Center to Reduce Cancer 

Health Disparities (CRCHD)

SUMMARY OF MEETING PROCEEDINGS

Economic Costs 

of Cancer Health 

Disparities

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

National Institutes of Health
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 3

Acknowledgements 

The analysis and recommendations presented in this report represent a synthesis 

of the fi ndings of a Think Tank meeting convened by the NCI Center to Reduce 

Cancer Health Disparities. We wish to acknowledge and thank the following 

people for their commitment, hard work, and assistance in the development of 

this report.

Editor

Emmanuel A. Taylor, Dr.P.H.

Health Scientist Administrator

Center Staff Involved in Program Development

Nadarajen A. Vydelingum, Ph.D.

Deputy Director

Barbara K. Wingrove, M.P.H.

Chief, Health Policy Branch

Emmanuel A. Taylor, Dr.P.H.

Health Scientist Administrator

Participants

Economic Costs of Cancer Health Disparities Think Tank

December 6-7, 2004, Bethesda, MD: Appendix A

Special Acknowledgements

Martin Brown, Ph.D., Joseph Lipscomb, Ph.D., and Scott Ramsey, M.D., Ph.D. 

for their expert consultation on the drafts and suggestions for revision of the 

fi nal report, in addition to their participation as members of the December, 2004 

Think Tank.

Manuscript Preparation (NCI Contract No. 263-FQ-513547)

Sujha Subramanian, Ph.D.

Shahnaz Khan, M.P.H.

RTI International 

Planning and Logistical Support

NOVA Research Company (NCI Contract No. N02-CO-34222)
4 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 1 INTRODUCTION

 1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

 1.2 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

 1.3 Think Tank Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

 1.4 Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 2: OVERVIEW

 2.1 Defi nition of Disparity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

 2.2 Determinants of Disparities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

 Factors Within the Health Care Delivery System . . . . . . . . . . . . . . . . . . 14

 Factors External to the Health Care Delivery System . . . . . . . . . . . . . . . 15

 2.3 Screening, Diagnosis, and Treatment Disparities: the 

 Cancer Care Continuum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SECTION 3: TOTAL COST OF CANCER CARE

 3.1 Overview of Cost Domains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

 3.2 Overall Cost of Cancer Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

 Direct Health Care Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

 Time Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

 Employment Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

 3.3 Data Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 4: ECONOMIC BENEFITS OF REDUCING CANCER HEALTH DISPARITIES

 4.1 Benefi ts of Reducing Cancer Health Disparities . . . . . . . . . . . . . . . . . . . 27

 4.2 Measuring the Value of Reducing Disparities . . . . . . . . . . . . . . . . . . . . . 28

 Estimating Mortality, Morbidity, and HRQL Impacts . . . . . . . . . . . . . . . . 28

 Estimating Economic Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 5: BENEFITS AND COSTS OF POLICIES TO REDUCE CANCER 

HEALTH DISPARITIES

 5.1 Why Economics Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

 Comparing Cost and Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

 Budget Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

 5.2 Importance of Perspective in Economic Assessment . . . . . . . . . . . . . . 34

 5.3 Calculating Incremental Cost-Effectiveness Ratio . . . . . . . . . . . . . . . . . 35

 5.4 Characteristics of Potentially Cost-Effective Interventions . . . . . . . . . 35

 5.5 Provider Incentives and Barriers to Change . . . . . . . . . . . . . . . . . . . . . . 35

SECTION 6: RECOMMENDATIONS AND RESEARCH AGENDA

 6.1 Research Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

 6.2 Policy Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

APPENDIX A: PARTICIPANT LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

APPENDIX B: ECONOMIC COSTS — DISCUSSION QUESTIONS . . . . . . . . . . . . . 52

APPENDIX C: ECONOMIC COSTS — BACKGROUND PAPER . . . . . . . . . . . . . . . . 54

APPENDIX D: AGENDA AND MEETING PRESENTATIONS . . . . . . . . . . . . . . . . . . . 70

TABLE OF 

CONTENTS
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 5

LIST OF FIGURES

 Figure 1: Ratio of the Probability of Diagnosis of Cancer at 

 Late Stage, Uninsured Compared with Insured, 1994 . . . . . . . . . . . 14

 Figure 2: Causes of Cancer Health Disparities . . . . . . . . . . . . . . . . . . . . . . . . . 15

 Figure 3: U.S. Cervical Cancer Mortality by Race 

 and Poverty Level, 1996-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

 Figure 4: Critical Disconnect Between Research/Discovery 

 and Delivery of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 Figure 5: Cancer Care Continuum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 Figure 6: Treatment Cost and Survival: Breast Cancer . . . . . . . . . . . . . . . . . . 21

 Figure 7: Framework for Assessing Economic Costs of 

 Cancer Health Disparities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

 Figure 8: Cost Effectiveness Plane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

 Appendix Figure C-1: Causes of Health Disparities . . . . . . . . . . . . . . . . . . . . . 56

 Appendix Figure C-2: The Cancer Care Continuum . . . . . . . . . . . . . . . . . . . . . 58

 Appendix Figure C-3: Types of Health Care Costs . . . . . . . . . . . . . . . . . . . . . . 62

LIST OF TABLES

 Table 1: Specifi c Cost Elements Required for Measuring 

 Total Cost of Cancer Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

 Table 2: Cancer-Related Treatment Cost of Colorectal Cancer . . . . . . . . . . . 22

 Table 3: Estimates of Direct Costs for Cancer 

 Based on SEER Medicare Data, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . 22

 Table 4: Time Costs Related to Colorectal Cancer Treatment: 

 Difference in Cost for Cases Versus Controls (Net Costs) . . . . . . . . 22

 Table 5: Comparison of CEA, CBA and CUA . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Foreword

Why examine the cost of cancer health disparities? Disparities in cancer care and outcomes result in both 

economic and human costs. Public policy approaches to eliminate cancer-related disparities require an 

understanding of these costs to fi nd appropriate balances between the actual dollars spent and the potential value to American society. For these reasons, understanding the costs associated with these disparities 

is vital to the work of the National Cancer Institute (NCI) Center to Reduce Cancer Health Disparities. 

This fi rst NCI Think Tank on the economic costs of cancer health disparities was an important step in 

exploring these issues.

Considerations of the cost of cancer health disparities often focus principally on the expenditures associated with eliminating existing disparities. However, current disparities have an ongoing cost that is less 

well recognized. Specifi cally, all people with cancer in America eventually receive care, since severely 

symptomatic patients seldom are denied hospital care. But if treatment is ineffective because the disease 

already is advanced, the associated costs likely will be higher both in dollars and in human suffering.

