Cancer Costs Grow, But Stay in Line with Other Medical Expense

Over the past twenty years, the cost of caring for cancer patients doubled, but still remained about 5 percent of all medical expense in the United States.

An increase in the number of people with cancer — fueled by an aging population — drove the growing expense rather than a greater cost per individual.

Expressed in 2007 dollars, out-of-pocket costs for patients and their families fell, while the costs paid by private insurance and Medicaid rose.  Average Medicaid expense in from 2001 though 2005 was almost five times as high as 1987, while Medicare costs doubled.

Analysts compared information from data from the 1987 National Medical Expenditure Survey and the Medical Expenditure Panel Survey conducted from 2001 through 2005, translating costs to 2007 dollars.

Costs for cancer treatment in 1987 were $24.1 billion.   Two decades later average annual costs had risen to $48.1 billion.

However, the percentage of total medical expense due to cancer care remained stable — 4.8 percent of total costs in 1987 and 4.9 percent in the 2001-2005 period.

In 1987 two out of three cancer treatment dollars went to inpatient care (64.4 percent), but by 2005 only one in four dollars (24.5 percent) covered inpatient treatment.  However, once patients were admitted to a hospital, they stayed about the same length of time.

There were also changes in who financed care, with patients paying less themselves and private insurance paying a bigger share of the total.

  • In 1987, private payers financed the largest share of the total (42%), followed by
  • Medicare (33%)
  • Patients out of pocket (17%)
  • Other public (7%)
  • Medicaid (1%)

In 2001 to 2005, the shares of cancer costs were:

  • Private insurance (50%)
  • Medicare (34%)
  • Out of pocket (8%)
  • Other public funds (5%)
  • Medicaid (3%)

Writing in an early online edition of Cancer, Florence K. Tangka, PhD and her colleagues concluded,

The authors identified 3 trends in the total costs of cancer: 1) the medical costs of cancer have nearly doubled; 2) cancer costs have shifted away from the inpatient setting; and 3) the share of these costs paid for by private insurance and Medicaid have increased.

SOURCETangka et al., Cancer, Early View, May 10, 2010.

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