Cancer Care Accounts for 5% of Direct US Health Expenditures

July 1, 1995
Oncology NEWS International, Oncology NEWS International Vol 4 No 7, Volume 4, Issue 7

LONG BEACH, Calif--Neoplasms account for more than 5% of the $675 billion in direct annual US health-care expenditures, Thomas C. Tucker, MPH, said at the 1995 Quality of Life Symposium, sponsored by St. Mary Medical Hospital. This figure, derived from a 1990 National Center for Health Statistics Survey, does not include indirect costs, such as loss of wages, associated with morbidity and mortality.

LONG BEACH, Calif--Neoplasms account for more than 5% of the $675billion in direct annual US health-care expenditures, Thomas C.Tucker, MPH, said at the 1995 Quality of Life Symposium, sponsoredby St. Mary Medical Hospital. This figure, derived from a 1990National Center for Health Statistics Survey, does not includeindirect costs, such as loss of wages, associated with morbidityand mortality.

When the less malignant neoplasms (basal and squamous cell skincancers and in situ carcinoma of the cervix) are excluded, thecost burden for cancer is about 4% of the direct expenditures.

Cancer accounts for an even larger proportion of US health-careexpenditures when both direct and indirect costs are combined."It is not a small proportion of the burden," said Mr.Tucker, associate professor of health services management andassociate director for Cancer Control, University of KentuckyMarkey Cancer Center, Lexington.

The cancer care costs break down to about 65% for hospital care,24% for physician services, and 4% for nursing home care, withdrugs and other services making up the remaining 6% or 7%. Henoted that the 65% for hospital care is much higher than the 40%hospital expenditure for all diseases. Nursing home costs anddrug expenditures for cancer patients are also higher, but thephysician expenditures are similar to those for the total of alldiseases.

Mr. Tucker described a 1989 study based on Medicare's ContinuousMedical History sample file (about 5% of all Medicare cases),which includes all the expenditures related to care of patientsin the file who ultimately died of their disease. This study sortedout direct expenditures into three parts: the first 3 months ofcare, the monthly cost of continuing care, and the terminal phaseof care, ie, the last 6 months of life.

Initial costs for patients with the same cancer varied considerably,he said, depending on the stage at diagnosis and initial treatment.Surgery, for example, has a major impact. Continuing cost alsovaried, since it was determined by multiplying the monthly expenseby the number of months the patient lived. The cost of the last6 months of care did not vary much for patients with the samedisease.

Using the Medicare data, the US expenditure on the treatment ofbreast cancer in 1990 was estimated at $6.5 billion, followedby colon cancer, lung cancer, prostate cancer, and bladder cancer.More than two thirds of the cost are accounted for by these fivetumors, Mr. Tucker said, and, in fact, well over half are accountedfor by only the first four tumors.

He noted a paradox in the data: breast cancer has a higher treatmentcost than lung cancer, because breast cancer patients live longer,increasing the cost of the continuing care segment.

New cost studies are using prospective data from registries tomake cost estimates rather than looking at Medicare costs retrospectively,he said. An article that describes a system of tracking the costof care longitudinally using individual records in the NCI's SurveillanceEpidemiology, and End Results (SEER) data file will be publishedin the journal Medical Care later this summer.

"We want to be able to see what we spend for prevention,detection, diagnosis, treatment, continuing care, and terminalcare for individual patients and to see how groups of patientsvary by outcome, including survival and quality of life measures,"he said.

A Fable for the Managed Care Era

Thomas Tucker, MPH, of the University of Kentucky, treated theaudience at the Quality of Life Symposium to an updated fairytale that may carry at least a germ of truth:

Once upon a time a beautiful princess was walking down a pathin the woods. She heard a tiny voice saying, "Help me, helpme!" She looked down and saw a little frog, which she pickedup and held in her hand.

"Help me," said the frog. "I'm really a surgeon,and if you kiss me, I'll turn back into a surgeon." The princessput the frog into her pocket and continued down the path.

The frog was confused. "Why won't you help me? I really ama surgeon." The irritated princess admonished the frog asshe returned him to her pocket: "Don't you understand? Undermanaged care, you're worth far more to me as a talking frog thanas a surgeon."

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