Catastrophic Cancer Costs: The Impact and Solution

Angelique Neumann, RN Cancer Guides, COO & Director, ECAP

Aug 31, 2020

 In January of 2012, I was a 33 year old sales representative diagnosed with breast cancer. During the course of eleven months, I navigated through the process of a diagnosis, determined a treatment plan, struggled to exist while following that treatment plan, experienced the loss of a business mentor from cancer, coped with the difficulties of raising an incoming high school freshman girl, coordinated with a husband who traveled 75 percent of the time, suffered the loss of my mother-in-law from cancer, and I continued to work full time throughout my six surgeries and four months of chemotherapy. To say that I know cancer intimately would be an understatement. But what I didn't know at that time was that treating cancer is a business.

With all due respect, as a survivor I ask that for the remainder of this article we put aside the physical, emotional and financial impacts to the cancer patient themselves, their loved ones and caregivers. Instead, focus on the fact that in the business world cancer is everyone's business, whether we want it to be or not. From large corporations to small companies, business leaders understand that cancer is not only a health issue but also a core business issue.

Cancer care costs U.S. employers an estimated $264 billion in healthcare and lost productivity. [1] A study of major employers found that patients with cancer cost five times as much to insure as patients without cancer. [2] While the cost per member per month (pmpm) for health coverage in 2006 of people without cancer was $360, for people with cancer it was $2,390—and potentially more depending on the type of cancer, with the pmpm for breast cancer about $2,700, cervical cancer about $3,500 and lung cancer about $8,000. [3]

Now let us also reflect on the non-quantifiable impacts that employees who are either cancer patients or caregivers have on employer costs. Consider presenteeism, absenteeism, and an affected quantity and quality of work. Add to that work-related accidents, equipment breakage, errors in judgement as well as conflicts and interpersonal issues and you'll find an even greater expense than our best estimates can identify.

For many employers, reducing cancer expenditures by even half could result in dramatic annual savings.

There are now ways to do this! Many healthcare plans provide a Chronic Disease Management component in their coverage. This often includes over the phone consults with Registered Nurses and can help guide your employee with cancer to community resources, preferred pharmacies and in-network providers.

Another cost savings option is the use of onsite and/or offsite clinics. Utilizing contracted and often salaried providers can drastically reduce costs. Under this option your greatest cancer cost reduction is going to be the clinic's ability to coordinate care, make direct referrals to community resources, and provide diagnosis education. These clinics are a great beginning to the reduction of costs but they can be even more. They can influence their cancer population to engage in the best possible solution for containing catastrophic cancer costs…the Independent Case Management Organization.

A national employer with 167,000 members saw a 2.4 to 1 ROI in 2010, through specialized cancer case management. [4] These organizations are your greatest asset when it comes to containing cost. Using a high touch, specialty approach to case management is a proven method. You will find that the best of the best of these companies provide patients with their very own Oncology Certified Nurse who will meet with the patient and their family in their home as well as attend appointments. The cost savings to employers is provided through a variety of services included in their case management.

  • - Attendance at provider appointments provides the patient with an extra set of ears to later share pertinent information with caregivers and loved ones in an understandable and comprehensive format.
  • - With the support of their OCN (Oncology Certified Nurse) patients are empowered to share their own goals, priorities and focus with their team of providers. This ensures that treatment and pharmaceutical dollars aren't being misdirected to patients who don't wish to utilize them.
  • - In-home medication inventories ensure that prescriptions written due to protocol that are already on hand aren't refilled. They also manage the number of pain management prescriptions being filled. If a patient already has a comparable drug on hand why fill a new script?
  • - Treatment coordination amongst all providers ensures that testing and laboratory services are not being duplicated because results aren't on hand. How many times does a patient walk in to a new provider's office and a duplication of procedures occurs because the patient chart is lacking current medical records and patient data?
  • - Each patient's own OCN provides continued education about common and easily treatable side effects and illnesses at relevant times according to their treatment plan reducing Emergency Room visits and inpatient admissions.
  • - Patients contact their OCN first in times of concern. Their nurse has first-hand knowledge of the specific treatment plan and is up-to-date on most recent activities. Their sound medical insights can earlier identify major issues replacing costly ambulance services and inpatient procedures for more cost-effective scheduled outpatient techniques.
  • - Face-to-face education and constant interaction with their OCN creates a more compliant patient with better treatment outcomes.
  • - Since their OCN is established within their communities they are able to refer the patient to trusted and vetted community resources and providers.
  • - Armed with knowledge and expertise, the OCN can help guide patients to ask important questions regarding evidence-based treatments, alternative therapies and NCCN guidelines.
  • - An alternative for caregivers, attending appointments, preparing medical records, scheduling appointments and researching treatment options, alternative therapies, NCCN guidelines and best practices drastically reduces caregiver contributions to these catastrophic cancer costs.[5]