The Think Tank participants emphasized the distinction that must be made between cost and value. 

They further underscored that both cancer disparity costs and the value accruing from reducing these 

disparities may be tangible and intangible. For example, tangible costs may include dollars spent on 

treatment and lost wages, whereas tangible value may include reduced individual and health system costs, 

lives saved, and restored productivity. Intangible costs of cancer may include emotional anguish and 

diminished quality of life for patients and their families, whereas intangible value may include reduced 

suffering and the opportunity to redirect health care resources to disease prevention. 

Disparities specifi c to cancer may be among the more easily measured types of health disparities because 

of existing cancer-specifi c data collection infrastructure. Even so, based on the limited studies to date 

using these data, we cannot yet quantify the full costs of existing cancer disparities, the cost of eliminating these disparities, or the real and perceived value of eliminating them. Nor can we assess, except at a 

philosophical level, whether the value is worth the cost. 

Moreover, perceptions of cost and value may vary according to different cultural and societal norms. 

Cancer health disparities differ by disease, by population, by geographic region, by age, by gender, and by 

other parameters. Therefore, the economic costs of cancer health disparities must be assessed from many 

perspectives, including those of society in general, government, population groups, employers, insurers, 

and each affected individual. 

The fundamental question centers on the cost-benefi t that could be realized over time compared with 

the current economic and human costs of cancer health disparities. Exploring this and other related 

crucial questions illuminated the current gaps in knowledge that must be fi lled to appropriately frame and 

address the issues. It was clear from the Think Tank deliberations that no consensus currently exists on 

how to measure or balance the costs and benefi ts to the nation of eliminating cancer health disparities. 

Most Americans would agree that in the aggregate, we have made great advances in this nation with 

respect to disease in general, as refl ected by the remarkable increases in average life span and quality of life since 1900. But some groups of people have not enjoyed these benefi ts as much as others, as 

evidenced by their outcomes of cancer and other diseases. Many people, regardless of economic status, 

education, and insurance coverage, have great diffi culty negotiating the health care system and getting 

from the point of an abnormal fi nding and a cancer diagnosis through the treatment of their disease. 
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 7

This problem, often resulting in reduced survival, infl icts the greatest burden on the poor, who typically 

lack fi scal, educational, and information resources.

A cascade of problems—such as fi nancial and geographic barriers to treatment; ineffective providerpatient communication; inadequate screening, and insuffi cient post-treatment and long-term followup—can occur in varying combinations over time, resulting in increased cancer-related costs. We do not 

fully understand all of the potential interrelationships of these problems, but our knowledge of them has 

improved. One thing has become clear: social injustice leading to unfair inequities is at the core of most 

of these problems. 

Realistically, we know that disparities will always exist at some level, because our social and health care 

systems cannot be corrected such that every person will have equal access to care, comparable living 

conditions, and equal amounts of resources. Nonetheless, we suggest that we can dramatically minimize 

disparities and their costs by agreeing as a society, and committing to the belief, that it is unacceptable 

for any person with cancer to go untreated. Further, we must ensure that any inequities in care are not 

caused or exacerbated by biases related to race, ethnicity, culture, or socioeconomic status.

The participants in this Think Tank were drawn from diverse disciplines, including health care delivery, 

health economics, health policy, statistics, health services research, public health, and social science 

research. They were charged to consider the underpinnings of this complex problem and offer suggestions 

for better understanding and addressing these issues. Their deliberations provided the basis of the recommendations in this report.

Cancer health disparities are not only an economic and medical concern but also an extraordinary moral 

and ethical dilemma for this nation. We hope that the considerations and recommendations contained in 

this report will be a tool to stimulate vigorous discussion and bold action to address these issues. 

Harold P. Freeman, M.D. 

Senior Advisor to the Director

National Cancer Institute

Rockville, MD 

Nadarajen A. Vydelingum, Ph.D.

Deputy Director

Center to Reduce Cancer Health Disparities

National Cancer Institute 

Rockville, MD 
8 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

here is a signifi cant disconnect between the development 

of effi cacious prevention and treatment options established through cancer research and the delivery of this 

care to all population groups, most notably cancer patients from 

certain racial and ethnic minority groups, individuals with low 

socioeconomic status, residents in certain geographic locations, and 

individuals from other medically underserved groups.1

 Improving 

the delivery of cancer care to these population subgroups may help 

to reduce cancer health disparities in the United States. 

There are several different defi nitions of disparities and the conclusions regarding the impact of disparities can differ based on the 

defi nition used.2

 The NCI’s defi nition of cancer health disparities is 

as follows:

T

Executive Summary
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 9

“Disparities, or inequalities, occur when members of some population groups do not enjoy the same 

health status as other groups.

Disparities are determined and measured by three health statistics: incidence (the number of new cancers), mortality (the number of cancer deaths), and survival rates (length of survival following diagnosis 

of cancer). Health disparities occur when one group of people has a higher incidence or mortality rate 

than another, or when survival rates are less for one group than another. 

Disparities are most often identifi ed along racial and ethnic lines, i.e., African Americans, Hispanics, Native Americans/Alaska Natives, Asian Americans/Pacifi c Islanders, and whites have different 

disease rates and survival rates. However, factors contributing to disparities extend beyond race and 

ethnicity. For example, cancer health disparities can also involve biological, environmental, and 

behavioral factors, as well as differences on the basis of income and education.”3

Disparities in care exist along the entire cancer care continuum—from primary prevention, to screening and diagnosis, to treatment and follow-up services. Examining and understanding the economic and 

human costs of cancer health disparities to patients, families, employers, providers, and society as a whole 

may be helpful in developing strategies to eliminate or reduce such disparities. There could be signifi cant 

benefi ts to eliminating these disparities, including a reduction in mortality, decreases in cancer- and treatment-related morbidity, and improved quality of life. Measurement of these human benefi ts can be captured in part through estimates of quality-adjusted life years (QALYs), which are composite measures that 

include improvements in the length of life and in the quality of life associated with a particular healthcare intervention. The overall economic value to society of reducing disparities can be assessed through 

cost-effectiveness analyses and cost-of-illness and/or value-of-health studies. Components of these studies 

may include the direct medical and non-medical costs (related to provision of health services), indirect 

costs (e.g., time lost from work and other economic activities), and concurrent changes in population 

mortality and morbidity. 

