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New Health Affairs: On Cancer Care, U.S. Spends More And Gets More

April 10th, 2012

The United States spends more on cancer care than European countries. However, a study published in the newly released April issue of Health Affairs suggests that investment also generates a greater “value” for US patients, who typically live nearly two years longer than their European counterparts.

Tomas Philipson, the Daniel Levin Chair in Public Policy at the University of Chicago, and his coauthors found that the cost of cancer treatment in the United States was higher than such care in ten European countries from 1983 to 1999. However, they also found that for most cancer types investigated, US cancer patients lived longer than their European counterparts. Cancer patients diagnosed during 1995-99, on average, lived 11.1 years after diagnosis in the United States, compared to just 9.3 years from diagnosis in Europe.

The researchers concluded that by standard metrics that value additional years of life in dollar terms, US cancer patients paid more but achieved better results in terms of longevity. Even after considering higher US costs for treatment, their calculations showed the extra longevity was worth an aggregate of $598 billion—an average of $61,000 for an individual cancer patient. The value of additional survival gains was highest for prostate cancer patients ($627 billion) and breast cancer patients ($173 billion).

This analysis suggests that the higher-cost US system of cancer care delivery may be worth it in terms of the longer survival it delivered, say the authors, although further research is required to determine what specific tools or treatments are driving improved cancer survival in the United States.

The study is one of several in the April issue of Health Affairs that look at cancer spending and assess the value of treatments that can cost thousands of dollars yet might offer patients with a terminal illness the hope of staying alive longer. Taken together, the articles might help policy makers, patients, providers. and others decide when a high-cost treatment is “worth” the expense in terms of delivering better health to patients.

Other papers in this issue of Health Affairs examine other aspects of the value of cancer treatments, as follows:

  • An analysis by Darius N. Lakdawalla at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California and coauthors shows that 77 percent of surveyed cancer patients preferred “hopeful gambles”treatments that offer a 50 percent chance of adding three years to their survival but also a 50 percent chance of no additional survival— to “safe bet” treatments that would keep them alive for eighteen months. The authors recommend incorporating this hopefulness that cancer patients displayed into metrics that are used to evaluate cancer care.
  • Seth Seabury at the RAND Corporation and coauthors examined treatment choices of terminally ill cancer patients to find out how much they valued certain kinds of care. They found that patients were willing to pay a price for treatment of metastatic cancer that was, on average, twenty-three times higher than its actual cost. This gap indicates that traditional methods used to estimate the value of treatments for terminal illness may need to be revisited, say the authors.
  • Healthy people who responded to a survey were willing to pay more in insurance premiums for generous coverage of high-cost drugs that treat cancer and other serious diseases, according to John Romley at the University of Southern California and colleagues. The cost of covering specialty drugs is about $5 per month, whereas survey respondents were willing to pay $12.94 per month for the coverage.  In effect, this means that they were willing to pay $2.58 for every dollar in out-of-pocket costs that they would pay if they had a less generous insurance plan that didn’t offer coverage of these high-cost drugs.
  • Peter Ubel of Duke University and coauthors surveyed oncologists in the United States and Canada on the value of expensive cancer drugs in relation to gains in survival. They found that physicians aren’t consistent in their opinions about how many months an expensive new therapy should extend a person’s life before the cost of therapy is justified. The authors recommend providing physicians with clinical guidelines to help them factor cost and value into decisions about treatment.
  • Cancer care has raised unique issues for countries and other entities conducting evaluations that help to inform coverage and reimbursement decisions. Some countries have granted cancer treatments special status when it comes to these technology assessments, according to Peter Neumann and colleagues at Tufts Medical Center. Some countries have created special pathways for these reviews, while others have created exceptions to provide better access to cancer treatments. In the United States, Medicare grants cancer special status in paying for off-label uses of cancer drugs under unique rules not used for other drugs. “Worldwide, we demonstrate that health technology assessment organizations are struggling with cancer’s ‘exceptionalism,’” the authors write.

The cluster of articles in the April issue of Health Affairs was supported by Bristol-Myers Squibb, the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, and the consulting firm Precision Health Economics.

