NEWS: Bloomberg Business Week: Prostate Patients Suffer as Money Overwhelms Best Therapy

Prostate Patients Suffer as Money Overwhelms Best Therapy

His urologist, Amir Saffarian, didn’t mention alternatives, Calderon said. So he made 47 trips to the clinic, 28 miles from his home, where medical technicians fired radiation beams at his prostate. Calderon said he never saw Saffarian there -- even though the urologist billed Medicare and Medicaid $30,000 for the treatment, his records show.

“The way they do their business, there’s something fishy going on,” Calderon said in an interview before his death in August at age 79, after the cancer metastasized.

Investigators with the U.S. Department of Health and Human Services are examining Calderon’s case history, and others, to see whether the Salinas clinic and doctors who send patients there are violating laws against making referrals chiefly for financial gain, according to people familiar with the matter.

Saffarian didn’t respond to questions about his dealings with Calderon. Aytac Apaydin and Stephen Worsham, listed in state records as owners of Salinas Valley Urology Associates and its radiation clinic, also didn’t respond to questions.

The Calderon case has drawn attention to incentives that are altering medical decisions, driving up costs and channeling men into a treatment that delivers negligible benefits when compared to less-expensive care, according to three studies in the past two years and seven doctors who’ve studied prostate treatment.

Bigger Doses

The financial incentives have raised concerns in Maryland, the South Carolina shore, California and Washington, where the Medicare program on Nov. 1 cut reimbursement rates for radiation treatment to fight burgeoning costs.

Like Saffarian, one in five U.S. urologists add to their income by billing for the type of treatment in question, according to the journal Urology Times. Called intensity- modulated radiation therapy, or IMRT, it uses imaging software to focus multi-angled X-rays on tumors, aiming to deliver bigger doses with fewer side effects than prior technologies.

This side business pays doctors up to $40,000 per patient from Medicare, or 645 times what a urologist gets for a standard office visit, and as much as 20 times what the federal insurance program pays a surgeon to remove a cancerous prostate gland, according to published studies. Reimbursement from private insurers for IMRT can be even higher, urologists say.

‘Overused, Period’

The spread of IMRT is helping push up the cost of caring for prostate patients faster than any other cancer group. The National Cancer Institute forecasts 38 percent after-inflation growth by 2020 from the $11.9 billion spent on the disease in 2010. Before it cut IMRT reimbursement rates, Medicare cited concerns that financial incentives were influencing doctors’ treatment choices.

“IMRT is overused, period,” said urologist Matthew Cooperberg of the University of California, San Francisco, who has authored at least 18 studies on prostate treatment.

Cooperberg estimates that about half the 50,000 men who receive IMRT for prostate cancer each year don’t need it or don’t gain anything from it that exceeds cheaper treatment, resulting in about $1 billion of overspending.

“Doctors do what they’re paid to do” Cooperberg said. “If you tell them they can earn $2,000 for surgery or $37,000 for IMRT, what do you think will happen?”

Thorny Decision

IMRT’s backers say it’s spreading because it works better, with fewer side effects than previous technologies. Research on whether it’s better or safer than alternatives such as surgery or radioactive implants is mixed, partly depending on the age of the patients and the severity of the disease.

For certain younger patients with aggressive disease, the National Comprehensive Cancer Network guidelines written by the 21 research centers say it’s an appropriate choice.

“IMRT is safer and more effective than the technology it replaced,” said Deepak Kapoor, a urologist in Melville, New York. Kapoor is president of the Large Urology Group Practice Association, a trade group that includes doctors who have invested in IMRT machines and bill for their use.

Taking a stake in the $2 million machines and profiting from their use is a thorny decision for doctors. Federal and state statutes -- collectively known as the self-referral and anti-kickback laws -- bar doctors from referring patients to businesses in which they have a financial interest, or to receive money for referrals.

Broad Exemptions

The laws are meant to stop doctors from ordering up needless services purely for profit and theoretically make it illegal to send a patient to an IMRT clinic they own. But over the years, a broad set of exemptions has evolved. One permits doctors to provide “ancillary services” to patients in their own offices. Doctors also can extend the “ancillary” exemption to medical facilities in which they invest, even when the services aren’t given in their primary offices. One of the architects of the laws says evading them has become too easy.

