By John McCleery
Historically, cancer has been one of the costliest medical conditions in the United States, and with new approved treatments coming to market, cancer patients with certain tumor types are now receiving expensive chemotherapy and biologic agents, both alone and in combination.
Simultaneously, commercial health insurers are increasingly shifting healthcare costs to patients through higher premiums, deductibles, and co-insurance and co-payment responsibilities.
When compared with patients who do not have a cancer history or a diagnosis of cancer, patients with cancer have been shown to be more likely to file for bankruptcy than non-cancer patients. In a study by Ramsey, et al, the investigators found that patients diagnosed with cancer were 2.5 times more likely to file for bankruptcy after their diagnosis than non-cancer patients.1
Furthermore, cancer survivors are more likely to report being unable to work because of their health—which jeopardizes their employment-based health insurance—than non-cancer patients.2
Factors such as these indicate that financial distress can be considered a major issue associated with cancer treatment, even for people who have healthcare insurance. The term financial toxicity has been coined to describe this growing recognition of high out-of-pocket (OOP) expenditures for patients undergoing cancer treatment.
Out-of-pocket costs are the amounts that patients pay directly for their medical care, including insurance co-payments, co-insurance, and deductibles for prescription and nonprescription medications, hospitalizations, outpatient services, and other types of medical care.
Analysis of real-world data
Results from an analysis of real-world claims data on the OOP costs on cancer patients has been recently published by Milliman (April 2017).3 The investigators tracked health plan spending in newly diagnosed cancer patients with employer-based insurance from 2011 through 2014 and found that the first year of a cancer diagnosis typically incurs the highest patient cost shares than subsequent years.
The claims data studied included patients diagnosed with either breast, lung, or colorectal cancer and showed a cumulative average healthcare spending between $100,000 to $280,000, depending on tumor type, over the four years of study following diagnosis.
For cancer survivors who maintained their health insurance, health spending slowed after the initial diagnosis, but their OOP expenditures persisted as their care continued and never went back to pre-diagnosis levels.
On average, the investigators found that immediately following a cancer diagnosis, patients’ healthcare spending jumped from less than $2,000 a month (pre-diagnosis) to as high as $25,000 in the month alone of diagnosis. Patient OOP costs also increased dramatically in the first month of diagnosis from $1,800 to $2,900.
In the first year after diagnosis, the average per patient OOP cost, depending on cancer type, ranged from $3,600 to $5,500. Some of these costs could be attributed to patients having to meet their annual deductible every calendar year as OOP costs showed seasonal peaks, typically, in the month of January when the deductibles were met.
Over the course of the four-year study, the investigators found that of the patients they could track, average cumulative healthcare costs per patient totaled $101,000 for breast cancer, $165,000 for colorectal, and a whopping $282,000 for lung cancer. Patient OOP costs ranged from $7,500 to $11,000 suggesting that employer-based insurance shouldered much of the financial responsibility (Figure 1).
Source: Dieguez G, Ferro C, Pysenson BS. Milliman Research Report. April 11, 2017.
Table 1 reflects the cumulative healthcare spending and cumulative OOP costs at different time periods after diagnosis. According to the Milliman report, OOP costs slowed over time as depicted in lung cancer patients: the average total spend was about $50,000 every 6 months for the first 2 years of diagnosis (months 0-23), but then dropped to about $20,000 in subsequent months.
Source: Dieguez G, Ferro C, Pysenson BS. Milliman Research Report. April 11, 2017.
Implications for practices
Having health insurance does not necessarily reduce the financial burden on patients with cancer. According to a study by Zafar et al, insured patients undergoing cancer treatment and seeking co-payment assistance experienced considerable subjective financial burden, and they altered care to defray OOP costs. In the study of 254 insured cancer patients requesting co-payment assistance4:
- 75% applied for drug co-payment assistance
- 42% reported a significant or catastrophic subjective financial burden
- 68% cut back on leisure activities
- 46% reduced spending on food and clothing
- 46% used savings to defray out-of-pocket expenses
To save money, patients took less than the prescribed amount of medication, partially filled prescriptions, or avoided filling prescriptions altogether.
