More on cancer care study
Cancer is an important cost issue for commercial benefit programs. Based on our analysis of Medstat 2007, cancer patients make up 0.68% of a commercially insured population, but account for 10% of the overall healthcare costs. Over the course of a year, a cancer patient receiving chemotherapy (approximately 22% of all cancer patients) incurred, on average, allowed costs of approximately $111,000 a year, almost four times the cost of a cancer patient not receiving chemotherapy. This paper quantifies the medical service utilization and costs of cancer patients receiving chemotherapy, and, in particular, identifies unexplained variation in several utilization and cost measures that indicate opportunities for better quality and cost management…The variation in chemotherapy-related inpatient admissions, ER visits and chemotherapy costs suggest opportunities for improvement, and we modeled the impact of a 10% reduction in national average rates for these key quality outcome metrics. The 10% reduction is significantly less than the regional variation we observed for each of these three categories. The cost reduction per chemotherapy patient would be approximately $3,000 or 2.6% of a patient’s total annual costs.
Our analysis focuses on 10 common cancer types where chemotherapy is a key treatment modality. These 10 cancers account for 65% of cancer patients in a commercial population, and 25% of the 10 cancer population receives chemotherapy in a year. The members receiving chemotherapy and having one of the 10 cancers make up about 0.11% of commercial members but account for about 4% of overall healthcare costs… Some payers are increasing efforts to manage chemotherapy utilization. Although treatment guidelines are well established, standards for treatment outcomes are lacking. This means that measuring adherence to guidelines rather than outcomes could be a useful tool for payers. Few payers require that providers demonstrate adherence to guidelines to receive reimbursement. Establishing best practice benchmarks for particular cost, utilization and quality metrics could improve the ability to monitor and set targets for improving the quality of care delivery for cancer patients receiving chemotherapy.