Approaches to cancer treatment have
rapidly grown complex and costly, causing heightened awareness among patients,
physicians, employers, and insurance providers. Annual costs for cancer are
about $107 billion, accounting for 20% of all health care costs.
Additionally, the number of cancer patients receiving treatment
will increase threefold over the next 30 years, leading many to speculate that
oncology may soon exceed cardiology as the most costly medical illness.
Direct medical expenditures for cancer management comprise only
one third of the total cancer costs. These direct costs include treatment
expenses, hospice services, and expenditures for rehabilitation. The remaining
two thirds of all cancer costs reflect indirect costs from both out-of-pocket
expenditures and opportunity costs for patients, families, and friends.
Although comprehensive health insurance plans define indirect
costs as a patient’s share of charges for premiums, deductibles, and
copayments, these include a mere fraction of the actual expenses that patients
bear. The burden on patients and their families of nonmedical costs for clinic
visits, management of illness, support, and occupational time lost has been
inadequately assessed and far exceeds the out-of-pocket costs addressed by
These expenditures permeate every stage of illness, and,
regardless of socioeconomic status, most families confront financial problems
associated with cancer treatment.
Health expenditures for cancer patients are creating greater
concern because they are likely to increase over time, and inadequate insurance
coverage may force individuals to pay an even greater proportion of expenses
Because of concerns over the financial toll of out-of-pocket
expenditures on cancer patients, there is increasing consumer interest in
supplemental cancer insurance. Although awareness of cancer insurance is
steadily mounting in the United States, it has long achieved popularity and
success in providing cancer benefits in the United Kingdom, Canada, and
Cancer insurance specifically focuses on the medical financial
risks produced by cancer, and extends coverage beyond medical costs, providing
supplemental compensation to families. Most cancer insurance policies
provide coverage for specific expenses such as clinic visits, transportation,
hospice care, and acquisition of prosthetic devices.
Although supplemental insurance may fill significant gaps in
coverage, it may not address all of the out-of-pocket costs associated with
cancer care, and it may not be a viable option for those with lower incomes.
To obtain a more comprehensive portrait of cancer costs, we
must evaluate the costs associated with clinic visits, purchases to manage
illness and treatment, and expenses for emotional and physical support, as well
as lost wages.
Substantial out-of-pocket expenditures are often incurred as a
result of clinic visits, depending on the distance from the patient’s home to
the clinic. Travel expenses also involve parking fees, which may be costly if
the clinic is located in an urban area.
Out-of-pocket expenditures significantly increase if the
patient is required to remain in the clinic for an extended period of time.
During these prolonged clinic visits and overnight stays, hospital meals and
other expenses account for important costs that are not covered by insurance.
In a study of 139 cancer patients, clinic visits, food
expenses, transportation, and lodging amounted to an average of more than $100
Cancer patients also incur out-of-pocket expenditures in
association with treatment. For example, many patients seek out alternative
therapies, special lotions, and nutritional supplements, which can cost more
than $500 a month.
The side effects of chemotherapy treatment also result in
payments for pain relief medications, many of which are not reimbursed by
insurers. These can range from $2 to $300, depending on the timespan and type
of prescription purchases and the severity of side effects.
Another substantial cost associated with chemotherapy is the
purchase of wigs for patients who have hair loss, which typically is in the
range of $180 per wig.
Other "hidden" costs of cancer care involve expenses
related to supporting and assisting the patient in his or her normal tasks.
More than 90% of cancer patients in one study reported needing assistance with
personal care, shopping, and/or transportation.
As patients encounter the heavy burden of managing their
illness, they frequently opt to pay for housekeeping services and additional
equipment or appliances to minimize housework. Ordering meals is another
typical method of reducing the effort spent on daily household tasks.
Telephone charges also can be substantial, especially
considering the numerous calls required to arrange appointments and support.
In addition to family and friends, patients commonly seek
support through professional counseling. Housekeeping, counseling and equipment
can be as much as $1,000 a month.
As cancer treatment increasingly occurs on an outpatient basis,
informal caregivers assume a greater responsibility for patient care at home.
The amount of time lost results in forgone earnings from the potential wages of
In one study, caregivers reported substantial burdens,
including the utilization of savings and loans to subsidize their efforts.
Additionally, in one fifth of cases of serious illness, a family member had to
quit work or make another major life change to provide patient care.
The shift in roles in patients’ families often leads to an
overall loss of household income and family savings. Loss of most or all of the
family savings was reported by one third of the surveyed families, and another
one third reported loss of the major source of income.
One of the greatest financial losses may be incurred as a
result of lost income. Many patients experience decreases in monthly wages due
to the extensive use of sick days and vacation time. Moreover, people who are
self-employed or part of a family business will have to rearrange their
Although treatment results in fatigue and weakness, creating
obstacles that interfere with employment, returning to work is crucial for
patients who are heading a household, living on a low income, and/or supporting
a family. Given and colleagues found that patients lost a 3-month average of
$1,258 in earnings and family members lost $214.
These assessments of various expenses provide a more complete
description of the total informal costs incurred by families with a member who
has cancer. Patients experience an extensive range of out-of-pocket costs that
extend far beyond the limited coverage provided by health insurance and the
associated co-payments and deductibles. Although the total costs of treatment
varies by clinical stage, Given et al estimated a 3-month average spending of
Clearly, serious medical illness is devastating not only to
patients but also to their families. Patients make treatment decisions that
significantly affect the family and challenge household stability and
viability. Corvinsky et al observed that high treatment costs forced many
families to make serious adjustments, such as moving to a less expensive
neighborhood, delaying education, and/or withholding medical care for
Improvements in cancer screening, prevention, early detection,
and management have led to escalation of the costs of cancer care. Pressures to
find better treatment regimens are often in conflict with efforts to contain
costs at every juncture. Hospitals strive to implement a more cost-effective
environment through improved patient clinical outcomes, satisfaction, and
The medical and financial costs incurred by cancer management
have fostered a growing interest in supplemental insurance by both patients and
As a growing portion of the money spent on health care benefits
by employers is being used for payment of oncology benefits, emphasis on
assessing the entire range of needs that generate expenses and the potential
effect of serious illness on employee functionality is becoming increasingly
Since one in two men and one in three women are expected to
develop cancer during their lifetime, patients will look to health care
professionals and policy makers to address the growing financial burden of
cancer in the coming years.
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