Exploring the Hidden Financial Burden of Cancer Therapy

Approaches to cancer treatment have rapidly grown complex and costly, causing heightened awareness among patients, physicians, employers, and insurance providers. Annual costs for cancer are about $107 billion, accounting for 20% of all health care costs.[1]

Additionally, the number of cancer patients receiving treatment will increase threefold over the next 30 years, leading many to speculate that oncology may soon exceed cardiology as the most costly medical illness.[2]

Direct medical expenditures for cancer management comprise only one third of the total cancer costs. These direct costs include treatment expenses, hospice services, and expenditures for rehabilitation. The remaining two thirds of all cancer costs reflect indirect costs from both out-of-pocket expenditures and opportunity costs for patients, families, and friends.

Although comprehensive health insurance plans define indirect costs as a patient’s share of charges for premiums, deductibles, and copayments, these include a mere fraction of the actual expenses that patients bear. The burden on patients and their families of nonmedical costs for clinic visits, management of illness, support, and occupational time lost has been inadequately assessed and far exceeds the out-of-pocket costs addressed by insurance providers.

These expenditures permeate every stage of illness, and, regardless of socioeconomic status, most families confront financial problems associated with cancer treatment.

Health expenditures for cancer patients are creating greater concern because they are likely to increase over time, and inadequate insurance coverage may force individuals to pay an even greater proportion of expenses out-of-pocket.[3,4]

Supplemental Insurance

Because of concerns over the financial toll of out-of-pocket expenditures on cancer patients, there is increasing consumer interest in supplemental cancer insurance. Although awareness of cancer insurance is steadily mounting in the United States, it has long achieved popularity and success in providing cancer benefits in the United Kingdom, Canada, and Japan.[5]

Cancer insurance specifically focuses on the medical financial risks produced by cancer, and extends coverage beyond medical costs, providing supplemental compensation to families.[6] Most cancer insurance policies provide coverage for specific expenses such as clinic visits, transportation, hospice care, and acquisition of prosthetic devices.[7]

Although supplemental insurance may fill significant gaps in coverage, it may not address all of the out-of-pocket costs associated with cancer care, and it may not be a viable option for those with lower incomes.

A Portrait of Cancer Costs

To obtain a more comprehensive portrait of cancer costs, we must evaluate the costs associated with clinic visits, purchases to manage illness and treatment, and expenses for emotional and physical support, as well as lost wages.

Substantial out-of-pocket expenditures are often incurred as a result of clinic visits, depending on the distance from the patient’s home to the clinic. Travel expenses also involve parking fees, which may be costly if the clinic is located in an urban area.

Out-of-pocket expenditures significantly increase if the patient is required to remain in the clinic for an extended period of time. During these prolonged clinic visits and overnight stays, hospital meals and other expenses account for important costs that are not covered by insurance.

In a study of 139 cancer patients, clinic visits, food expenses, transportation, and lodging amounted to an average of more than $100 a month.[8]

Cancer patients also incur out-of-pocket expenditures in association with treatment. For example, many patients seek out alternative therapies, special lotions, and nutritional supplements, which can cost more than $500 a month.

The side effects of chemotherapy treatment also result in payments for pain relief medications, many of which are not reimbursed by insurers. These can range from $2 to $300, depending on the timespan and type of prescription purchases and the severity of side effects.

Another substantial cost associated with chemotherapy is the purchase of wigs for patients who have hair loss, which typically is in the range of $180 per wig.[3]

Other "hidden" costs of cancer care involve expenses related to supporting and assisting the patient in his or her normal tasks. More than 90% of cancer patients in one study reported needing assistance with personal care, shopping, and/or transportation.[9]

As patients encounter the heavy burden of managing their illness, they frequently opt to pay for housekeeping services and additional equipment or appliances to minimize housework. Ordering meals is another typical method of reducing the effort spent on daily household tasks.

Telephone charges also can be substantial, especially considering the numerous calls required to arrange appointments and support.

In addition to family and friends, patients commonly seek support through professional counseling. Housekeeping, counseling and equipment can be as much as $1,000 a month.[3]

As cancer treatment increasingly occurs on an outpatient basis, informal caregivers assume a greater responsibility for patient care at home. The amount of time lost results in forgone earnings from the potential wages of the caregiver.

