6:18 pm - Monday September 25, 2017

High Cancer Spending Pays Off — Literally

British prostate-cancer patients just received a rare bit of good

news. The country’s government-run healthcare system announced that it
would pay for a drug known as Abiraterone, an innovative new treatment
for the disease that can extend life for several months.

But they almost weren’t so lucky. The National Institute for Health
and Clinical Excellence (NICE), Britain’s health rationing board,
initially ruled in February against paying for the treatment. The
decision had nothing to do with the drug’s health benefits, which the
regulators admitted were real. Instead, they said that it cost too
much.

Of course, the nearly $4,800-a-month drug has been available in the
United States for more than a year.

America undoubtedly spends more on cancer treatments like these than
other countries. But the data are increasingly showing that the money
we spend on cancer treatment is worth it.

Greater levels of spending on cancer treatment correspond with longer
lives. In a recent issue of Health Affairs, University of Chicago
health economist Tomas Philipson and several co-authors compared
cancer spending in the United States with spending in 10 European
countries between 1983 and 1999.

Those diagnosed with cancer in countries that spent more had longer
life expectancies. Slovakia, which spent $39 per capita on cancer
treatment, averaged a little more than five years of life expectancy
following cancer diagnosis. Sweden spent $134 per capita and showed
life expectancy of 9.9 years.

The United States spent more than any other country — $207 per
capita. Yet it also exhibited the longest life expectancy following
diagnosis. On average, patients in the United States lived 10.8 years
after finding out they had cancer.

America isn’t just delaying cancer death. It’s beating the disease
back. Cancer mortality rates in the United States during the study
period dropped faster than those in Europe.

The extra spending in the United States produced better results
because it paid for more intense, more aggressive treatment — and
better medical technology. U.S. cancer patients had more rapid access
to new drugs. More aggressive screening and early detection efforts
for those at risk for breast and prostate cancer also played a role in
Americans’ longer life expectancy.

Despite data like these, the World Health Organization (WHO) has
ranked the U.S. healthcare system 37th worldwide. Of course, WHO
attributes 25 percent of its ranking to “health distribution,” which
assigns more importance to treating everyone equally than treating
them well. In other words, a nation where everyone is treated poorly
would do well on the WHO’s scale.

U.S. cancer patients don’t just live longer. The economic gains
associated with increases in life expectancy were actually greater
than the costs of treatment.

Researchers have estimated the statistical value of a life for a
worker in his prime to be between $5 million and $12 million. When the
study’s authors compared the extra costs incurred by the United States
as a result of cancer care to the statistical value of the lives
saved, they found an average net gain of about $61,000.

Spread across the entire population, the total economic gain was $598
billion over the study period. That averages to about $43 billion in
economic activity gained each year just from keeping people alive.

America’s decision to spend more on cancer care, in other words, has
made it healthier and wealthier. Stingy European countries have lost
lives and economic value by comparison.

Not only is spending more on cancer care a clear win-win for patient
health and the overall economy. It’s also what Americans want.

A separate study in the Health Affairs symposium by Sean Seabury of
the RAND Corporation and coauthors surveyed 4,800 patients and found
that, on average, those patients valued metastatic cancer treatments
at 24 times more than their cost.

That’s much higher than the values typically assumed by cost-benefit
calculations. The study concluded that colorectal cancer patients
“placed a greater value on survival than has previously been
recognized by health care regulators and payers.”

Should we really be surprised? This may be news to the bureaucrats
trying to force rationing on unwilling Americans, but it’s no shocker
to the rest of us. People want to live — and they’re willing to pay
great sums to do so. We’re all better off for it.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care
Studies at the Pacific Research Institute. Her latest book is The
Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare

 

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