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Cancer Care Spending in California: What Medicare Data Say

Deborah Schrag, Harvard Medical School / Dana-Farber Cancer Institute

Nearly 135,000 Californians are diagnosed with cancer each year, yet little is known about how much is spent on their treatment. Medicare spending estimates profile the top four cancers in the state.

This report provides Medicare spending estimates for the four cancers with the largest incidence in California: breast, prostate, lung, and colorectal cancer. Together these cancers account for half of all cancer diagnosed in the state and 40% of all deaths. This analysis focuses on the first year of diagnosis and the last year of life, periods where oncology spending tends to be concentrated.

With this report, California health care leaders and policymakers are provided with a baseline of cancer care spending for Medicare fee-for-service patients in the state for the first time. At the same time, the report underscores the need for additional data linkages and access to data to gain a more complete understanding of the financial burden of non-Medicare oncology care in this state.

Key findings in the initial year following a cancer diagnosis:

  • More was spent on cancers with the lowest survival rates.
  • Late-stage diagnosis was associated with higher treatment costs.
  • Medicare spending varied by race/ethnicity, with African Americans typically having the highest annual spending and whites having the lowest.
  • Medicare oncology spending varied across California regions. Los Angeles County had the highest mean spending of all regions for all four cancers examined.

Key findings in the last year of life:

  • Average spending per person ranged from a low of $68,000 for breast cancer patients to $82,000 for colorectal patients.
  • Approximately half of Medicare spending occurred in the final three months before death.
  • Spending was concentrated in the inpatient setting, with little spending on hospice care.

Researchers also developed estimates of the cost of inpatient care in California using California Office of Statewide Health Planning and Development (OSHPD) data linked to California Cancer Registry (CCR) data. An initial examination of the data indicate that inpatient oncology care for Californians is expensive, hospital treatment for some cancers costs more than for others, costs at the end of life are especially high, and costs are similar for younger and older patients in the initial year of treatment, but are consistently higher for younger patients at the end of life. As there is ample room for further research on these topics, CHCF has made the CCR-OSHPD linked data files available under Document Downloads.

The full report on Medicare cancer spending, as well as white papers detailing the methods used for these analyses, is available under Document Downloads.

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