Costly Care
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By Hannah Hoag

Costly Care

Medicare payments are rising for many cancer patients’ care

By Hannah Hoag


In 2002, Medicare payments for breast, lung, colorectal and prostate cancers topped $6.7 billion, a figure that is only expected to grow as the baby boomer generation ages. Not only are more people using Medicare, the federal health insurance program for those 65 and older, but the cost of initial cancer care for America’s elderly is also on the rise.

According to a study published in the June 18 issue of the Journal of the National Cancer Institute, the cost of the first 14 months of cancer treatment for breast, lung and colorectal cancers climbed between 1991 and 2002. Conversely, the cost for prostate cancer therapy declined.

National Cancer Institute epidemiologist Joan Warren and her colleagues analyzed data—including the average annual Medicare payments—for more than 306,000 people ages 65 and over who were receiving initial cancer care. The analysis included the period beginning two months before a patient’s diagnosis and ending 12 months after diagnosis.

Warren chose to study these 14 months because cancer costs are high around the time of diagnosis and during initial treatment and then decline. For patients diagnosed in 2002, Medicare paid an average of approximately $39,900 for initial care for each lung cancer patient, $41,100 for each colorectal cancer patient, and $21,000 for each breast cancer patient—increases of $7,100, $5,300 and $4,200, respectively, since 1991. The cost of care for prostate cancer was about $18,300 in 2002, a decline of $200 since 1991.

The problem goes beyond rising costs per patient and a growing older population: A larger proportion of elderly Americans were treated with chemotherapy for breast, lung and colorectal cancers in 2002 than in 1991. For example, the proportion of 65-and-over patients receiving chemotherapy rose from 24 percent to 35 percent for lung cancer and from 11 percent to 24 percent for breast cancer.

“As the U.S. population ages, Medicare is really faced with some significant challenges of how it is going to pay for cancer treatment,” says Warren. Medicare expenditures are projected to increase from 3.2 percent of the U.S. gross domestic product (GDP) in 2007 to 10.8 percent by 2082.

And the study likely underestimates Medicare’s costs for modern cancer medicines, says Warren. Newer, more expensive treatments, such as Avastin (bevacizumab) and Erbitux (cetuximab), have been approved since 2002, and are increasingly being used to treat cancer in the elderly. “Newer targeted therapies have come on line. That is going to have an increasing impact on the Medicare budget,” says Len Lichtenfeld, the deputy chief medical officer at the American Cancer Society.

Although the study didn’t look at the costs to patients, in all likelihood, these individuals are also feeling the pinch. Medicare recipients often face deductibles, co-payments and coverage maximums. As the cost of cancer care grows, so does the patient’s share. Although some programs have out-of-pocket caps, many people responsible for 20 percent of a $100,000 chemotherapy bill might well expect to pay $20,000. “The disturbing trend is that the cost-sharing portion is also increasing,” says David Knowlton, a board member of the HealthWell Foundation, a nonprofit organization that provides financial assistance to uninsured and underinsured Americans, and who is New Jersey’s former deputy commissioner of health. And as many cancers are transformed from acute conditions to chronic diseases that require years of treatment, “the expense can become astronomical,” says Jennifer Hinkel, an adjunct professor in health policy and administration and health economics at the Pennsylvania State University in Abington and Arcadia University, in Glenside, Pa. Patients with private health coverage may find they reach their lifetime maximums quickly, she says.

Knowlton recommends that patients arrive at their doctor’s appointments armed with four questions: What’s wrong? What should I do about it? Why is it important that I do this? What happens if I don’t do it? “Does the increased cost justify the gains from using these drugs?” he asks.