'Real Crisis': Ruinous Out-of-Pocket Costs for Blood Cancers

Pam Harrison

November 05, 2019

Out-of-pocket costs are so high for Medicare patients diagnosed with a blood cancer that almost 60% of them do not start treatment within 3 months of their diagnosis ― if they start it at all. The findings come from a new report commissioned by the Leukemia & Lymphoma Society.

"It's a real crisis when patients don't initiate their treatment in a timely way," Brian Connell, executive director of federal affairs at the Leukemia & Lymphoma Society, told Medscape Medical News.

"Some of these cancers are very aggressive, so when we have patients who delay treatment extensively by many months — or not start treatment at all — that is a real crisis for many patients making that decision, because it will have a major impact on their ability to survive that cancer diagnosis," he emphasized.

For example, some Medicare patients diagnosed with lymphoma who receive treatment through infusions have to pay more than $19,000 in their first year of treatment.

For others with acute leukemia, out-of-pocket costs are in excess of $16,000 for the first year of treatment.

After 2 years, patients with multiple myeloma can incur cumulative out-of-pocket costs of almost $24,000.

Among all hematologic malignancies, cumulative out-of-pocket costs are lowest for treatment of chronic leukemia, although after 3 years, patients still have to pay, on average, $15,000, the researchers note.

"This is unsustainable for the vast majority of Medicare patients," Connell said.

"And when costs are this high, it's no surprise that people are unable to begin cancer treatment," he emphasized.

The report is entitled The Cost Burden of Blood Cancer Care in Medicare and was published online October 21 by Milliman.

Blood Cancers More Expensive to Treat

Connell noted that hematologic malignancies are more expensive to treat than many solid tumors because they require a different treatment approach.

"Firstly, treatment of blood cancers is prolonged, so we have a lot of treatments that are turning a life-threatening condition into a chronic condition — which is good news for you as a patient, but it means that you are going to face those costs year after year after year," he explained.

Secondly, many new drugs that target blood cancers have been developed in recent years — "so you have a lot of new drugs for a small population, and they come with an extraordinary price tag," Connell observed.

Putting these factors together, "you end up with prohibitive costs to the system, and Medicare is really designed to push many of these costs onto patients, because patients are paying coinsurance and their out-of-pocket costs are being driven by the underlying cost of therapy," he said.

Financial Burden on Patients

Solutions rest on policy makers to redress the terrible financial burden for Medicare patients.

Firstly, they have to solve the broader question of the overall cost of treating hematologic malignancies that Medicare incurs on behalf of patients, Connell suggested.

"At the same time, we also need policy makers to lower costs that patients pay, because if we lower the cost of a drug from $100,000 to $50,000 and the patient is still paying 30% of the cost, that's still not affordable for the vast majority of patients, even though it's a big savings for the system," he noted.

Connell also noted that the median income for most people on Medicare is about $26,000 a year.

"So if you are facing a cost of $19,000 for just one drug to treat your cancer in just 1 year, you get a sense of what that leaves for every other need in life, let alone every other healthcare cost," he underscored.

On the plus side of the ledger, Connell noted that both the US House of Representatives and the Senate are currently debating these issues, and he is optimistic they will adopt some form of cap on out-of-pocket costs so that Medicare patients will pay between $2000 and $3100 in total for their cancer care.

"This would be a vast improvement for our patients, so we are actively pushing for this policy and are trying to make it the most friendly policy possible for patients so they have reasonable and predictable copays for the drugs they need," Connell observed.

Healthcare Costs

For the study, researchers analyzed the healthcare costs incurred by Medicare beneficiaries who were newly diagnosed with blood cancer, including acute leukemia, chronic leukemia, lymphoma, multiple myeloma, and bone marrow disorders.

They then calculated total healthcare expenditures from the month of diagnosis to 3 years following it.

The researchers also calculated total allowed spending — namely, the amount paid by Medicare and the patient combined — as well as the patient's total out-of-pocket costs for all medical and prescription drug services.

Out-of-pocket costs were then tallied for fee-for-service (FFS) beneficiaries and for proprietary Medicare Advantage members with Part D coverage (MAPD).

Key findings on the total allowed spending for these two Medicare populations include the following:

  • For actively treated patients, the average allowed spending incurred during the 2 years following diagnosis was $200,409 for each FFS patient and $165,967 for each MAPD patient.

  • The average allowed cost for FFS in year 1 was almost two times higher than the costs incurred in year 2, at $131,406 for each FFS patient in year 1 and $114,751 for each MAPD patient in year 1.

  • The total amount spent varied considerably by cancer diagnosis. The highest costs, which were for treatment of acute leukemia, were $309,408 during the first 2 years for FFS patients and $255,652 for MAPD patients.

  • The lowest costs, which were for treatment of chronic leukemia, were $189,143 for FFS patients and $147,372 for MAPD patients.

"Blood cancer allowed spending is driven by anticancer drug therapy," the authors comment.

For example, among both FFS and MAPD Medicare populations who receive treatment within the first 90 days of their diagnosis, anticancer drug therapy contributed to more than half of the average allowed spending in the first year following the diagnosis.

For patients who were actively treated, the average out-of-pocket cost for the first year was $17,084 for FFS patients; in year 2, the cost was $8205.

For MAPD patients, 1- and 2-year out-of-pocket costs were lower, at $6896 and $2603, respectively.

The authors explain that under a Medicare Advantage plan, beneficiaries have an out-of-pocket cost-sharing cap for certain medical services.

No such out-of-pocket cap exists for FFS beneficiaries, which explains the difference in costs incurred by the two Medicare member groups.

Support for the report was obtained from Genentech, Biogen, Pharmacyclics, Janssen Biotech, and Takeda Oncology.

Milliman. Published online October 21, 2019. Full text

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