Despite the Rhetoric, Cancer Care Costs Keep Skyrocketing: Is There a Solution?

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The consequences of changing our practice habits will result in equal or better care and sustainable growth in our delivery system.

Thomas J. Smith, MD, FACP

Although health-care experts routinely agree that the rising costs of oncology services are untenable, there is disagreement about how to reduce expenditures without harming access and quality of care. At this year’s ASCO Annual Meeting, Thomas J. Smith, MD, FACP, offered some interesting ideas about how to bend the cancer care curve downward.1

Recognizing the Problem

According to Dr. Smith, to maintain our ability to deliver high-quality cancer care, the oncology community must begin bending the cost curve downward, and the first step is an honest recognition of the problem. “The costs of cancer care are rising at an unsustainable rate, and the quality and value of the care is often suboptimal,” said Dr. Smith.

Dr. Smith made the case that health care is often less than optimal with data from studies that looked at care patterns for patients with cancer. The findings he presented—such as inadequate use of hospice benefits, a lack of doctor-patient conversations about advance directives, and overuse of chemotherapy in the final weeks of life—are well documented in the literature, as is the disproportionate health-care spending in the United States compared with other Organisation for Economic Coordination and Development (OECD) nations. “We spend about $8,000 per person per year, nearly double the expenditures in Canada, which spends about $4,500 per person with equivalent or better national health-care outcomes than the United States,” said Dr. Smith.

Dr. Smith stated the hard facts: “Our yearly health-care budget is approaching $3 trillion, which is devouring our [gross domestic product]. Insurance premiums have doubled over the past decade, as have out-of-pocket patient costs. These unsustainable costs have resulted in 1 million health-related bankruptcies in the United States this year alone.”

Value Needs to Reflect Price

Balancing value vs the cost of drugs and services is rapidly becoming a central theme in the health-care narrative. Dr. Smith gave several examples in which cost has outstripped value. “Some of the workhorse oncology drugs that have real clinical value are priced relatively inexpensively. For instance, paclitaxel and trastuzumab [Herceptin] cost less than $5,000 per month; however, some of the newer drugs such as pemetrexed [Alimta] cost about twice that at $10,000 per month. And, in the extreme cases we have drugs such as sipuleucel T [Provenge], which cost almost $100,000 for one administration,” noted Dr. Smith, adding that data show that many of the newer drugs do not add enough clinical value to warrant the sticker-shock costs.

Dr. Smith stressed that most of the spending increases are well within our control. “Based on geographic variations, the congressional budget office (CBO) estimated that upward of 30% of clinical care is not evidence-based and does not add value for the patient. Things that oncologists do have control over are the use of imaging, chemotherapy selection, supportive care services, surveillance after curative care, proper and timely use of palliative care and hospice, and avoiding unnecessary therapy and hospitalization near the end of life,” said Dr. Smith.

Behavior Modification

As Dr. Smith pointed out, part of the rise in oncology costs is driven by physicians’ practice behavior, with respect to the underuse of cost-saving interventions such as palliative care and hospice, and overuse of unwarranted services and therapies. Palliative care and hospice actually improve the quality of care, at an affordable cost. And some of the most expensive treatments are no better than things they replace; for instance, Memorial Sloan-Kettering Cancer Center just elected to not cover ziv-aflibercept (Zaltrap), which costs twice as much as the comparison drug. In an effort to curb unnecessary spending, ASCO has joined the American Board of Internal Medicine in the “Choosing Wisely” campaign, which encourages medical groups to select five areas in which they can improve care and reduce costs.

Dr. Smith highlighted the ground rules for the campaign. “Everything is on the table for discussion. We need to accept data where it exists, curative and adjuvant care along with clinical trials are always exempt, and perhaps most importantly, we need to recognize that this is going to be painful,” he said.

“For instance, “ he continued, “supportive care and chemotherapy administration represent a main source of an oncologist’s income, so modifying certain practice methods to save money will ultimately reduce practice revenue—painful but necessary. Also, patients with cancer are a hefty source of hospital income; reducing hospital days will affect the institution’s bottom line.”

