to be pretty naïve not to realize UnitedHealthcare’s motivation. The insurer wanted to reduce the amount of money it paid out in claims to doctors who treat UnitedHealthcare enrollees with cancer.

Here’s how the program worked. UnitedHealthcare incented oncology practices to switch to generics by paying them more to use the generics. The “incentivized fee schedule” had the intended effect of raising the practices’ profit margins on the generic drugs to at or just under the profit margins that the practices enjoyed on their brand-name equivalents.

The researchers looked at several outcomes over the first 10 years of the program through 2016. They wanted to know whether the practices switched to more generics, whether spending on patients’ drugs went up or down; and whether total spending on patient’s cancer care went up or down. The study pool consisted of 1,905 oncology practices, 12,689 adult patients diagnosed with breast, colon or lung cancer, and 12 generic cancer drugs.

Here’s what happened over the 10-year study period.

  • Only 36 percent of the practices switched to the incentivized fee schedule for using generic drugs while 64 percent continued to use their brand-name equivalents.
  • The average drug spending per episode of care was $11,069 for patients in practices that switched compared with $10,191 in practices that didn’t switch, or 8.6 percent higher.
  • The average total spending per episode of care was $21,418 for patients in practices that switched compared with $22,499 in practices that didn’t switch, or 4.8 percent lower.

“We found that the incentivized fee schedule had no significant or meaningful effect on physicians’ use of incentivized anticancer drugs or spending on health care services,” the researchers said.

The researchers found that the practices that switched to the incentivized fee schedule were: more likely to be physician-office based rather than hospital based; more likely to treat more patients; and more likely to have prescribed generics in the past.

They suggested a few possible reasons that the program “failed to have a significant effect on providers’ behavior.” First, the program was voluntary, not mandatory. Second, the higher margins on the generics weren’t high enough to make it worth changing prescribing practices. And third, oncology practices see patients with multiple insurance carriers, making it too complicated to have different drug regimens for patients with the same cancer diagnoses but with different prescription drug benefits.

I’d offer a fourth reason: trust, or lack of it.

If a commercial health insurance company wanted to pay me more to prescribe another drug, my first question would be “what’s in it for you?” Then, after finding out how much the insurer would save by me making a change, and maybe this is just because I’m from Chicago, I’d ask for a bigger cut of the pie.

Getting people—regardless of whether they’re doctors or patients or hospital administrators or health plan executives or drug company moguls—to do the right thing to improve outcomes and lower costs is going to be a lot harder than you think. The behaviors that got us into this mess are so well entrenched that it’s going to take a revolution to get us out of it.


David Burda is a columnist for 4sight Health and news editor of 4sight Friday, our weekly newsletter. Follow Burda on Twitter @DavidRBurda and on LinkedIn. Read his bio here.

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

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