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2 Trackbacks for “New Health Affairs: On Cancer Care, U.S. Spends More And Gets More”

  1. Health Care Does Not Grow On Trees — Laissez FaireLaissez Faire
    October 29th, 2012 at 6:01 am
  2. Cancer Treatment Costs are Worth It | John Goodman's Health Policy Blog |
    April 11th, 2012 at 2:20 pm

2 Responses to “New Health Affairs: On Cancer Care, U.S. Spends More And Gets More”

  1. amyorke Says:

    According to the CDC, there are 11.7 million cancer survivors in the US.1 66% of people diagnosed with cancer are expected to live at least five years after diagnosis.1 The investment given to people in the US with cancer provides more “value” due to increased length of survival; however, what is the health care system doing to assist those that survive? People treated for cancer often feel better before their treatment began than they do when it is completed.2 Cancer treatments are toxic and can cause significant disability.2 Difficulty in walking, muscle weakness, limits in activities of daily living, and impaired balance are among the leading functional problems reported by cancer survivors.3 The Institute of Medicine (IOM) report in 2006 entitled From Cancer Patient to Cancer Survivor: Lost in Transition highlighted the unique needs of cancer survivors who have completed treatment and are left with residual impairments that may impact function and recommended that cancer survivorship be a distinct phase of cancer care.4
    Referring cancer survivors for follow up care is essential in assisting survivors reach their maximum functional capacity. Julie Silver, MD a cancer survivor has four key solutions that would assist in improving cancer care: 5
    1. Define “rehabilitation specialist” who would serve on a cancer committee in a treating hospital. Silver recommends this person should be licensed and/or board certified in rehabilitation medicine (e.g. physiatrists, nurses, physical therapists, occupational therapists, and speech language pathologists)
    2. Invite key rehabilitation medicine organization (e.g. American Academy of Physical Medicine and Rehabilitation, American Physical Therapy Association, American Occupational Therapy Association, American Speech-Language-Hearing Association, and the Association of Rehabilitation Nurses) to offer their direction and expertise for cancer rehabilitation.
    3. Include cancer rehabilitation topics at conferences about cancer care.
    4. Facilitate the development of multidisciplinary teams that have been trained in evidence-based cancer rehabilitation.
    5. Cancer rehabilitation is designed to help survivors regain control over many aspects of their lives and be as independent as possible.2 A cancer rehabilitation team may consist of physiatrists, physical therapists, occupational therapists, speech language pathologists and others. Cancer rehabilitation is typically reiumbursable.5 Third-party payors typically will reimburse for individualized interventions that address survivors’ rehabilitation needs if they are performed by licensed rehabilitation professionals.5
    Increased survival after cancer treatment does not necessarily equate with the ability for survivors to function. Cancer survivors should not be expected to “accept a new normal” after treatment is completed.6 Cancer survivors deserve the opportunity to access qualified rehabilitation professionals in order to improve their ability to function and return to life roles.
    1. Cancer Survivors—United States, 2007. Morbidity and Mortality Weekly Report. 60(9):269-272. Available at: Accessed on 04/20/12.
    2. Hutchison NA. Cancer Rehabilitation. Minnesota Medicine. October, 2010. Available at: Accessed on 04/20/2012.
    3. Cheville AL, Beck LA, Petersen TL, Marks RS, Gamble GL. The detection and treatment of cancer-related functional problems in an outpatient setting. Support Care Cancer. Jan 2009;17(1):61-67.
    4. Hewitt M. From Cancer Patient to Cancer Survivor: Lost in Transition. Washington, DC: The National Academies Press; 2006.
    5. Silver JK. Improving cancer rehabilitation. Oncology Times. 2011;33(20):44.
    6. Silver JK. Strategies to overcome cancer survivorship care barriers. PM & R. 2011;3:503-506.

  2. mikeh Says:

    This study was kind of debunked: ….”You don’t look at survival rates — this is a classic misuse of survival rates,” Brawley said. “You have to look at death rates for each disease and not survival rates. The measurement should not be expense versus survival — it should be expense versus mortality rate.”…. (from Dr. Otis Brawley, the chief medical officer and executive vice president at the American Cancer Society)

    Also the implication of extra expense being the (apparently flawed) reason for better outcomes: seeing as Europeans live longer on average, there should be some other procedures in the US that would benefit from less spending. Of course the initial study is seriously flawed, so that doesn’t necessarily follow.

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