Another bridge to cross is the initiation of comprehensive discussions about death and medical costs, subjects that both doctors and patients traditionally shy away from. “These discussions have been shown to save money and add to a patient’s quality of life,” said Dr. Smith.

Targeting Overvalued Treatment

“The first area we targeted was aligning surveillance procedures to patients who were most likely to derive benefit. For instance, in 1990 we spent at least $1 billion in breast cancer screening [for recurrence]. Today that number is several billion dollars. However, the ASCO and National Comprehensive Cancer Network (NCCN) guidelines agree that in the absence of symptoms, there is no evidence that CEA, CA 27-29, positron-emission tomography, computed tomography, and bone scans have any value as screening tools to follow women,” said Dr. Smith.

He emphasized that screening guidelines can be reviewed in less than 10 minutes, giving doctors the opportunity to explain to their patients that these expensive screening methods have no guideline-proven benefits for their breast health. “Instead, we should stress breast care that is effective, such as timely mammograms and maintaining a healthy lifestyle. The solutions that we proposed are that payers simply should not reimburse for these tests and the ASCO Quality Oncology Practice Initiative (QOPI) committee should audit for overuse,” said Dr. Smith.

Another recommendation was to only use sequential or monotherapies in the second-line setting or later metastatic treatments. Dr. Smith explained why this approach was important. “Patients will live just as long, and they will avoid unnecessary toxicity. This will result in fewer supportive care costs, fewer hospitalizations, and will ultimately lower oncology costs. Naturally, this approach requires honest discussions about goals of care.”

Dr. Smith remarked that it is also important to limit active therapy to patients with good performance status. “A good screening question to ask is, ‘Did this patient walk unaided to the clinic?’ If a patient’s ECOG performance status is 3 or 4, a discussion of prognosis and realistic treatment expectations should ensue,” noted Dr. Smith, adding that he and his colleague Bruce E. Hillner, MD, have written extensively about dose reductions that can obviate the need for granulocyte colony-stimulating factors (G-CSF) in solid tumors.

“The United States has 3% of the world’s population, but buys 75% of the world’s G-CSF. These drugs are essential when using certain types of chemotherapy, but we have not found any trial that shows better survival rates when using G-CSF in solid tumors,” said Dr. Smith.

One other “Choosing Wisely” recommendation was to switch to nonchemotherapy palliative care after the cancer grows through two or three regimens. “Using NSCLC as an example, we see that the use of chemotherapy after two or three regimens is toxic, expensive, rarely helpful, and prevents the planning for transitions to end-of-life care, such as timely entry into hospice,” said Dr. Smith.


Along with ASCO’s “Choosing Wisely” recommendations, Dr. Smith stressed that we need to change payment methods from those that incentivize overuse of testing and treatment to mechanisms that reward best practices.

“Under the current fee-for-service practice, oncologists derive more than 50% of their revenue from the drugs they prescribe. I think this system will face continued pressure to change,” said Dr. Smith. “One alternative is fixed provider payment systems (ie, salaried physicians), in which physicians will trade lower revenue streams for more secure incomes. It’s important to note that the Veterans Affairs systems have equivalent outcomes to private practices while working on a fixed budget. Moreover, as a community, we eventually need to see Medicare as a scarce resource, not a profit center.”

Dr. Smith said that the oncology community could provide actionable solutions to improve both quality and cost of care by using treatments based on evidence, better end-of-life care and coordination, more standardized practice methods, using clinical pathways, and more auditing with the intent of practice change. “The consequences of changing our practice habits will result in equal or better care and sustainable growth in our delivery system,” concluded Dr. Smith. ■

Disclosure: Dr. Smith reported no potential conflicts of interest.


1. Smith TJ: Reducing the costs of cancer care: Bending the curve and how. 2012 ASCO Annual Meeting. Education Session. Presented June 2, 2012.