Why cancer care costs are expected to rise by 2030

Over the past several decades, cancer has represented a significant driver of rising national health care costs, and this is expected to hold true for the foreseeable future. According to a  study published last week in Cancer Epidemiology, Biomarkers & Prevention, the annual costs for cancer-related medical services and drugs are projected to total nearly $246 billion nationally in 2030. This figure corresponds to a 34% increase in national costs since 2015.

The study's 2030 cost projections are based on the impact of population changes alone on estimated 2015 costs. These findings build on the authors' prior research published in 2011 that projected national costs of cancer care would range between $173 billion and $207 billion in 2020.

While an aging U.S. population is a major contributor to the rising cost of cancer care, other factors like the development of innovative cancer therapies are also driving the growth in expenditures.

Another finding emphasized in the study is that the costs of cancer care are highest among patients diagnosed with more advanced disease. This finding, while not surprising, demonstrates the imperative of cancer prevention and early detection as keys to controlling cancer care costs and improving clinical outcomes. Indeed, other research has attempted to quantify the impact of cancer screenings on cost, including a  2017 study that estimated $26 billion in national cost-savings from early cancer diagnosis.

Read the AACR's summary of additional study findings in its news release.

How the Covid-19 epidemic is impacting cancer-specific payment reform

As cancer care costs continue to rise, employers and payers are exploring multiple ways to try to control their oncology spend. To that end, many have experimented with alternative payment models that reward "value" over volume. The most prominent of these initiatives is the Oncology Care Model (OCM), which was slated to be replaced by the Oncology Care First (OCF) model in 2021.

CMS had long faced pressure to make changes to a variety of its value-based payment models, including the OCM. However, as the new coronavirus epidemic took hold in the United States, evidence suggested that Covid-19 would disproportionately impact some OCM practices, and immediate adjustments would likely be necessary. Ultimately, the unprecedented disruption caused by the Covid-19 public health emergency (PHE) prompted the CMS' Center for Medicare and Medicaid Innovation (CMMI) to announce sweeping adjustments to its value-based payment models earlier this month, including extending the OCM through June 2022.

CMMI also adjusted the financial methodology and quality reporting requirements to attempt to mitigate the added burden that the epidemic has placed on OCM participants. These changes, as of the announcement on June 3, 2020, are outlined in the table below.

Though CMS' report did not mention the OCF, we assume that its start will also be delayed by a year. CMS noted that it may make additional adjustments to these models as the epidemic continues to evolve.

These adjustments to the OCM are particularly relevant given that cancer patients are at a higher risk of complications and mortality due to Covid-19, all while the cost of cancer care continues to be a leading expenditure in our health care system.