OBJECTIVES: As the US healthcare system transitions from one of volume based delivery to one focused on quality and value there is a continued focus on understanding the drivers of cost, especially in oncology. Cancer drug costs have been a focus of much debate and this study analyzes real world data from two large volume cancer centers in the US to quantify drivers of cancer treatment costs.

METHODS: Integra Connect utilized Medicare claims data from two large cancer treatment centers in the US with over 60,000 cancer patients treated in the last 12 months. Overall treatment costs were categorized into 9 cost buckets (including Part B drug costs, Part D drug costs, Inpatient, E&M, Lab testing, Imaging, Emergency visits, etc.). Treatment costs were based on amounts paid by CMS from July 2016 through August 2016. Secondary research included a review of previously published studies on cost drivers of cancer care for comparison to current results.

RESULTS: Our research found that prescription drug costs from both Part B and Part D paid Medicare claims accounted for 47% (site 1) and 51% (site 2) of total cancer treatment costs. Second to cancer treatment costs, inpatient hospitalization related costs accounted for 20% (site 1) and 17% (site 2) of overall costs.

CONCLUSIONS: These results contrast previously published research that found cancer drug costs to be a smaller proportion of overall treatment costs (18% of overall costs attributed to chemotherapy and other cancer drugs) “Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data 2004-2014”, Milliman