Cancer patients shouldn’t be responsible for out-of-pocket costs

In 2023, just under 2 million Americans will be diagnosed with cancer. Many will endure multiple CT and MRI studies and intensive medical care, including surgery, radiation, chemotherapy, or immunotherapy. Fortunately, advances in treatment and novel therapies have steadily improved survival following a cancer diagnosis. Cancer death rates have declined by 27% over the past 20 years.

Unfortunately, many American cancer patients also face an unexpected adverse effect: financial toxicity. The costs of cancer are literally killing patients. But there is a clear solution. Patients diagnosed with cancer should not be responsible for any deductibles, copays, or other cost-sharing.

Financial toxicity is the economic burden patients experience from the costs related to getting treatment for their cancer. Cancer care is expensive. By one 2020 estimate, the average cost of medical care and drugs is more than $42,000 in the year following a cancer diagnosis. To complicate matters, up to 85% of cancer patients leave the workforce during their initial treatment. Consequently, more than 40% of patients spend their entire life savings in the first two years of treatment, while roughly 30% of Americans with a cancer history report having had problems paying their medical bills, having to borrow money, or filing for bankruptcy protection because of their cancer. In addition, informal caregivers, often family members, also experience out-of-pocket and opportunity costs, estimated to be upwards of several thousand dollars per month.

As I have seen firsthand as an oncologist, financial toxicity significantly affects patient behavior and outcomes. Over a quarter of cancer patients delay medical care, go without care, or make changes in their cancer treatment because of cost. To afford their cancer treatments, many patients also cut back on food, utilities, and other necessities. Not surprisingly, patients experiencing financial toxicity report higher levels of anxiety and depression. In one study, cancer patients who declared bankruptcy (particularly those with common colon and prostate cancer) had a nearly 80% greater mortality risk than those who did not. Importantly, the higher mortality was not because the patients with financial toxicity had more advanced cancers — they had the same curable cancers and received the same treatments. Much of this financial toxicity, which is increasingly common, is occurring for patients with health insurance coverage.

One reason for this is higher health care prices, particularly for hospital care and cancer chemotherapies. Another is employers’ increasing reliance on high-deductible health plans, as well as health plans with high coinsurance and copayment rates, that make cancer patients shoulder more and more of ever greater costs of their care, especially for specialty drugs. This model makes no sense — financially or medically.

The purpose of health insurance coverage is to ensure that people who get sick can obtain the health care they need without worrying about costs or delaying care. Deductibles, copayments, and coinsurance are meant to ensure patients have “skin in the game.” These costs are intended to discourage what is called “moral hazard” — by raising costs, out-of-pocket payments are meant to disincentivize the use of unnecessary, inefficient, or discretionary medical services. The aim is to make a healthy person think twice before requesting a costly MRI for lower back pain that is not medically indicated or opting for the more expensive of two equally effective drugs. But such insurance plan structures are illogical and wrong for a person diagnosed with cancer for whom an unexpected, high volume of expensive medical services is necessary for survival.

More importantly, a growing body of research shows that when patients with serious illnesses confront high deductibles and high cost-sharing, they make irrational decisions that are detrimental to their health. Yes, they reduce discretionary treatments, but the high prices induce them to forego preventive tests, vaccination, potentially life-saving medications, and other much-needed health care services. A recent study found that women enrolled in high deductible health plans experienced delays in breast biopsies, early-stage breast cancer diagnoses, and chemotherapy initiation compared with similar women in low-deductible health plans.

How we pay for care should reflect our values — and that includes our health insurance system. None of us want a society in which financial toxicity prevents cancer patients from care that can save their lives or make them healthier.

Financial toxicity is uniquely American. Cancer patients in other countries do not experience this side effect. For instance, Germany limits the out-of-pocket costs for chronically ill patients to 1% of their income. In Norway, patients are responsible for a maximum of $281 for out-of-pocket payments annually, and then they are exempt from any copays or other costs. In Canada, patients can see any primary care physician and any referred specialist with no cost sharing, and there is no copay for hospitalizations.

