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Cancer Treatment Costs Aren’t Rising as Fast as You Thought

Johns Hopkins Hospital Continues Cancer Research And TreatmentJohns Hopkins Hospital Continues Cancer Research And Treatment
The world's biggest cancer conference came to a close on Tuesday.Photograph by Win McNamee via Getty Images

The costs of treating cancer haven’t been outpacing the overall rise in health care costs, it turns out.

Over the last decade, the cost to treat cancer patients has grown at roughly the same rate as all health care spending. That goes against a wide-reaching narrative that said cancer care costs have been outstripping other medical concerns, according to a new study by actuarial firm Milliman.

“There has been a long-held belief in research and policy circles that cancer care costs in America have gone up disproportionately as compared to other health care costs,” said Debra Patt, a practicing oncologist at Texas Oncology and a study team member. “What these data actually show are that per capita oncology cost increases are proportional to total healthcare spending.”

Medicare patients who were actively treating their cancer—meaning they had one or more claims for chemotherapy, radiation therapy, or cancer surgery in a given year—saw their health care costs grow 36.4% over an 11 year period. Costs for the non-cancer group grew by 34.8%. The same was true for those with commercial insurance plans. Non-cancer patients saw a 60.8% jump in health care costs, while the actively-treated cancer population’s costs rose 62.5%.

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The report, which was commissioned by the Community Oncology Alliance, analyzed claims data from Medicare and commercial insurance plans from 2004 to 2014 to see what was the biggest driver in health care spending gains.

Health care spending has grown steadily over the past decade, jumping 5.5% in 2014 alone, and is now equal to about 19.6% of the U.S. economy, according to the Centers for Medicare and Medicaid Services. By 2024, health care is expected to be worth about a fifth of the U.S. economy as spending continues to grow. Therefore, understanding where the money is being spent is an important factor.

When the researchers dug into the key drivers of cost for cancer treatment, two factors stood out: drug spending and care setting.

Drug spending accounted for one-fifth of the total costs in actively-treated cancer patients in 2014 and has seen the highest growth over the study period. A large part of that is due to better biologic drugs and breakthrough therapies that have entered the market in recent years, though the growing burden of cancer drug costs has been a prime issue for doctors, politicians, and patients in recent years.

The study also found that patients are receiving a greater share of chemotherapy infusions in a hospital setting rather than a physician’s office, which has a dramatic effect on costs. The proportion of chemotherapy infusions delivered in hospital outpatient departments nearly tripled for Medicare patients and grew almost eight-fold for those with private insurance. The additional cost per patient reached as high as $46,272 in 2014.

The report release on Wednesday was accompanied by a meeting with CMS to share the results.