An analysis of trends in cancer care expenditures from 1998 to 2012 performed by my colleagues and me at Altarum was recently published in Cancer.[1] The study concluded, that the previous rapid growth of cancer prevalence and expenditures had slowed, most remarkably since the 2007 recession. Out-of-pocket expenses for cancer treatment continue to decline, reaching the lowest point in 25 years in 2012. We were admittedly somewhat surprised by the extent of the slowdown and lower out-of-pocket share of expenditures.

The table below summarizes these data and the methods of fully described in the article.

chart 1

A recent Health Affairs Datawatch by Charles Roehrig, one of the co-authors of the Cancer paper, provided 2013 data showing cancer care expenditures of $129 billion, pointing to a flattening in cancer care expenditures over the past few years.[2]  Note these expenditures reflect care for the entire U.S. population including non-institutionalized, institutionalized and active duty military personnel and are not adjusted for inflation.

While we are awaiting data for 2014 and 2015, we examined the recently released Medical Expenditure Panel Survey data for the civilian, non-institutionalized population, which makes up 90% of cancer care expenditures. Of note, cancer expenditures declined between 2011 and 2012 and again in 2013 while the share of out-of-pocket expenditures has remained relatively low. A component of this is a decline in treated prevalence in each year, while the cost per person treated also declined between 2012 and 2013 by 2.1%. An examination of the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Data supports this data for inpatient care, as inpatient hospitalization for cancer care declined by 4.4% between 2011 and 2012 and again by 4.4% between 2012 and 2013.

Chart 2

It is difficult to project what will occur in 2014 and 2015 as data on medical expenditures by medical condition are not yet readily available. A recent Milliman analysis presented relatively flat treated prevalence and cost per person in the Medicare fee-for-service and commercially insured populations between 2013 and 2014, but this does not include Medicaid and uninsured populations, which represent about 1.5 million people who received cancer treatment in 2013.[3]

My best forecast for cancer care expenditures, shown below, is flat to a continued decline for the next couple of years. Treated prevalence appears to continue to remain flat or decline in the near term.  Furthermore, as patients continue to move from commercial insurance to Medicare as the population ages, and uninsured to Medicaid as Medicaid enrollment expands, payments per case may decline since Medicare and Medicaid generally provide lower payments for a given case than commercial payers and the uninsured, respectively. The aforementioned Milliman paper shows an actively treated colon cancer patient has allowed costs of less than $70,000 per patient while commercial average allowed costs were nearly $140,000 per patient in 2014.

Chart 3

[1]Lee JA, Roehrig CS, Butto ED. Cancer. 2016 Apr 1:122 (7):1078-84. doi: 10.1002/cncr.29883. Epub 2016 Jan 15. Cancer care cost trends in the United States: 1998 to 2012.

[2] Roehrig C. Health Aff (Millwood). 2016 May 18. pii: 10.1377/hlthaff.2015.1659. [Epub ahead of print] Mental Disorders Top The List Of The Most Costly Conditions In The United States: $201 Billion.

[3] Fitch K, Pelizzari P, Pyenson B. Cost Drivers of Cancer Care:  A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data 2004-2014. Milliman. April 2016. , last accessed June 2, 2016.


Project Leader

Jim Lee

Jim Lee

Vice President and Director, Systems Research & Initiatives Group

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