In one study, caregivers reported substantial burdens, including the utilization of savings and loans to subsidize their efforts. Additionally, in one fifth of cases of serious illness, a family member had to quit work or make another major life change to provide patient care.

The shift in roles in patients’ families often leads to an overall loss of household income and family savings. Loss of most or all of the family savings was reported by one third of the surveyed families, and another one third reported loss of the major source of income.[10]

Lost Income

One of the greatest financial losses may be incurred as a result of lost income. Many patients experience decreases in monthly wages due to the extensive use of sick days and vacation time. Moreover, people who are self-employed or part of a family business will have to rearrange their schedules.

Although treatment results in fatigue and weakness, creating obstacles that interfere with employment, returning to work is crucial for patients who are heading a household, living on a low income, and/or supporting a family. Given and colleagues found that patients lost a 3-month average of $1,258 in earnings and family members lost $214.[11]

These assessments of various expenses provide a more complete description of the total informal costs incurred by families with a member who has cancer. Patients experience an extensive range of out-of-pocket costs that extend far beyond the limited coverage provided by health insurance and the associated co-payments and deductibles. Although the total costs of treatment varies by clinical stage, Given et al estimated a 3-month average spending of $2,720.[11]

Clearly, serious medical illness is devastating not only to patients but also to their families. Patients make treatment decisions that significantly affect the family and challenge household stability and viability.[12] Corvinsky et al observed that high treatment costs forced many families to make serious adjustments, such as moving to a less expensive neighborhood, delaying education, and/or withholding medical care for others.[10]

Improvements in cancer screening, prevention, early detection, and management have led to escalation of the costs of cancer care. Pressures to find better treatment regimens are often in conflict with efforts to contain costs at every juncture. Hospitals strive to implement a more cost-effective environment through improved patient clinical outcomes, satisfaction, and efficacy.[13]

The medical and financial costs incurred by cancer management have fostered a growing interest in supplemental insurance by both patients and their employers.[14]

As a growing portion of the money spent on health care benefits by employers is being used for payment of oncology benefits,[15] emphasis on assessing the entire range of needs that generate expenses and the potential effect of serious illness on employee functionality is becoming increasingly important.

Since one in two men and one in three women are expected to develop cancer during their lifetime,[1] patients will look to health care professionals and policy makers to address the growing financial burden of cancer in the coming years.

References:

1. American Cancer Society: Cancer Facts and Figures 2000. Atlanta, ACS, Inc., 2000.

2. Mortenson L: How to judge the cancer services benefit component of your health insurance plan. Cancer 82:2061-2067, 1998.

3. Moore K: Breast cancer patients’ out-of-pocket expenses. Cancer Nursing 22:389-396, 1999.

4. Greenwald H, Polissar N, Borgatta E, et al: Social factors, treatment, and survival in early-stage non-small cell lung cancer. Am J Pub Health 88:1681-1684, 1998.

5. Bennett C, Weinberg P, Lieberman J: Cancer insurance policies in Japan and the United States. West J Med 168:17-22, 1998.

6. Anderson J: Cancer insurance: A valuable product coming of age. Broker World August:40, 1996.

7. Weaver C: The real costs of cancer treatment. Broker World December:62, 1993.

8. Houts P, Lipton A, Harvey HR, et al: Nonmedical costs to patients and their families associated with outpatient chemotherapy. Cancer 53:2388-2392, 1984.

9. Siegel K, Raveis V, Houts P, et al: Caregiver burden and unmet patient needs. Cancer 68:1131-1140, 1991.

10. Corvinsky K, Goldman L, Cook F, et al: The impact of serious illness on patients’ families. JAMA 272:1839-1844, 1994.

11. Given B, Given C, Stommel M: Family and out-of-pocket costs for women with breast cancer. Cancer Practice 2(3):187-193, 1994.

12. Gorey K, Holowaty E, Fehringer G, et al: An international comparison of cancer survival: Toronto, Ontario, and Detroit, Michigan, metropolitan areas. Am J Public Health 87:1156-1163, 1997.

13. Chandler S, Payne R: Economics of unrelieved cancer pain. Am J Hospice & Palliative Care. July/August:223-228, 1998.

14. Orred D: What the private sector does not know about purchasing oncology services. Cancer 82:2035-2038, 1998.

15. Tatro D: The next sales boom: Critical illness insurance protection. Broker World June:80-88, 1998.