Costs of Cancer Care Defy Expectations

Although the growing number of people living with cancer and the introduction of new therapies are associated with an increase in cancer care costs, a new report from Milliman Inc, commissioned by the Community Oncology Alliance, sheds light on some more surprising factors that have contributed to the growth in costs for cancer care over the past decade.

The report, titled “Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data 2004-2014” (Milliman; April 2016), examined trends in overall costs and component costs of cancer care from 2004 to 2014 in comparison with cost trends for people without cancer. Researchers used two data sets: the Medicare 5% sample and the Truven Health Analytics MarketScan commercial claim database, which includes medical and pharmacy claims for 15 million to 50 million commercially insured lives annually, depending on the year. The costs of actively treated patients with claims for cancer surgery, radiation oncology, and chemotherapy were analyzed. Costs were defined as cost to the combination of cost payer and patient. 

Cancer care costs in the US were estimated to be $124.57 billion in 2010, and are anticipated to increase to between $158 and $173 billion by 2020, representing a 27% to 39% increase. However, results showed that the percentage increase in per-patient cost from 2004 to 2014 for actively treated Medicare fee-for-service and commercially insured cancer patients has been similar to the increase for the non-cancer populations. 

The per-patient cost of chemotherapy drugs is increasing at a much higher rate than other cost components of actively treated cancer patients, driven largely by biologics, but the chemotherapy drug increase has been offset by slower growth in other components. A substantial shift in the site of chemotherapy infusion delivery from less expensive physician office settings to more expensive hospital outpatient settings has pushed some of the past increase and will likely continue to contribute to cost increases. 

Increased consolidation among outpatient oncology providers and hospitals or health care providers has resulted in increased inflation-adjusted spending on outpatient prescription drug-based cancer treatments.

Clinical progress is another major source of increasing costs of cancer care. While therapies and therapeutic mechanisms have substantially benefited patients suffering from cancer, the costs associated have only increased.

As health care spending rises, insight into the high-end costs in cancer care can help to form strategies for meaningful change.—Nina Farrell