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Who’s Really Paying for Your Cancer Treatment? Two Analyses Look at Climbing Costs

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A surprising new analysis finds the cost of treating cancer has nearly doubled over the past two decades and the amount of costs picked up by insurance companies and Medicaid have increased. But not everyone agrees with the analysis.

Cutting-edge technology and pricey drugs might seem like key reasons for the dramatic cost increase, but according to the analysis published online in CANCER the peer-review journal of the American Cancer Society, the sheer number of newly-diagnosed cancer cases plays a larger role.

Researchers at the Centers for Disease Control and Prevention compared medical costs of cancer treatment during the late 1980s to those same expenses from 2001 to 2005.

Florence Tangka of the U.S. Centers for Disease Control and Prevention, the analysis’ lead author, said the U.S. population is aging and older people tend of get cancer at a higher rate.

Overall, they found the cost of treating cancer, when adjusted for inflation, went from $24.7 billion in 1987 to $48.1 billion in 2005.

As of 2005, insurers picked up the tab for about half of all cancer treatment costs, compared to 42 percent in 1987, the study said. Medicare picked up 34 percent of payments compared to 33 percent in 1987. Medicaid payments tripled to three percent.

However two funding sources paid less in 2005, according to the study. Out-of-pocket costs went down from 17 percent to 8 percent, and other public sources declined by two percent.

The analysis also revealed that much of the cost of treating cancer patients have shifted away from inpatient treatments to outpatient care. A lot less cancer care requires patients to be hospitalized, so the share of inpatient hospital admissions fell from 64.4 percent in 1987 to 27.5 percent in 2001-2005. The change meant actual spending on inpatient care dropped to $13.2 billion from $15.9 billion (in constant dollars).

The shift to outpatient care has apparently helped blunt the increase cost of some treatments, including pricey drugs.

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