The costs related to cancer health disparities have not been systematically and comprehensively assessed 

to date. To address this critical need, the Center to Reduce Cancer Health Disparities (CRCHD) of the 

National Cancer Institute (NCI) convened a Think Tank meeting on December 6–7, 2004. The Think 

Tank meeting was convened upon recommendation of an ad-hoc group of experts that met prior to this 

meeting. The meeting consisted of individual presentations from an interdisciplinary team of experts, 

as well as group discussions and breakout sessions to explore identifi ed issues in greater depth. The key 

areas of discussion were the total costs of providing cancer care including a critical assessment of the data 

limitations, challenges in measuring the value of reducing cancer health disparities, and the importance 

of measuring the cost-effectiveness of interventions to reduce cancer health disparities. At the conclusion 

of the two-day meeting the participants provided a list of recommendations and future research activities. 

This report synthesizes the presentations and discussions of the Think Tank. 

Several key conclusions were reached by the Think Tank participants. First, existing data sources have 

not been used adequately to explore issues related to cancer health disparities and there are no population-level data sources available currently to systematically estimate patient-level costs of these disparities. Improvements in the available data sources may allow for the estimation of overall patient-level cost 

burdens related to disparities. The data sources can be improved in several ways: by increasing the sample 

of minority populations (e.g., African Americans, Native Americans/Alaskan Natives; Asian Americans/

Pacifi c Islanders) available for analysis; by developing a national database on cancer epidemiology, outcomes and resource use; by performing linkages among currently available databases and by clearly understanding and adopting national standards (e.g., Office of Management and Budget [OMB] Directive 15)4

on race/ethnicity coding. In addition, decision analytic models can be used to combine effectiveness and 

cost information from these various data sources to estimate the cost of cancer health disparities. Second, 

there are signifi cant overlapping determinants of disparity and therefore there is considerable challenge 

in identifying the cost impact of specifi c determinants. As cancer health disparities are not just an issue 
10 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Xxxxxxxxxx

among racial minority groups, the association between factors such as low socioeconomic status (SES) 

and cancer health disparities should also be examined (although African Americans have the highest 

rate of poverty, about 25%, the majority of Americans below the federal poverty level are white).5 Third, 

since resources available for health care and other services are fi nite, economic evaluations are essential 

to identify interventions that are cost effective. Interventions that are likely to be cost effective are those 

that address target populations with high degree of disparities, those interventions that are highly effective, and those that are low cost. 

Through breakout group discussions, the participants addressed the economic consequences and costs of 

cancer health disparities and made numerous recommendations of cost-effective interventions for eliminating these disparities. The recommendations are summarized below in two subsections—research and policy. 

Research Recommendations

1. Focus on cancers with modifi able attributes and fund prospective clinical trials to evaluate primary 

prevention strategies; 

2. Study processes to develop improved data sources that will facilitate collection and analysis of cost and 

outcomes data; 

3. Develop better methods and tools to measure disparities; 

4. Assess geographic variation and other factors that result in disparities;

5. Include cost-effectiveness assessments in clinical trials and other intervention studies that address 

disparities;

6. Identify changes in the health care delivery system that can reduce the economic burden of cancer 

health disparities; and,

7. Initiate studies to quantify uncompensated cancer care. 

Policy Recommendations

1. Improve and expand current insurance coverage; 

2. Sponsor health policy research to assess impact of cancer payments on quality of care;

3. Reduce geographic differences through community-level interventions;

4. Eliminate health care network disconnects; and

5. Promote primary prevention for cancer sites where evidence supporting primary prevention exists 

(e.g., HPV vaccine).

The research topics and recommendations identifi ed by the Think Tank participants will help direct 

NCI’s efforts in quantifying the economic burden of cancer health disparities and inform policies to eliminate cancer health disparities. A number of specifi c next steps were identifi ed. First, convene a panel of 

experts to identify a detailed process for improving both the epidemiological and cost data available to 

study and assess measures to reduce cancer health disparities. Second, sponsor studies to develop better 

methods to measure cancer health disparities and to evaluate the costs associated with cancer health 

disparities. Third, include cost-effectiveness assessments in any clinical trials or interventions sponsored 

by NCI to reduce cancer health disparities. Fourth, coordinate activities with other federal agencies, 

including Centers for Medicare and Medicaid Services (CMS), to implement initiatives to reduce cancer 

health disparities.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 11

Introduction SECTION 1

1.1 Background

There is a signifi cant disconnect between cancer research discovery/development

(i.e., what we know) and the delivery of care to cancer patients (i.e., what we 

do).6 This disconnect is an important factor contributing to an imbalanced and 

unjust burden of cancer in our society—the burden falling on some racial and 

ethnic minority groups, individuals with low socioeconomic status (SES), residents in certain geographic locations, and other medically underserved groups. 

Improving the delivery of cancer care to these population groups would help to 

reduce cancer health disparities in the United States. 

Examining and understanding the economic and human costs of cancer health 

disparities is an important step in eliminating such disparities. Understanding the 

economic costs and human costs of cancer health disparities may provide guidance to policy makers with regard to cancer health care. To address this need, the 

Center to Reduce Cancer Health Disparities (CRCHD) of the National Cancer 

Institute (NCI) convened a Think Tank meeting on December 6–7, 2004. This 

meeting brought together health economists, cancer care providers, insurers, 

and policy experts to explore the economic costs to the nation resulting from 

cancer health disparities among certain population groups (including racial and 

ethnic minority groups and individuals with low SES) and to identify potential 

interventions to address these disparities. The purpose of this report is to provide 

a summary of the ideas and discussions that occurred during this meeting and to 

review the current knowledge on the economics of cancer health disparities.
12 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

1.2 Objectives

The original objectives of the meeting were:

■ To examine the current evidence regarding the costs of cancer health disparities;

■ To assess the currently available cost data and data needs related to costs of cancer health disparities;

■ To explore new and creative ways of examining and estimating the economic costs of cancer health 

disparities (since there are currently not enough databases containing data of this nature);

■ To strengthen the economic evidence base regarding the cost of cancer health disparities; and,

■ To explore new and creative strategies for reducing and eventually eliminating cancer health 

disparities.

During the initial discussions among Think Tank participants, it became clear to the participants that 

the evidence to support the completion of the objectives listed above was not available; therefore, the 

participants focused on intervention strategies and future research areas which will enable completion 

of these objectives.

1.3 Think Tank Process

The Think Tank meeting consisted of individual presentations from the interdisciplinary team of experts, 

as well as group discussions and breakout sessions to explore certain issues in greater depth (see Appendix 

A for a list of meeting participants). Participants for the meeting were selected based on their expertise 

in specifi c areas of relevance to the Think Tank discussions, including clinical epidemiology, health care 

policy, and cost-effectiveness analyses. Prior to the meeting, all participants received a package of preplanning documents, including a copy of the notes from the planning meeting convened by CRCHD 

(Appendix B) and a background paper on economic costs of cancer health disparities prepared by the 

CRCHD staff (Appendix C).