“The complexity of the law and regulations has provided ways for creative entrepreneurs and their lawyers to clearly defy our intent of halting profiteering at the expense of patient care and taxpayer dollars,” said Representative Pete Stark, the California Democrat who wrote the 1989 law meant to end physician self-referral.

In urology, doctors’ financial gain has a history of influencing prostate cancer treatment, according to studies and successful federal prosecutions. The disease --malignancy in the gland below the bladder that helps make semen -- is the most common U.S. cancer with 242,000 new cases annually.

Urologists Convicted

Favorable Medicare payouts for hormone drugs like Lupron and Zoladex induced “remarkable changes” in prostate cancer treatment in the 1990’s, as urologists “almost completely replaced” surgical castration with drug therapy, according to a 2010 study in the New England Journal of Medicine led by Vahakn Shahinian of the University of Michigan Medical School.

Urologists could make $5,000 per patient dispensing Lupron in their offices, thanks to secret discounts and kickbacks from drug makers, according to the U.S. Justice Department. In 1997 the 25 top-prescribing Lupron urologists each averaged $1.6 million in Medicare payments, prosecutors said.

Some urologists were convicted of crimes, and the companies selling Lupron and Zoladex, TAP Pharmaceutical Products Inc. and AstraZeneca LP, respectively, pleaded guilty to government charges and agreed to pay more than $1 billion in settlements.

‘Biggest Scandal’

Two of every five patients who received hormone therapy didn’t need it, the Shahinian study found. In 2005, after Medicare cut Lupron and Zoladex payment rates by over half, inappropriate use plummeted 44 percent, the study reported.

“Hundreds of thousands of men were chemically castrated for no reason; that’s the biggest scandal of all,” said Anthony Zietman of Harvard Medical School, who directs the radiation- oncology program for residents at Massachusetts General Hospital. “The money was too irresistible.”

After hormones became less lucrative, the pattern shifted, said Patrick Walsh, former director of the Brady Urological Institute at Johns Hopkins University.

“All of a sudden there was a blanket menu of things that were done that aren’t necessary,” Walsh said. “Every patient gets a urine culture, an abdominal ultrasound. There’s general overuse of equipment that the large urology groups own, such as CT scans and IMRT -- anything to maximize income.”

Practice Patterns

When urologists have a financial stake in IMRT, the portion of patients referred for it roughly triples within about two years, according to preliminary data presented at a radiation oncology conference in Miami Beach last year by Jean Mitchell, a health-care economist at Georgetown University.

One practice, Chesapeake Urology Associates in Baltimore, referred about 12 percent of its new prostate cancer patients for IMRT before it bought its own machine in 2007, Mitchell said, based on an analysis of Medicare data. After that, IMRT referrals jumped to 43 percent, she told a Maryland Senate hearing in February.

“Urologists changed their practice patterns in response to the ability to bill for IMRT,” she testified.

Chesapeake’s records show only 29 percent of its Medicare patients received IMRT after the urologists started billing for it, said Howard Rubin, a lawyer for the practice. He said Mitchell didn’t have access to “the best possible evidence” -- patient records.

Radioactive Implants

In Horry County, South Carolina, IMRT referrals nearly doubled after the Myrtle Beach area’s main urology practice merged with the region’s largest IMRT clinic, according to state data. Both were acquired in 2010 by Radiation Therapy Services Inc. of Ft. Myers, Florida, which operates 91 clinics in 16 states and is owned by Vestar Capital Partners, of New York.

In 2009, 19 percent of the county’s prostate cancer patients had their glands surgically removed; 16 percent had brachytherapy -- radioactive seeds implanted in the prostate -- and 32 percent received IMRT. In 2011, after Atlantic Urology Clinics was combined with Carolina Regional Cancer Center, IMRT use jumped to 61 percent, surgery fell to 5 percent and seed implants plummeted to 2 percent in the county. More than a third of Carolina Regional’s IMRT patients came from Atlantic.

The urologists had asked the radiation center to merge five years earlier, “but we didn’t see any legal, legitimate way to make anything like that work within the anti-kickback and self- referral laws,” said Paul Greg Goetowski, a former partner in Carolina Regional. He said he left after the merger because of legal and ethical concerns.

