Cancer Costs Double in Less Than 20 Years

May 10, 2010— -- Over a period of nearly two decades, the medical costs of cancer care almost doubled in constant dollars, but remained proportional to other medical costs, researchers said.

Over the same time -- from 1987 to 2005 -- cancer costs shifted away from inpatient care, according to Florence Tangka of the U.S. Centers for Disease Control and Prevention and colleagues.

Meanwhile, the share of cancer costs picked up by private insurers and Medicaid increased while private, out-of-pocket expenditures declined slightly, they reported online in the journal Cancer.

Much of the increase in cancer care costs has been driven by a growing caseload -- fueled in turn by an aging population, rather than a rise in per-case costs -- Tangka and colleagues said.

However, the cost of cancer care is a complex calculation, they noted, involving changes in population, incidence rates, prevalence rates, effectiveness of care, and mortality rates.

Indeed, the key question is whether any cost changes result in better health, according to health economist Thomas E. Getzen, PhD, of Temple University in Philadelphia, who was not involved in the study.

"What we should be most concerned about is whether we are getting better at treating cancer -- if your dollars spent are making Americans healthier," Getzen said in an email.

In the current study, Getzen said, the increase "appears to be essentially in line with [proportional to] other increases in medical costs."

The report is "neither good, nor bad, nor especially surprising," he concluded.

Other experts said the report did not go far enough in terms of providing useful information to those who hope to control costs of treatment.

"You would want to know whether specific kinds of cancers, now treated outside the hospital, are using less real resources," said Ted Marmor, professor of Public Policy and Management at the Yale School of Management. "This study cannot get you there."

The researchers used nationally representative data from the 1987 National Medical Expenditure Survey and the Medical Expenditure Panel Survey conducted from 2001 through 2005.

Expressed in 2007 dollars, the total annual medical cost of cancer rose from $24.1 billion in 1987 to an average of $48.1 billion during the 2001-2005 period -- an increase of 98 percent.

However, they found, the share of total medical costs represented by cancer did not change markedly -- 4.8 percent in 1987 and 4.9 percent in 2001-2005.

Nonetheless, the increase in cancer spending varied across payers. Specifically, in real terms:

Medicaid costs increased by 488 percent, or $1.3 billion.

Costs to private insurers increased by 137 percent, or $13.8 billion.

Medicare costs increased by 99 percent, or $8.1 billion.

Costs paid by other public programs increased 25 percent, or $459 million.

Costs paid out of pocket, -- including co-payments, deductibles, and costs for the uninsured -- fell by 7 percent, or $288 million.

Along with other medical services, there was a trend away from inpatient care that was reflected in costs, the researchers noted. Across payers, cancer inpatient costs fell from 64.4 percent of total costs in 1987 to 27.5 percent during 2001-2005.

In real terms, total inpatient spending on cancer dropped from $15.9 billion to $13.2 billion, essentially because the probability of receiving inpatient cancer treatment decreased markedly for every payer, the researchers said.

At the same time, outpatient costs attributable to cancer increased nearly fourfold, from $7.5 billion to $30.3 billion.

Once admitted, though, patients tended to stay in hospital for about the same length of time over the study period.

The authors said their analysis is limited by the original surveys, both of which captured only a fraction of total national health expenditures (excluding, for example, residents of long-term care facilities).

Both studies also relied on self-reported data, the authors cautioned, and patients with advanced disease might not have taken part, which could lead to an underestimation of costs.