The two-day meeting began with introductions and discussions regarding the purpose and rationale behind 

convening this Think Tank meeting and the core questions to be discussed and answered. The agenda for 

Day 1 of the meeting consisted of six individual presentations followed by group discussion (The agenda 

and brief descriptions of the presentations are provided in Appendix D). Additionally, the six individual 

presenters participated in a panel discussion, during which both participants and observers asked questions and discussed the major issues from the day-long session. Day 2 began with a breakout session where 

participants were divided into two groups and given the same set of key questions:

■ What is the total cost of cancer care?

■ What proportion of the total cost of cancer care is related to health disparities?

■ What would be the cost of eliminating cancer health disparities in America?

■ What is the value of reducing cancer health disparities in America?

■ What are the policy implications of reducing cancer health disparities?

■ What is the cost of changing policies?

Deliberations and discussions from the breakout session were summarized and followed by fi nal discussions and wrap-up.

1.4 Organization of Report

This report begins with an overview of the determinants of cancer care disparity and a description of the 

“cancer care continuum” (Section 2). Section 3 discusses the total cost of cancer care and limitations of 

currently available data sources. Section 4 presents the methodological issues related to reducing cancer 

health disparities, followed by Section 5, a discussion of the costs and cost-effectiveness of implementing 

interventions to reduce cancer health disparities. Finally, Section 6 summarizes the Think Tank’s recommendations for future research and policy initiatives.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 13

Overview SECTION 2

2.1 Defi nition of Disparity

There are several different defi nitions of disparities and the conclusions regarding the impact of disparities can differ based on the defi nition used.2

 The NCI’s 

defi nition of cancer health disparities is as follows:

“Disparities, or inequalities, occur when members of some population groups do 

not enjoy the same health status as other groups.

“Disparities are determined and measured by three health statistics: incidence 

(the number of new cancers), mortality (the number of cancer deaths), and survival rates (length of survival following diagnosis of cancer). Health disparities 

occur when one group of people has a higher incidence or mortality rate than 

another, or when survival rates are less for one group than another.3”

The Minority Health and Health Disparities Act of 2000 provides the following 

defi nition of “disparity population”: 

“A population is a health disparity population if there is a signifi cant disparity in the overall rate of disease incidence, prevalence, morbidity, mortality, or 

survival rates in the population as compared to the health status of the general 

population. In addition, ... [the defi nition may include] populations for which 
14 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

there is a considerable disparity in the quality, outcomes, cost, or use of health care services or access to, 

or satisfaction with such services as compared to the general population.”7

2.2 Determinants of Disparities

Determinants of cancer health disparities are underlying factors that may have an effect on individual 

outcome measures. Disparities are most often identifi ed along racial and ethnic lines, i.e., African Americans, Hispanics, Native Americans/Alaska Natives, Asian Americans/Pacifi c Islanders, and whites have 

different disease rates and survival rates. However, factors contributing to disparities extend beyond race 

and ethnicity though.3 They include factors within the health care delivery system (e.g., access to health 

care, insurance coverage, health care network disconnects) as well as factors outside of the system (e.g., 

education, SES, geographic differences).

Factors Within the Health Care Delivery System

Within the health care delivery system, lack of insurance coverage is a major contributor to cancer health 

disparities. Furthermore, the stability and quality of insurance coverage is even more important than simply 

being insured. The U.S. Census Bureau reports that, in 2005, approximately 16% of the population (46.6 

million people) had no health insurance coverage.5 The percentage of persons without health insurance 

was higher in certain racial groups and in groups with lower SES. Of Americans under 65 years of age who 

are diagnosed with cancer, 20% of Hispanics, 14% of African Americans, and 10% of whites do not have 

health insurance.8

An Institute of Medicine (IOM) report “Care Without Coverage: Too Little, Too Late, ” found that 

uninsured patients with breast, colorectal, or prostate cancer are in poorer health and more likely to die 

prematurely than their insured counterparts, primarily due to delayed diagnosis.9 For example, an uninsured 

0

1

2

3

0

1

2

3

Colorectal 

Cancer

1.7

2.6

1.4

1.5

1.7

Melanoma Breast

Cancer

Prostate

Cancer

Colorectal 

Cancer

Ratio of the Probability of Late vs. Early 

Stage Cancer, Uninsured/Insured

Ratio of the Risk of Death, 

Uninsured/Insured

* Privately insured all had commercial indemnity plans. ** Among cancer cases identifi ed in 1994; mortality followup through 1997.

All differences are statistically signifi cant after adjusting for age, sex, race/ethnicity, co-morbidity, marital status (when appropriate), smoking status, 

socioeconomic status, education, stage at diagnosis, and treatment.

SOURCES: The Kaiser Commission on Medicaid and the Uninsured, 2003.10

FIGURE 1 Ratio of the Probability of Diagnosis of Cancer at Late Stage,Uninsured 

Compared with Insured,* 1994
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 15

woman with breast cancer faces a 30%-50% higher risk of dying compared with her insured counterpart, 

and an uninsured person with colorectal cancer has a 50% greater chance of dying compared with someone 

who has private insurance.9 This fi nding is also true for other cancers, as shown in Figure 1. 

Over time, high rates of persons without insurance coverage lead to unstable connections to care, disruptions in care, and greater costs.Lack of adequate insurance coverage limits access to care, partially due to 

cost-related issues12 and partially due to the lack of a primary care provider.13 Finally, even in persons with 

low incomes who are insured, cost-sharing and out-of-pocket expenses compromise receipt of effective 

medical care.11

Factors such as availability of appropriate providers and services at an affordable cost and access to appropriate referral services are important to receiving high quality health care and, if compromised, can contribute to health care disparities. For instance, in rural areas there may be a lack of specialists which can 

lead to delays in diagnosis of cancer and treatment, or language barriers can result in non-English speakers 

not seeking or receiving appropriate care.9 Disruption of traditional community-based care can also lead to 

disparities as providers familiar with individuals in a particular locality may no longer be available.14

Factors External to the Health Care Delivery System

Factors external to the health care delivery system which contribute to disparities include gender, race, 

ethnicity, SES (income, education), and geographic location. According to Freeman (2004)1, the three 

principal determinants of cancer disparities (Figure 2) are:

■ Poverty (low SES);

■ Culture; and

■ Social Injustice.