IMRT Surge

Atlantic Urology doctors aren’t paid “directly or indirectly” based on patient volume, revenue or profit at the radiation center, said William Cunningham, a Radiation Therapy spokesman. Horry County’s rising IMRT use reflects long-term trends, he said. He declined to comment on why Goetowski left.

Georgetown’s Mitchell has also looked at Salinas Valley Urology Associates, the California practice owned by Apaydin and Worsham that provided radiation to Max Calderon. Her preliminary findings showed a surge in the percentage of its prostate patients getting the treatment in the two years after Salinas Valley started billing for IMRT, according to two people who have reviewed the data.

Mitchell declined to comment and said she’s refining the data for submission to a medical journal.

Ferrari 430

Apaydin, 51, a Seattle native, completed his medical training in Los Angeles in 1994 and soon formed Salinas Valley Urology. In 1999, he started Stonecrushers LLC, a business for blasting kidney stones with sonic waves. He added an imaging center two years later, a surgery center in 2004, and Advanced Radiation in 2007, according to state records.

Apaydin makes more than $1 million a year, he told a state court in Monterey, California, where he is fighting his wife in a divorce proceeding. He owns a 5,700 square-foot home on three acres in the Monterey hills with sweeping views of the Pacific, valued at $1.7 million for tax purposes; a home assessed at $700,000 in the Indian Ridge Country Club in Palm Desert, California; a Ferrari 430, a Porsche 911, a Range Rover and a Land Rover, according to court filings in the divorce. His wife Jana has said in court that the couple have a joint $1.2 million retirement account.

The opening of Salinas Valley’s radiation center roiled the tight-knit medical world in Monterey County. As Apaydin convinced more urologists to send patients to his IMRT facility, use of other treatments fell dramatically, according to Kevin Fisher, a cancer-radiation specialist who practiced in Salinas before moving to Erie, Pennsylvania, earlier this year.

‘Radical Change’

Fisher said his practice’s brachytherapies fell from 40 to fewer than 10 per year after Salinas Valley Urology acquired its IMRT machine in 2007. Twenty miles west in Monterey, where two of the city’s four urologists make IMRT referrals to Salinas Valley Urology, brachytherapies fell from 15 in 2006 to six in 2011 at the Community Hospital of the Monterey Peninsula, said Grant Swanson, medical director of the cancer center there.

There were no surgical prostate removals at Salinas Valley Memorial Hospital, across the street from Apaydin’s IMRT center, in 2011. In 2006, there were 16. At the Monterey hospital, the surgeries dropped from 21 to four in the same period.

“To see such a radical change in practice patterns in such a short period of time is alarming,” said Cooperberg of UCSF.

‘Gold Mine’

Apaydin approached Fisher and his former practice partner Esmond Chan while the IMRT clinic was on the drawing board, asking whether they would be interested in operating it, the two radiation specialists said.

Both said they declined to participate. Chan said the arrangements Apaydin described would compromise his and referring doctors’ judgment by creating a financial incentive for them to treat patients with IMRT.

“I thought what he was doing was totally wrong,” Chan said of Apaydin. “The conflict of interest would not let us be unbiased when talking to patients about their options.”

Apaydin found another radiation oncologist to run the clinic. He pitched urologists and cancer specialists in Monterey and adjoining counties with a similar proposition, according to these physicians: Send me lease payments for the new clinic and you can make money billing for patients you send there.

“Apaydin called and said radiation oncologists are sitting on a gold mine, and we should be sharing in it,” said Laura Stampleman, a Salinas oncologist. Stampleman said she and her practice rejected the idea of paying Apaydin for participating in his new venture.

“If I’m not providing the service,” she said, “why should I make the money?”

Peer Review

One doctor who joined Apaydin was Monterey urologist David Flemming, according to people familiar with the matter. Every month, Flemming makes a $20,000 to $25,000 lease payment entitling him to office space at Salinas Valley Urology, according to two people privy to the transactions.

Near the entrance to the practice’s building housing the Advanced Radiation facility is a sign listing the names of Apaydin, Worsham, Flemming, Saffarian, Monterey urologist J. Anthony Shaheen and seven other doctors who practice in Monterey and Santa Cruz counties.

Flemming and Shaheen were named by other area doctors in a memo that became part of a 2010 peer review at the Monterey community hospital, according to people familiar with the matter. The memo included profiles of 12 patients the doctors said they had seen after they were referred to IMRT at Salinas Valley Urology by Flemming, Shaheen and others.

