Cancer patients receiving active treatment with chemotherapy incur four times the costs of cancer patients not receiving chemotherapy. The cost of patients receiving chemotherapy has been reported to vary by site of service, with higher costs when treatment is delivered in a hospital outpatient setting (HOP) versus a physician office visit (POV). Recent reports indicate an increasing portion of chemotherapy is being delivered in HOP settings and less in POV settings, which can increase costs for payors and/or employers.
This study provides new information by examining Truven MarketScan® commercial claims data (index years 2009 and 2010) to calculate the episode cost of chemotherapy delivered in the HOP versus POV settings for specific disease states. HOP costs were 28% to 53% higher than the POV costs depending on the cancer and adjuvant or metastatic stage. In particular, we noted significantly higher per-episode cost for chemotherapy drugs, radiation oncology, imaging (CT, MRI, and PET scans) and laboratory services in the HOP setting.
This report was commissioned by Genentech.
Nebraska recently enacted a chemotherapy parity law requiring insurance companies to insure oral chemotherapy the same as intravenous cancer treatments. This article in the Lincoln Journal Star cites a 2010 study conducted by Kate Fitch, Kosuke Iwasaki, and Bruce Pyenson on the cost-sharing of oral and intravenous cancer drugs.
Here is an excerpt from the article:
Sen. Jeremy Nordquist of Omaha, who spearheaded the legislation in Nebraska, said the lack of parity in coverage between intravenous and oral chemotherapy medications is a growing problem. Some cancer treatments cost $5,000 to $10,000 a month, and some patients are being forced to pay high out-of-pocket costs for chemotherapy taken orally.
“This … will make life-saving cancer treatments more accessible and affordable for cancer patients,” he said. “The decision about the best course of treatment, whether it be IV chemo or chemo in a pill form, will be made between patients and their doctor, not dictated by their insurance company.”
Nordquist said research shows that when confronted with the reality of high out-of-pocket expenses, many cancer patients forgo expensive therapy and discontinue treatment, in part because they do not want to saddle their families with unmanageable debt.
And because oncologists know how expensive oral medications can be, he said, they often do not prescribe them — even when they think that would be the best option.
The actuarial and benefits consulting firm Milliman Inc. did a study in 2010 that estimated that requiring similar coverage for oral chemotherapy would cost less than $6 a year per person in most insurance plans.
To read the entire Milliman study, click here.
The Society of Actuaries (SOA) has selected Milliman to complete the data compilation for the latest cancer experience study in order to support the development of new cancer valuation tables. These tables will be presented to the National Association of Insurance Commissioners (NAIC) for adoption as the standard for setting reserves for cancer policies.
The objective of this project is to receive and summarize detailed cancer claim data from 2001 through 2011 from approximately 10-20 insurance companies. The desired end result is a comprehensive database of cancer claim costs aggregated along relevant factors such as age, sex, single vs. family, product type, and other product groupings.
Milliman will create coding routines that will analyze and validate the data to ensure that the submissions are logically consistent and that the values given are within the ranges expected for the product. Additional routines will be developed to calculate exposure and incidence rates in order to determine the final claim costs.
The current cancer valuation tables were publishing in 1985 based upon cancer experience from 1978 thru 1980. The evolution of cancer treatment over the past 30 years has rendered the 1985 Cancer Tables outdated. The results of this experience study will be used to develop a new set of tables that will replace the 1985 tables.
It is currently estimated that the companies participating in the study will represent approximately 70% of the U.S. cancer insurance industry. Data compilation of the study is targeted for late 2012. The proposed valuation table is to be presented to the NAIC in 2013.
Bruce Pyenson presented his study on lung cancer screening at Health Affair’s “Value in Cancer Care” briefing on April 12 in Washington DC. Watch his presentation at HealthAffairs.org – scroll down to “The Case For Lung Cancer Screening of High-Risk Patients & Improving Payment And Delivery Of Cancer Care.”
Also, here is the study’s abstract:
The Washington Post looks at oral oncology and the way insurers pay for such drugs. Here is an excerpt:
People who get traditional IV chemotherapy on an outpatient basis often pay a flat co-payment that covers the drug as well as the cost of administering it. Annual out-of-pocket costs are also typically capped.
Oral anti-cancer medications, on the other hand, are generally considered a pharmacy benefit. Instead of a co-payment, plan members often pay a percentage of the drugs’ cost — up to 50 percent, in some cases — with no annual out-of-pocket limit. And these drugs are expensive, often costing tens of thousands of dollars a year.
In recent years, states have stepped in to address the problem. Since 2007,
19 states and the District have passed laws requiring insurers to provide coverage for oral cancer drugs that is equivalent to infusion drugs, according to the National Patient Advocate Foundation. Five states, including Virginia and Maryland, have passed laws in 2012 alone, and others are considering proposals, according to advocacy groups.
Is oral chemotherapy a cost-effective way to treat cancer? The article addresses this question:
But oral oncology parity laws don’t necessarily drive up costs. According to a 2010 study by benefits consultants Milliman, the estimated cost to most health plans for complying with oral oncology parity laws would be less than 50 cents per member per month.
A new bill before the Nebraska legislature seeks to achieve parity between how insurance policies handle chemotherapy administered by IV versus chemotherapy administered via oral medications. Here are some details from an Association Press article:
The measure by Omaha Sen. Jeremy Nordquist seeks to address what supporters see as a disparity between how the two cancer treatments are classified: Insurance policies usually cover the cost of IV chemotherapy as a medical benefit, while oral medications are viewed as prescription drug benefits with much larger copayments.
Nordquist said the idea for the bill came from his brother, an Omaha oncologist, who reported encounters with roughly half a dozen patients who could not afford the preferred cancer treatment in pill form. He pointed to a study by Milliman Inc., a national health care consulting firm, which found that the per-payer increase ranged from 5 cents to $1.50.
To see the full Milliman report on oral chemotherapy, go here.