Poverty is generally correlated with lack of information, risk-promoting behaviors, and reduced access 

to appropriate health care. The percentage of individuals living in poverty is disproportionately high 

among African Americans, Hispanics/Latinos, Native Americans, Pacifi c Islanders, and Native Hawaiians 

compared with white Americans. The poor are at greater risk of being diagnosed and treated for cancer 

at late stages of disease and are less likely to survive a diagnosis of cancer. Among the three main determinants, poverty contributes to health disparities more than the other two factors.1

 A study of colorectal 

cancer screening among Medicare benefi ciaries concluded that much of the disparities in screening rates 

can be explained by differences in socioeconomic status. Disparities in socioeconomic status decreased but 

remained signifi cant even after adjustment for personal and health system factors. 15

Causes of Health Disparities

Prevention Early 

Detection

Diagnosis/

Incidence

Treatment Post Treatment/

Quality of Life

Survival 

and Mortality

Poverty/Low 

Economic Status

Social Injustice Culture

FIGURE 2 Causes of Cancer Health Disparities

SOURCE: Freeman, Adapted from Cancer Epidemiology Biomarkers & Prevention, April 2003.
16 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

All Races Non-Hispanic 

White

Black

Percent of County Population Below Poverty Level in 1999

< 10%

10%-19.99%

20%

Race

Average Annual Age-Adjusted Death Rate per 100,000 Population

American

Indian

Asian/Pacific

Islander

Hispanic 0

2

4

6

8

2.3

3.1

4.2

2.1

2.7

3.1

4.5

6.0

6.6

2.0

2.5

4.2

2.5

3.3 3.2

2.7

3.6

4.8

FIGURE 3 U.S. Cervical Cancer Mortality by Race and Poverty Level, 1996-2000

SOURCE: Singh et al., 2004.16 

A recent report published by CRCHD on cervical cancer (2005) and research by Singh and colleagues16

highlights the correlation of SES and disparities in the incidence and mortality of cervical cancer at the 

county-level in the United States. The study found substantial inequalities in both the incidence and 

mortality of cervical cancer, with rates of disparities becoming higher with increasing poverty and decreasing education levels. Patients living in lower SES census tracts were also signifi cantly more likely to be 

diagnosed at late stages of the disease and were less likely to survive. Figure 3 highlights these disparities.

Although poverty is considered a primary determinant of cancer health disparities, much of the statistics on disparity are also related to racial differences. Race itself does play a role in determining cancer 

disparities.17, 18 A recent IOM report (2002) found that racial and ethnic disparities in health care exist in 

the context of broader-scale social and economic inequalities. The report concluded that these disparities 

persist even after controlling for SES (i.e. income and education). Selected statistics from the NCI and 

the National Center for Health Statistics (NCHS) indicate several racial disparities. 19

■ African Americans have the highest cancer incidence and cancer-related death rates overall;

■ African American males have the highest incidence and mortality rates for colon, prostate, and lung 

cancers;

■ While Caucasian American females have the highest incidence of breast cancer, African American 

females have the highest death rates for breast cancer;
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 17

FIGURE 4 Critical Disconnect Between Research/Discovery and Delivery of Care

Critical Disconnect

Discovery Development Delivery

SOURCE: Freeman, 2000.6

SOURCE: Zapka et al., 2003.20

Failure in 

Access to 

Care

Failure to 

Screen

Failure 

During 

Follow up of 

Abnormal 

Results

Failure During 

Follow up of 

Diagnostic/ 

Treatment 

Plan

Failure to 

Follow up 

Surveillance 

Plan

Failure to 

Access 

Care

Risk Assessment

Primary Prevention

Diagnosis

Treatment

Recurrence Surveillance

End-of-Life Care

Failure to 

Identify Need 

to Screen or 

Counsel

Primary 

Prevention 

Failure

Failure in 

Detection

Failure during 

Diagnostic 

Evaluation

Failure of 

Treatment

Failure in 

Surveillance

Failure in 

Surveillance

Potential Failures During Process of Care

➔

➔

➔

➔

➔➔➔

➔ ➔ ➔ ➔ ➔

➔

Screening/Detection

FIGURE 5 Cancer Care Continuum

➔
18 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

■ Hispanic/Latina females have the highest incidence rates among all racial groups for cervical 

cancer, and Vietnamese females [a subset of Asian-Pacifi c Islanders] have the highest mortality 

rates among all racial groups for cervical cancer; and,

■ Asian/Pacifi c Islanders have the highest incidence rates of liver and stomach cancers for both sexes.

2.3 Screening, Diagnosis, and Treatment Disparities: 

The Cancer Care Continuum

Freeman has hypothesized that there is a critical disconnect between cancer research discovery/development and the delivery of care to cancer patients6

 as illustrated in Figure 4.

Even for those who have access to care, the Cancer Care Continuum (Figure 5) illustrates that disparities in cancer care can occur at any stage of screening, diagnosis, or treatment. In the continuum from 

risk assessment through end-of-life care, a patient can fail to receive adequate care during any or all 

steps of the process. For example, a patient may not be screened appropriately, may not receive adequate 

treatment, may not be able to access end-of-life care, or may experience all three as well as other failures 

during the process.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 19

Total Cost of Cancer Care SECTION 3

otential critical disconnects in the cancer care continuum may result in 

additional costs to both the health care system in terms of potentially 

higher costs of treating late-stage cancers and to society as a whole due to 

premature mortality. Several presentations and numerous discussions were held 

during the Think Tank meeting to better understand the costs related to cancer 

care and the challenges of measuring these cost impacts. In this section, the key 

themes from these presentations and discussions are summarized. The section begins 

with a background on the cost domains, followed by a summary of the overall cost 

associated with cancer care, and fi nally an in-depth discussion of the challenges of 

measuring the costs related to cancer health disparities.

P
20 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

3.1 Overview of Cost Domains

Economic costs of cancer include all resources required and used to provide a service—and the value of 

foregone opportunities to use these resources for a different service. The economic costs of cancer care 

and control include a wide range of factors: expenditures for cancer health care services; costs associated 

with time and effort spent by patients and their families and by cancer treatment providers; and costs 

associated with lost productivity due to cancer-related disability and premature death. Disparities in 

cancer care may increase the costs for individuals, families, employers, governments, and society. 

Health care costs can be divided into direct, indirect, and intangible costs. 

■ Direct costs are related to expenditures for goods, services, and other resources used in the direct provision of a service. Both direct medical (e.g., cost of medications) and direct non-medical (e.g., paid 

child care) costs are categorized as direct costs. 

Specifi c Cost Elements Required for Measuring 

Total Cost of Cancer Care 

TABLE 1 

Core Direct Costs:

■ Screening

■ Hospitalization

■ Outpatient clinical care

■ Physician visits

■ Rehabilitation/ home health care

■ Prescription and non-prescription drugs

■ Medical devices (walkers, wheel chairs, etc.)

