treatment contributes more to health care costs in the United States
than treatment for any other disease. Beneficiaries of Medicare who develop cancer and don't have
supplemental health insurance incur out-of-pocket expenditures for their
treatments averaging one-quarter of their income with some paying as
high as 63%, suggested results of a survey-based study
published in JAMA Oncology.
Researchers at the Johns
Hopkins Bloomberg School of Public Health and the Johns Hopkins Kimmel
Cancer Center say their study shows that a cancer diagnosis can be a
serious financial hardship for many elderly and disabled who receive
Medicare, with annual out-of-pocket costs ranging from $2,116 to $8,115,
on top of what they pay to have health insurance. The research shows
that hospitalizations are a major driver of out-of-pocket costs.
‘A cancer diagnosis can be a financial hardship for many who receive Medicare, with annual out-of-pocket costs ranging from $2,116 to $8,115.’
spending associated with a new cancer diagnosis gets very high quickly,
even if you have insurance," says one of the study's authors, Lauren
Hersch Nicholas, an assistant professor in the Department of
Health Policy and Management at the Bloomberg School. "The health shock
can be followed by financial toxicity. In many cases, doctors can bring
you back to health, but it can be tremendously expensive and a lot of
treatments are given without a discussion of the costs or the financial
For their study, Nicholas and Amol K. Narang, an instructor in the Department of Radiation Oncology and Molecular
Radiation Sciences at the Johns Hopkins University School of Medicine
and member of the Kimmel Cancer Center, examined data from more than
18,000 Medicare beneficiaries who were interviewed biennially between
2002 and 2012 for the Health and Retirement Survey.
The survey is funded
by the National Institute on Aging and includes data from seniors in
the U.S. with wide geographic, socioeconomic and ethnic representation.
Over the course of the study period, more than 1,409 people received a
Medicare covers just 80% of outpatient
health costs and has co-pays of $1,000 for each hospital visit. In the
study, 15% of participants had Medicare alone. Others had some
type of supplemental insurance: 50% had a Medigap plan or were
still receiving employer or retiree benefits; 20% participated in
a Medicare HMO; 9% received Medicaid (the federal plan for
the poorest Americans); and 6% got benefits from the Veteran's
Administration (VA). Each type of insurance covers a varying amount of
the costs that Medicare doesn't cover.
The researchers found that
the average annual out-of-pocket costs associated with a new cancer
diagnosis were $2,116 for Medicaid beneficiaries; $2,367 for the VA;
$5,492 for those with employer-sponsored plans; $5,670 for those with
Medigap; $5,976 for those with a Medicare HMO; and $8,115 for those
without supplemental insurance of any kind. There are no caps on how
much Medicare beneficiaries can be asked to pay.
respondents without supplemental insurance reported that their average
annual out-of-pocket costs were one-quarter of their annual income and,
of those, 10% reported that those costs were at least 63%
of annual income.
"Cancer costs are high, and a significant
segment of our seniors who don't have adequate insurance coverage can be
hit hard by this," Narang says. "In addition to efforts aimed at
lowering cancer costs, we need to think about how to offer our seniors
better insurance coverage."
The researchers say one solution,
though expensive, would be to cap the amount of out-of-pocket costs a
patient can be charged each year. Many private insurance plans have such
caps, known as catastrophic coverage. Congress would need to enact such
Narang and Nicholas found that inpatient
hospitalizations accounted for between 12% and 46% of
out-of-pocket cancer spending depending on whether and what type of
supplemental insurance a patient had. Inpatient care can be necessary
for surgical procedures and to handle severe side effects of treatment.
Narang says that doctors can help avoid hospitalizations with
more intensive outpatient management of common side effects. He also
points to the Kimmel Cancer Center's urgent care clinic which has
reduced hospitalization rates in patients undergoing cancer therapy. For
example, among those undergoing radiation, the average number of
patients who were hospitalized during their course of treatment or
within 60 days decreased from 35 per month to 18 per month after the
clinic opened. Of note, 10% of hospitalizations over this time
resulted in patient liabilities of more than $2,000; among Medicare
patients without supplemental insurance, 10% of their
hospitalization-associated patient liabilities exceeded $10,000.
researchers say that the study's limitations include the potential for
inaccuracies in survey respondents' answers, misclassification of data
or incomplete reporting. For the study, the researchers provided ranges
within certain survey questions when respondents could not identify a
Because the study did not identify specific
information on the type of hospitalizations among survey respondents,
Narang says that more research is needed to understand which of these
hospitalizations are truly preventable.
"We should expect to spend
some of our income on health care," Nicholas says. "But many people are
unprepared to spend more than a quarter of their income treating a
single disease. The physical disease is terrible and then you have to
figure out how to deal with the economic fallout associated with paying
to treat it."
"Out-of-pocket spending and financial burden among
Medicare beneficiaries with cancer" was written by Amol K. Narang and
Lauren Hersch Nicholas.
The study was supported by a grant from the National Institute on Aging.