Facts About Cancer Costs: Orphaned and Ignored

  • by: Robert Goldberg |
  • 04/05/2016

Let’s compare the claims that cancer costs – and drug costs in particular – are unsustainable with the facts:

“One of the fastest growing components of US health care costs is cancer care, the cost of which is now estimated to increase from $125 billion in 2010 to $158 billion in 2020.1 Although cancer care represents a small fraction of overall health care costs, its contribution to health care cost escalation is increasing faster than those of most other areas.”
                        American Society of Clinical Oncology Statement: A Conceptual Framework to Assess the Value of Cancer Treatment Options

“The combination of increasingly unsustainable rises in the costs of cancer care, the accelerating pace of expensive innovations in oncology, and persistent hope for rescue in patients with life-threatening disease require solutions that incorporate and promote value.”

National Comprehensive Cancer Network® (NCCN®) Policy Summit: Value, Access, and Cost of Cancer Care

And now for the facts: 

“The increase in people living with cancer and the introduction of new therapies are associated with a rise in cancer care costs. Cancer care costs in the U.S. were estimated to be $124.57 billion in 2010, and are projected to increase to $158 to $173 billion by 2020.

The objective of this analysis was to identify trends in the overall and component costs of cancer care from 2004 to 2014 and to create comparisons to cost trends in the non-cancer population. 

We identified the following key dynamics: 

1. The percent increase in per-patient cost from 2004 to 2014 for actively treated Medicare fee-for-service (FFS) and commercially insured cancer patients has been similar to the corresponding increase for the respective non-cancer populations. 

2. 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. 

3. The site of service for chemotherapy infusion has dramatically shifted from lower-cost physician office to higher-cost hospital outpatient settings. 

We have important observations on trends in prevalence, cost, and site of service, summarized below:

 _Over the entire 2004 to 2014 study period, the average annual increase in cost was essentially the same in the actively treated cancer population and the non-cancer population. 

 _Cancer prevalence increased from 2004 to 2014 more than the contribution of cancer patients’ cost to the total population spend. 

 _For patients being actively treated, the portion of spending for cancer-directed pharmaceuticals increased from 2004 to 2014 while the portion of spending for inpatient care declined. 
o In particular, the portion of spending for biologic chemotherapies increased from 3% to 9% in the Medicare population and from 2% to 7% in the commercial population. 

 _The portion of chemotherapy infusions being performed in generally more expensive hospital outpatient settings increased by at least 30%, from 2004 to 2014 with a corresponding reduction in the generally less expensive physician office settings. 

 _As explained in the body of the report, if the chemotherapy infusion site-of-service distribution in 2014 had been maintained at 2004 levels, the estimated Medicare FFS cost per infused chemotherapy patient in 2014 would have been approximately: 
o $51,900 per actively treated Medicare FFS patient instead of the observed $56,100 (7.5% lower) 
o $89,900 per commercial patient instead of the $95,400 observed (5.8% lower) 

 Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data 2004-2014 ,  Community Cancer Alliance 

The ASCO and NCCN value frameworks are based on false assumptions and generated tremendous press and discussion.   

My guess is that the Community Cancer Alliance study will be, like many stubborn facts that grate against the anti-pharma narrative, undervalued and ignored.  Why let truth get in the way of what we want to believe?

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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