■ Nursing home/long-term care

■ Hospice care

Other Direct Costs:

■ Transportation to health care providers

■ Child care related to obtaining health care services

■ Special diets

■ Lodging for remote treatment facilities

Core Indirect Costs (impact on patient):

■ Reduced productivity

■ Job loss/Shift to lower-wage employment 

■ Loss of promotion opportunities

■ Lost wages due to premature death

Other Related Indirect Costs (impact on family/friends):

■ Time lost from work and housekeeping by family members 

or friends

■ Loss of volunteers/caregivers to the community

Intangible Costs:

■ Pain and suffering

■ Bereavement

■ Psycho-social impairment

■ Familial health

SOURCE: Gold et al., 199623 and Fryback et al., 2004.24
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 21

■ Indirect costs are generally resources related to days lost from work (i.e., loss of productivity). Medical 

or health-related indirect costs are generally broken down into morbidity (e.g., lost productivity due 

to work disability) and mortality (e.g., lost productivity due to premature death). 

■ Intangible costs are those related to adverse health effects for which there are no market prices (e.g., 

reduction in quality of life due to physical pain, emotional problems, and lifestyle changes). A reduction of intangible costs does not free up resources that could be used to produce other goods and 

services. This makes it diffi cult to estimate the impact of these costs, which can also extend beyond 

the patient to relatives who experience grief, bitterness, or depression.21,22

Understandably, economic studies often focus only on direct and indirect costs due to the diffi culty in 

assessing intangible costs. In presenting direct and indirect costs, an additional distinction is often made 

in economic studies between costs primarily within the health care system (core costs) and costs outside 

of the health system (non-core costs). The costs used in assessing the cost of cancer are shown in Table 1.

3.2 Overall Cost of Cancer Care

Costs related to cancer care contribute signifi cantly to the overall health care costs in the United States. 

Hence, reliable and timely estimation of cancer-specifi c costs can help to assess the following:25

■ Overall economic burden of cancer morbidity and mortality;

■ Magnitude of economic resources needed to effectively care for patients with cancer;

■ Cost-effectiveness of cancer prevention, screening, and treatment policies and programs; and,

■ Societal benefi t/cost return on investment from cancer research and control.

One approach to measuring the economic costs associated with cancer care is to measure the Cost of 

Illness (COI) associated with cancer. COI is an evaluative approach that considers the treatment-related 

economic costs as well as the economic value associated with loss of health and life.26 COI estimates 

SOURCE: Brown et al., 2002.25

Cancer Care Costs by Stage at Diagnosis

FIGURE 6 Treatment Cost and Survival: Breast Cancer
22 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

generally consist of direct costs, morbidity costs, and mortality costs. The estimate of total cost of cancer 

in the year 2005 is $209.9 billion: $74.0 billion in direct costs, $17.5 billion in morbidity costs, and $118.4 

billion in mortality costs.27

Several studies on cancer care have reported on the direct health care costs and patient time and employment costs. The fi ndings from these studies are reported in the sections below.

Direct Health Care Costs 

Distribution of Cancer Care Costs

Using data from SEER-Medicare, 

Brown and colleagues25 generated 

estimates of total Medicare payments 

for Medicare enrollees following a 

cancer diagnosis, as well as estimates 

of cancer-specifi c payments by cancer 

site, stage at diagnosis, and type of 

treatment. Examination of the distribution of breast cancer care costs (See 

Figure 6) revealed that cost curves 

were U-shaped, with the two vertical 

segments of the U (i.e., high costs) 

representing initial and terminal phase 

costs (costs occurring around the time 

of diagnosis and at the time of death), 

and the bottom of the U (lower costs) 

representing continuing care costs 

(costs occurring during the periods in 

between diagnosis and death).

Cancer Care Costs by Stage 

and Diagnosis

A confounding variable in estimating 

cancer care costs is the stage at diagnosis. Overall, costs are generally highest 

for Stages II and III and lower for 

in situ, Stage I, and Stage IV. 25 For 

example (See Table 2), an analysis of 

cancer-related total Medicare payments 

(includes only those 65 years and older) 

for up to 25 years after the date of 

diagnosis for colon cancer reveals that 

the long-term costs for Stage II are 

higher ($34,400) compared with longterm costs for Stage IV ($29,400).28

While initial cancer care costs are 

higher for patients with Stage IV 

diagnoses, long-term costs are higher 

for patients with Stage II diagnoses 

due to the additional continuing care 

costs that accumulate over the longer 

average survival period.25

TABLE 2 Cancer-Related Treatment Cost of Colorectal Cancer

Stage Without Unrelated Costs

In Situ $28,000

Stage 1 32,700

Stage 2 34,400

Stage 3 41,600

Stage 4 29,400

SOURCE: Etzioni, Ramsey, et al., 2001.

Estimates of Direct Costs for Cancer Based 

on SEER Medicare Data, 1996

TABLE 3

Cancer Site Direct Costs ($ billions)

All sites 42.39

Female breast 5.98

Colorectal 5.71

Prostate 4.61

Lung and bronchus 4.68

SOURCE: Brown et al., 2001.26

Time Costs Related to Colorectal Cancer Treatment: 

Difference in Cost for Cases Versus Controls (Net Costs) 

TABLE 4

Phase of Care Patient 

Time Costs

Direct 

Medical Costs

Patient Time 

as % of Direct 

Medical Costs

Initial

(average)

$4,592 $23,743 19.3%

Continuing

(per month)

25 158 15.8

Terminal 

(average)

2,788 7,577 36.8

Net Costs

SOURCE: Yabroff et. al. (2005).32
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 23

Cancer Care Costs by Type of Cancer

Costs of cancer care not only differ based on stage of disease, but also by type of cancer. For example, the 

1996 cost estimates by Brown et al. presented in Table 3 show that 50% of the direct medical costs for 

cancer care for Medicare patients are associated with four types of cancers. 

Medicare Expenditures versus National Expenditures for Cancer Care

A comparison of Medicare expenditures for cancer care versus national expenditures for cancer care 

(1996 data) showed remarkable agreement in terms of both overall magnitude and expenditure components by gender.25 When expenditures based on the 13 most common cancer types were compared, breast, 

colon, prostate, and lung were consistently the top four highest-cost cancers. 