The practices in other countries make one solution to financial toxicity pretty clear. The U.S. should require that once a person is diagnosed with cancer, private insurance companies and the Medicare program eliminate any deductibles, copayments, coinsurance, and other types of cost sharing for their cancer treatments. It would be as if a cancer diagnosis made patients instantly hit their “out-of-pocket maximum.”

There must be safeguards to prevent abuse. Patients should receive only evidence-based treatment, and doctors should choose the most cost-effective treatment option. For instance, cancer patients with bone metastases could be treated with denosumab, a monoclonal antibody, but the cost sharing should only be eliminated for the equally effective Zometa, which costs approximately $24,000 less per year for each patient. Similarly, cost sharing should be eliminated for patients with prostate cancer when they receive regular radiation but not for the much more expensive proton beam treatments. But this cost accountability should rest with the cancer doctors who make the testing and treatment recommendations, rather than the patient.

Even within the U.S., there is precedent for eliminating patient out-of-pocket costs that dissuade patient from receiving effective health care services. As part of the Affordable Care Act, cost sharing was eliminated for preventive and other services identified by the U.S. Preventive Services Task Force as being highly effective, such as colonoscopies, and prescription contraceptives. (A district judge in Texas recently declared this unconstitutional, but the Circuit Court prevented the decision from going into effect, and the district court decision is unlikely to stand.)

Greater physician financial accountability has precedent, too. Under value-based programs, physicians’ financial incentives are tied to the quality of care that patients receive, with the underlying goals of improving population health and reducing spending. If physicians opt to recommend unnecessary services or more expensive treatments when there is an equally good one that is lower cost, they should face financial penalties. For instance, for patients with prostate cancer, radiation oncologists and radiation facilities should receive the same reimbursement regardless of whether they administer proton beam, stereotactic body radiation therapy (CyberKnife), intensity-modulated radiation therapy, or seeds (brachytherapy). Similarly, when there are multiple National Comprehensive Cancer Network-approved chemotherapy treatments of equal efficacy for a particular cancer, oncologists should receive the payment for the lowest cost option regardless of the regimen they administer.

This policy would not be cost-prohibitive. It is calculated that all American cancer patients, including survivors long after they received their cancer treatments, pay about $16 billion in out-of-pocket costs for their cancer care, or about 8% of all costs for cancer care. A policy of no deductibles, copays, or coinsurance for cancer — especially if focused on the year after initial diagnosis, which is when patients’ costs are highest — should run considerably less, about $2,500 per person or $5 billion annually, roughly 2.5% of total cancer spending. It is a very reasonable cost for insurers and Medicare to absorb. And if physicians are paid for adopting the lowest cost, most effective treatments, this is likely to induce a concomitant behavior change in the tests and treatments they order, leading to some savings for payers, too.

Why single out cancer over other conditions? While eliminating cost sharing for all chronic illnesses that require expensive treatments over extended periods would be the best policy, this is unlikely to happen, given the U.S. political climate. Disease-by-disease changes to policy are not optimal and I have argued against them. Nevertheless, historically this is the American way — witness $35 insulin for diabetes. Hence, cancer is a good place to start because many more cancer patients face financial toxicities and bankruptcies than patients with other conditions.

In 2022, the United States celebrated the 50^th anniversary of the National Cancer Act and the war on cancer. It took decades, but those initiatives produced the remarkable innovations in detection and treatment that have led to today’s improved cancer survival and reductions in mortality rates in the United States. Now, it is critically important for the United States to address the growing financial toxicity that too often accompanies potentially lifesaving cancer tests and treatments, to ensure patients’ focus can remain on cure — not cost.

Ezekiel J. Emanuel is an oncologist, vice provost for global initiatives, co-director of the Health Care Transformation Institute at the University of Pennsylvania, and author of several books, most recently “Which Country Has the World’s Best Health Care?” (Public Affairs Books, 2020).