Bone Scan

The complaining doctors alleged that several patients had low-risk cancer that didn’t need treatment at all, and others were too old and too sick for the lengthy IMRT protocol, or were young and healthy enough for surgery, yet weren’t offered the option, according to those familiar with the proceeding.

After a biopsy revealed prostate cancer in one 77-year-old patient, the memo said Flemming sent him to Salinas Valley Urology for IMRT in 2009. Anonymous in the memo, he is Richard Armbrust, a retired executive recruiter in Carmel, according to a person familiar with his case. Armbrust confirmed that the memo’s account matched his case and dealings with Flemming.

Before having radiation, Armbrust had complained of pain in his lower back and right leg, and after a bone scan, a radiologist recommended more X-rays to check if the cancer had spread. No other imaging tests were done, the memo said.

After Armbrust had 43 IMRT treatments at Salinas Valley, he said his back and leg pain worsened, and scans at the Monterey hospital revealed a tumor in his lower spine.

Gleason Score

He was hospitalized for emergency radiation to shrink the tumor. Flemming was paid more than $34,000 for Armbrust’s IMRT, according to medical bills.

“Flemming told me he was setting up an office in Salinas, so that’s where I went,” Armbrust said. “I thought it was part of the hospital.”

The Monterey hospital determined the matter was outside its purview, and the complaining doctors were encouraged to take their concerns to state and federal authorities -- which they did, said Anthony Chavis, vice president of medical affairs and patient safety at the facility. Flemming declined to answer questions for this article. None of the doctors affiliated with the Salinas clinic have been accused of wrongdoing at the radiation facility by a government authority.

Richard Dunsay, a retired lawyer in Carmel, was diagnosed last year with a mild form of prostate cancer, according to his medical records and NCCN guidelines. A pathologist who examined his cancerous cells gave them a so-called Gleason score of 6 on a 10-point scale, meaning they appeared slow-growing and unaggressive.

Considered Normal

Shaheen told him he needed IMRT and said “he knew of a very, very good facility in Salinas with the best procedures,” according to Dunsay. In second opinions, two other doctors told the 72-year-old that he didn’t need any treatment. Dunsay opted out of IMRT and said he’s doing well. Shaheen didn’t return calls or respond to faxed questions.

Apaydin told Wallace Ahtye, a retired programmer in Salinas, that he needed IMRT in 2006 after his PSA, or prostate- specific antigen, level went from 1.8 to 2.8 nanograms per milliliter, according to his medical records. PSA levels below four have long been considered normal by the National Cancer Institute. A biopsy found a small amount of cancer in his prostate with a Gleason score of 6.

Apaydin recommended IMRT at the “state-of-the-art” facility he was building at the time, said Ahtye, who was then 77. Apaydin gave Ahtye Lupron shots to keep his cancer at bay until the clinic was ready, according to Ahtye’s records.

Extensive Malignancies

After nine months on the hormone drugs, which caused hot flashes, new doctors told Ahtye his cancer was negligible and didn’t need any treatment. Five years later, Ahtye said his PSA is now 2.6 and his prostate is fine, but his sexual function has never recovered.

“Apaydin just treated me for profit -- he didn’t look after my interest at all,” Ahtye said.

Max Calderon wondered if another treatment might have prolonged his life, he said in the interview shortly before his death. The retired construction worker said Saffarian didn’t explain why he was billing for IMRT at the Salinas Valley facility, 40 miles from Saffarian’s office in Morgan Hill.

“They just sent me to radiation and that was it,” Calderon said.

For eight weeks, a limousine sent by the clinic fetched Calderon at home and drove him two hours, round-trip, for daily treatments, he said. He saw the clinic’s radiation oncologist just twice, he said.

At one point, while a technician was operating the IMRT machine, it malfunctioned and burned Calderon’s back, causing severe discomfort for months, he said. Finally, when a new cancer doctor he saw ordered CT and MRI scans in October 2011 -- six months after Calderon had finished IMRT -- the images showed extensive malignancies in his abdomen and up into his spine.

“The radiation was a waste of time,” Calderon said as he lay in his bed propped up by pillows, while his grandchildren darted in and out of his bedroom. “I would have been better off if I hadn’t had it.”

To contact the reporter responsible for this story: Peter Waldman in San Francisco at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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