Cost of Cancer Patients Compared with Controls

Several studies have compared the cost of care for patients diagnosed with cancer to that for controls 

without cancer, and consistently found that care for patients with cancer has higher direct costs. In a 

recent case-control study, the overall average direct health care cost for patients with cancer was estimated at $32,629, compared with $3,218 for controls without cancer, showing a signifi cant difference 

in cost.29 A study of female employees aged 50-64 diagnosed with breast cancer reported the average 

annual direct cost associated with breast cancer to be $13,925 compared to $2,951 for a random sample of 

female employees.30 An analysis of the SEER-Medicare database estimated the lifetime cost for long-term 

colorectal cancer survivors (at least 5 years) were $19,516 higher than costs for controls without cancer.31

Time Costs 

Time costs represent the value of the time patients and family members spend on activities related to 

the patients’ cancer screening and treatment—time that could be spent engaged in other activities. 

Since time costs are not generally measured by traditional health care accounting systems, it is diffi cult 

to place a value on time costs. Table 4 presents patient time costs for colorectal cancer expressed in 

terms of wages lost. As seen from the table, time costs can add signifi cantly to the total costs of cancer 

care. The initial phase was the fi rst 6 months after diagnosis, the terminal phase was the fi nal 12 months 

before death.

Employment Costs

A diagnosis of cancer may infl uence both an employee and an employer’s decisions regarding employment 

status and the number of hours worked. Furthermore, a decision to discontinue employment following a 

diagnosis of cancer has economic effects for the patient, his or her family, and society. 33–35

Analysis of the 1992 National Health Interview Survey36 revealed that nearly one fi fth (18.2%) of the 

cancer survivors who worked before or after their cancer diagnosis experienced employment problems 

because of their cancer. These included on-the-job problems from an employer or supervisor, the inability 

to change employers, and loss of their job because of cancer. Another study reported that 13% of all adult 

survivors of a variety of cancers had quit working for disease-related reasons within 4 years of diagnosis.37

The disability and work loss experienced by cancer survivors may ameliorate over time. A study of breast, 

colon, lung, and prostate cancer survivors 35 to 75 years found that, 5 to 7 years after diagnosis, of those 

who were working at the time of their initial diagnosis, 67% remained employed and that there was no 

negative impact of survivor’s decision to retire or the quality of the retirement experience.38 The ability 

to return to work may depend on the type of cancer: for example, patients with central nervous system, 

head and neck, or Stage IV blood and lymph malignancies are more likely to experience adverse employment outcomes.37 A study on the impacts of Hodgkin’s and non-Hodgkin’s lymphoma on work initiation 

after cancer treatment found that only 54% of patients in remission who were able to work returned 

to work.39 Overall, cancer does have a signifi cant impact on ability to work. Kessler and colleagues40

analyzed a nationally representative telephone-mail survey and found that cancer was associated with the 

highest reported prevalence of any impairment (66.2%) and the highest number of impairment days in 
24 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

the past 30 days (16.4 days) compared to other chronic medical conditions such as major depression and 

heart disease. 

The work impacts specifi cally attributable to breast cancer have been examined in a large number of 

studies. A recent study by Bradley and colleagues41 examined the effect of breast cancer on women’s labor 

supply and found that:

■ Compared to women who had never had the disease, survivors of breast cancer had a 10% lower 

probability of being employed; and,

■ Breast cancer may force a woman to give up her employment, which may lead to economic hardship 

for the patient and her family. In some cases, women undergoing breast cancer treatment continue to 

work despite the negative consequences on their health because of the need to retain health insurance coverage through their employer. 

A notable fi nding in the study was that, among employed women, those with breast cancer may work 

more hours per week compared with women without the disease. The authors hypothesize that survivors 

and their families may be attempting to restore funds spent during the illness or else survivors approach 

their work with renewed vigor. Other studies on breast cancer survivors also support the fi ndings in this 

study that survivors who were working at the time of their diagnosis experienced negative impacts.42–45 A 

study by Stewart and colleagues45 found that over 40% of breast cancer survivors reported that cancer had 

affected their work. In addition, breast cancer survivors were more likely to be functionally impaired even 

5 years after breast cancer diagnosis and this, in turn, resulted in reduced work effort over the long-term. 

Overall, breast cancer survivors had signifi cantly larger reductions in annual market earnings than working controls about 5 years after diagnosis. Furthermore, Chirikos and colleagues44 found that this reduction in earnings mainly resulted from reduced work effort and not change in pay rate. 

This work loss or reduction in work hours related to cancer is a signifi cant indirect cost. Sasser and colleagues30 analyzed disability claims from 7 large employers from 1998 through 2000 for females 50–64 

years with breast cancer diagnosis and found that the average annual indirect costs associated with breast 

cancer was $8,236. Another study found that among insured women with breast cancer, the out-of-pocket 

expenditure and lost wages averaged $1,455 per month and represented a signifi cant fi nancial burden.46

The employment-related cost of cancer is a very complex fi eld, in which several interacting factors may 

infl uence a survivor’s decisions to work and thus his/her overall productivity. While there is some published evidence available in this area, the employment costs of cancer needs to explored further. Further 

research is needed to identify key factors that guide work decisions and the range of adaptations necessary to reach the desired level of economic productivity.47 No research to date has focused on the work 

impacts associated with populations who experience health disparities in cancer care.

3.3 Data Limitations

In order to correctly measure the economic burden of a disease, adequate incidence and mortality data 

must be available. In addition, reliable and timely data must be available at the level of cancer site, stage 

at diagnosis, and type of treatments.25 Currently, there is no reliable data source to systematically estimate patient-level or population-level costs of cancer health disparities. There are several limitations to 

performing cancer economic assessments based on data currently available.

1. Lack of recent data on cancer outcomes linked with resource use. The SEER-Medicare data is the only 

national linked cancer registry and administrative claims data source and provides a valuable source to 

perform economic assessments of cancer burden and treatments. Unfortunately, the latest year of data 

for cancer incidence is 2002 with Medicare claims available for this cohort till 2003. Therefore, at best, 

the data available for analysis is 4 years old. Given the rapid changes in cancer screening, diagnosis, 

and treatment, the availability of more current data would provide better estimates.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 25

2. No comprehensive national data on cancer epidemiology and outcomes. The most reliable data on 

diagnosis, treatment, and survival comes from the SEER cancer registries. However, the availability 

of high-quality SEER data is limited to approximately 26% of the U.S. population, residing in areas 

with SEER registries. The NCI and Centers for Disease Control and Prevention (CDC) are working cooperatively through the CDC’s National Program of Cancer Registries (NPCR) to improve the 

collection of high-quality data and coordination between the two registry programs. Potentially, these 

collaborations could result in more universal data systems to assess cancer outcomes and costs. 