Current law requires most private insurance carriers to limit the annual patient OOP spending. For people who purchased a marketplace plan from the Affordable Care Act in 2017, the OOP limit is $7,150 for an individual plan and $14,300 for a family plan. This maximum does not include the monthly premiums a health plan member pays for coverage, but without that imposed limit, many patients potentially wouldn’t be able to afford their healthcare.
Bankruptcy rates are almost twice as high for cancer patients as for the general population. According to a study published by the Fred Hutchinson Cancer Research Center in Seattle, Washington, bankruptcy rates were highest among cancer survivors and non-cancer controls, age 20 to 34 years.5
For bankruptcy filings within 5 years of diagnosis, the proportion of cancer patients was about 1.7% vs 0.7% for the control group.
The incidence rates for bankruptcy at 1 year after diagnosis, per 1,000 person-years for the cancers with the highest overall incidence rates were as follows:
- All cancers 6.1, thyroid 9.3, lung 9.1, uterine 6.8, leukemia/lymphoma 6.2, colorectal 5.9, melanoma 5.7, breast 5.7, and prostate 3.7
Bankruptcy filing rates differed greatly by age: younger people with cancer experienced the highest bankruptcy rates across all cancer types (Table 2). Among cancer survivors age 18 to 64 years, ambulatory care accounted for the largest share of medical expenditures.
aNo instances of prostate cancer for men under age 35.
Source: Ramsey S, Blough D, Kirchhoff A, et al. Health Aff. 2013;32(6):1143-52. doi:10.1377/hlthaff.2012.1263.
… And effects on mortality
In a 2016 report, Ramsey et al, further reported on findings that explored the question of whether those who filed for bankruptcy after a cancer diagnosis had a higher risk for death from any cause. They found a consistent, positive association between filing for bankruptcy and earlier mortality, signifying that patients who reached the point of financial collapse after a cancer diagnosis had poorer outcomes than those who did not file for bankruptcy.
Investigators linked Western Washington SEER Cancer Registry data and federal bankruptcy records over 15 years. Between 1995 and 2009, 231,596 cases of cancer were diagnosed in the region. The report showed that patients who filed for bankruptcy (n=4,728) were more likely to be younger, female, and nonwhite, and had local- or regional- (v distant-) stage disease at diagnosis, and received treatment.
According to the authors, the association between bankruptcy filing and mortality varied widely across individual cancers, with mortality rates significantly higher among patients with breast, lung, colorectal, or prostate cancer who filed for bankruptcy versus patients with those cancers who did not file for bankruptcy.
Mortality risk was almost doubled among patients with prostate cancer who filed for bankruptcy compared with those who did not, and mortality risk was 2.5 times as high among patients with colorectal cancer who filed compared than those who did not file (Table 3).
Source: Ramsey SD, et al. J Clin Onc. 2016;34(9):980-986. DOI: 10.1200/JCO.2015.64.6620.
On the face of it, studies like these show that financial distress seemingly has a significant impact on the health outcomes of patients with cancer; and that cancer care stakeholders may need to consider the financial situation of patients as a matter of course alongside the initiation of therapy.
- Ramsey S, et al. Health Affairs. 2013;32(6):1-6.
- NIH.gov. https://www.cancer.gov/about-cancer/managing-care/financial-toxicity-hp-pdq.
- Dieguez G, Ferro C, Pysenson BS. A multi-year look at the cost burden of cancer care. Milliman Research Report. April 11, 2017.
- Zafar SY, Peppercorn JM, Schrag D, et al. The Oncologist. 2013;18(4):381–390. doi:10.1634/theoncologist.2012-0279.
- Ramsey S, Blough D, Kirchhoff A, et al. Health Aff. 2013;32(6):1143-52. doi:10.1377/hlthaff.2012.1263.
- Ramsey SD, et al. J Clin Onc. 2016;34(9):980-986. DOI: 10.1200/JCO.2015.64.6620.