Obtaining Long-Term Disease Specific Costs of Care

OBJECTIVES: This study develops estimates of long-term, cancer-related treatment cost using a modeling approach and data from the SEER-Medicare linked database. The method is demonstrated for colorectal cancer. METHODS: Data on Medicare payments were obtained for colorectal cancer patients for the years 1990 to 1994 from the SEER-Medicare linked database. Claims payment data for control subjects were obtained for Medicare enrollees without cancer residing in the same areas as patients. Estimates of long-term cost (< or = 25 years following the date of diagnosis) were obtained by combining treatment/phase-specific cost estimates with estimates of long-term survival from SEER. Treatment phases were defined as initial care, terminal care, and continuing care. Cancer-related estimates for each phase were obtained by subtracting costs for control subjects from the observed costs for cancer patients, matching on age group, gender, and registry area. Estimates of long-term cost < or = 11 years obtained by this method were compared with 11-year estimates obtained by application of the Kaplan-Meier sample average (KMSA) method. RESULTS: The mean initial-phase cancer-related cost was approximately 18, 000 but was higher among patients with more advanced cancer. The mean continuing-phase cancer-related cost was 1, 500 per year and declined with increasing age, but was higher on an annual basis among persons with later stages of cancer and shorter survival time. The mean terminal-phase cancer-related cost was 15, 000 and declined with both age at death and more advanced stage at diagnosis. After the phase-specific estimates were combined, the average long-term cancer-related cost was 33, 700 (31, 300 at 3% discount rate) for colon cancer compared with 36, 500 (33, 800 at 3% discount rate) for cancer of the rectum. This represented about half of the total long-term cost for Medicare enrollees diagnosed with this disease. Long-term cost was highest for Stage III cancer and lowest for in situ cancer. Eleven-year cancer-related costs estimated by the KMSA method were similar to estimates using the phase-based approach. CONCLUSIONS: This paper demonstrates that valid estimates of cancer-related long-term cost can be obtained from administrative claims data linked to incidence cancer registry data.