I'm going to go out on a limb here and say that if you're thinking, “Wow! That sounds expensive!” or “There's no way that can make an impact in my client's spending!”…you're wrong!

These models are priced based on utilization. If an employee with cancer opts not to utilize the service the employer pays nothing! Contrary to the dinosaur age when employers were being sold per employee per month (pepm) solutions that poorly engaged the employee population and wouldn't dare attempt to provide reporting that identifies ROI, these out-of-the-box solutions beg for utilization. Engaging with on and off site clinics and community providers, attending wellness fairs and providing video and email content to be disbursed to employees are a few strategies used by these organizations to identify their existence to the employee population. These programs put it all out there for the taking. The more patients they engage with, the larger the opportunity for savings, the better patient outcomes and the more successful the solution.

A recent case study performed by an Independent Oncology Case Management organization for a known healthcare insurer showed [6]:

  • - Out of 23 random charts provided, 16 insureds had a cancer diagnosis
  • - Of those 16 insureds, the case management engagement fee would average $7,050 per insured
  • - Chart reviews, bill scrubbing, medical records, soap and admission notes indicated potential claims savings of $262,709.00 with the assistance and interventions of an OCN
  • - A 133 percent ROI with approximate $150,000 gain

It's a fact that The American Society of Clinical Oncology (ASCO) estimates that by 2030 there will be an expected 2.3 million new cases of cancer EACH YEAR! [7] It's also a fact that cancer is the disease employees fear most and yet will touch 1 in 4 Americans in their lifetime. [8] It's been quoted that 25 percent of chemotherapy events do not meet NCCN guidelines. [9] And over the past decade, cancer drug prices  have drastically increased—going from $5,000 to $10,000 for a year's treatment before 2000, to more than $100,000 by 2012, according to a Mayo Clinic study.

Employers are already feeling the strain of cancer costs. Their healthcare expenses are skyrocketing, and every year these increases require business leaders to make tough decisions. While limiting provider networks, increasing health plan deductibles and cutting out optional benefits is the typical way to deal with these rising costs everyone knows employees don't benefit from them. Utilizing forward-thinking and out-of-the-box solutions, employers are now able to drastically reduce their cancer costs while at the same time providing their employees with support, assistance and knowledge. Today, we don't attempt to fight for our rights in a court of law by representing ourselves, we hire an attorney. Tomorrow, cancer patients will consider the fight for their literal lives and well- being in need of independent, objective guidance and representation as well.

Now employers can be a part of this radical movement, proud of what this declares to their employees, proud of what it allows them to re-invest in their businesses.


[1] Cancer Facts and Figures. (2012). American Cancer Society.

[2] Barnett A, Birnbaum H, Cremieux P, Fendrick AM, Slavin M. The Costs of Cancer to a Major Employer in the  United States: A Case-Control Analysis. Am J Manag Care. 2000;6(11):1243-1251.

[3] Pyenson B, Zenner PA. Cancer Screening: Payer Cost/Benefit Thru Employee Benefits Programs.

[4] Optum internal analytics, 2011.

[5] RN Cancer Guides. (2015) Employee Services Outline.

[6] RN Cancer Guides. (2015) ECAP (Employee Cancer Assistance Program) Catalogue: Case Study.

[7] Cancer Facts and Figures. (2013) American Cancer Society.

[8] Peyenson, B., Cost of Cancer to Employers, Milliman, American Cancer Society, C-Change 2007.

[9] Optum internal analytics, 2011.