The Financial Burden of Cancer

By Brooke Hardison Wang

Cancer care cost the American public $104.1 billion in 2006 – the most recent year for which statistics are available – according to NCI’s newly released Cancer Trends Progress Report-2009/2010 Update.  The financial burden of cancer looms even larger, however, when you consider other costs, such as losses in time and economic productivity.  In 2005, for example, lost economic productivity due to premature death from cancer was estimated to be $134.8 billion.  Experts suggest that the financial burden of cancer will only get larger as the U.S. population ages and grows, cancer survival improves, and cancer treatments become more expensive.The five most commonly diagnosed cancers – lung, breast, prostate, colorectal and lymphoma – also lead the list of expenditures.  Breast cancer care represented the largest segment in 2006 ($13.9 billion), followed by colorectal cancer ($12.2 billion), lung cancer ($10.3 billion), lymphoma ($10.2 billion) and prostate cancer ($9.9 billion).   In terms of lost productivity, lung cancer, which is both common and often fatal, represented the highest loss of lifetime earnings by far, of $36.1 billion. This was followed by breast cancer ($12.1 billion), colorectal cancer ($10.7 billion) and the less common but often fatal pancreatic cancer ($6.6 billion).

Because patterns of care and costs over the course of an individual’s cancer experience vary, economists often analyze the costs of cancer treatment in three segments or phases:  the initial phase, often one year after a diagnosis; the last year of life; and the continuing care phase, which is in between the initial phase and the end of life.  When a cancer has longer average survival rate, such as with breast cancer, melanoma and prostate cancer, the largest proportion of cancer expenditures in a specific year tends to be for survivors in continuing care phase.  Conversely, cancers with short survival following diagnosis, such as cancers of the pancreas, stomach and lung, tend to be the most costly in the initial and final phases.

Variations in costs during the first year after diagnosis are due, in part, to differences in typical cancer care during the first year.  For example, cancer-related surgery represented the largest portion of costs in colorectal cancer patients in the first year (53 percent), but only 25 percent of breast cancer costs and 12 percent of prostate cancer costs.  Other hospitalizations accounted for the largest portion of costs in lung cancer patients in the first year, and only half of the costs in prostate cancer patients are accounted for by cancer related surgery, chemotherapy, radiation and other hospitalizations combined.

The researchers utilized data from the tumor registries of the NCI Surveillance, Epidemiology and End Results (SEER) program, SEER-Medicare – a database that links records from SEER to Medicare claims from the Center for Medicare and Medicaid Services, and the US Census Bureau. They used the linked SEER-Medicare data from patients aged 65 and older (the population with the highest cancer prevalence) to estimate cancer costs in older patients and then used cost ratios derived from previous studies to estimate costs for younger cancer patients.  The researchers chose to use the linked SEER-Medicare data for the report because, “these data are the most comprehensive longitudinal data available with detailed information about cancer diagnosis, care received and survival following diagnosis,” said K. Robin Yabroff, Ph.D., M.B.A., of the NCI’s Health Services and Economics Branch.

For more information on the financial burden of cancer, please see the chapter of the report titled “Costs of Cancer Care.”

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