3. Small sample sizes for studying minority populations. In general, only a small sample of the non-white 

population is available for analysis, leading to unstable estimates for minority groups (for example 

cervical cancer mortality rates among Vietnamese). The SEER cancer registry program has been 

expanded recently to cover more of the racial, ethnic, and socioeconomic diversity of the country, 

allowing for the better description and tracking of trends in health disparities. 25 This could allow for 

better representation of minority groups in future data.

4. Limited data on individuals younger than 65 years. The data systems available to assess the quality 

of care on a national or regional basis are fragmented,48 particularly for those under 65 years of age. 

Refl ecting the U.S. health care system, data for those under 65 years are limited by payer source, 

and longitudinal analysis is often not possible because of limited enrollment periods with a specifi c 

provider. Therefore, unlike SEER-Medicare data, which is largely limited to those 65 years and older, 

there is no national linked cancer registry and administrative data to perform long-term assessments of 

health care resource use for those under 65 years. In performing economic assessments, outcomes data 

are limited in use unless supplemented with utilization and expenditure data.49 In addition, given the 

importance of cancer stage, data sources not linked to clinical endpoints [for example, the Healthcare 

Cost and Utilization Project (HCUP)50] are of limited use.

5. Lack of standardization in collecting non-medical resource use and cost data. There is a great need 

to better quantify the resources expended by patients, families, and caregivers outside of the health 

care system.24 In fact, recent estimates have shown that indirect costs associated with cancer are 

higher than direct costs,51 therefore data sources that accurately quantify these costs are required.

6. No national standards for race/ethnicity categories despite OMB Directive 15 which provides guidelines for racial and ethnic categories in the United States. Federal, state, and private institutions do 

not coordinate in their attempts to code race, which makes it diffi cult for compare between these data 

sources. Race is often self-reported and therefore the reliability of the data available is questionable. 

In some cases (e.g. 2000 Census), mixed race individuals only select a category to indicate “more than 

one race” and do not provide any details on race which signifi cantly limits the information available for 

analysis. In addition, most private payer administrative data sources do not include race as a category.52

7. Limited information on costs related to cancer care. A thorough assessment of a wide variety of costs 

is required to generate a reliable total cost of providing cancer care and to estimate the cost associated with cancer health disparities. Currently, we do have reliable data to estimate hospital costs for 

uninsured patients (uncompensated care costs), but not for estimating out-of-pocket payments made 

by patients, indirect costs incurred by patients, family members, and the community as a whole. 
26 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

SECTION 4

learly, the reduction or elimination of disparities and improvement in 

cancer care outcomes would have signifi cant benefi ts for patients, the 

community, and society as a whole. In this section, a synthesis of the 

Think Tank discussions on approaches to measure the economic benefi ts of 

reducing cancer health disparities and potential challenges are presented.

C

Economic Benefi ts of Reducing 

Cancer Health Disparities
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 27

1

 SES- Socioeconomic Status 2 Stage IV cancers may have lower cost than Stage II and III cancer 3 HRQL – Health Related Quality of Life

4.1 Benefi ts of Reducing Cancer Health Disparities 

Final health outcomes are the ultimate measures of disease impact, including mortality, morbidity 

(e.g., side effects, disability) measures, and Health-related Quality of Life (HRQL) measures. By defi nition, intermediate outcomes—measures such as response rate and disease reoccurrence rate—lead to fi nal 

outcomes. The elimination of “failures” (i.e., inabilities to provide patients with appropriate screening and 

interventions) across the cancer care continuum would result in improvements in intermediate outcomes, 

which would result in improvements in fi nal outcomes and may result in the reduction of disparities. 

A framework for assessing the economic costs of cancer health disparities is provided in Figure 7.

Overall, a decrease in cancer disparities should result in the following benefi ts to stakeholders at all levels:

■ Increase in HRQL; 

■ Decrease in morbidity;

■ Less burden on family members and community;

■ Improved ability to work; and,

■ Decrease in mortality.

HRQL refers to the impact that health conditions and their symptoms have on an individual’s quality of 

life. In the context of health care, the term “quality of life” is referred to as “HRQL” because of its focus on 

health. The usual focus of HRQL assessment encompasses the physical, emotional, and social well-being 

FIGURE 7 Framework for Assessing Economic Costs of Cancer Health Disparities

Determinants 

of Disparity

Inequities in Health 

Care Services

Health Outcomes 

Differential 

Cost Impact 

Factors within the 

Health care Delivery System

■ Lack of Insurance 

Coverage

■ Inadequate Reimbursement 

Rate

■ High Copayments

■ Lack of Trained Providers

■ Language Barriers

■ Distance to health care 

facility

■ Quality of health care 

facility

■ Lack of Insurance

Factors External to the 

Health care Delivery System

■ Race

■ Ethnicity

■ SES1 (income education)

■ Geographic Location

■ Gender

■ Culture

■ Social Injustice

■ Distrust of Health Care 

System

Risk Assessment 

Primary Prevention

Detection 

(Screening/Diagnosis)

Treatment

Surveillance

End-of-Life Care

Direct Costs

Intermediate Outcomes

Higher Incident Rate

Late Stage Diagnosis

Lower Response Rate

Treatment Success

Disease Recurrence

Inadequate Palliation

Medical Costs

Higher Treatment 

Cost2

Additional 

Treatment Cost

Non-Medical Costs:

Transportation

Child Care

Elder Care

Indirect or 

Productivity Costs

Lost Earnings due to 

Premature Death

Lost Time from Work, 

Household Activities 

and Reduced 

Productivity for 

Patient and Family

Final Outcomes

Decreased HRQL3

Increased Morbidity

Higher Mortality Rate
28 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

of the patient. HRQL can be defi ned as health status and viewed as a continuum of increasingly complex 

patient outcomes: biological/physiological factors, symptoms, functioning, general health perceptions, 

and overall well-being or quality of life.53 It describes the effectiveness of treatment or health status as 

the extent to which health care needs have been met, and HRQL measurement is often performed using 

patient responses to questionnaires and is therefore a measure of the impact of the disease or treatment 

from the patient’s perspective.54

A survey of long-term survivors of breast cancer found that younger women with breast cancer had greater 

psycho-social stress compared with older women, and that long-term, disease-free survival resulted in 

excellent HRQL, with survivors experiencing many years of high levels of functioning and good HRQL.55

Results from a second study of women who were diagnosed with breast cancer at a young age and who 

were long-term survivors of the disease showed that inadequate management of disease-related pain or 

other symptoms substantially affects the everyday lives of survivors.56 Additionally, Casso and colleagues56

note that HRQL in cancer survivors may be affected by socioeconomic status. A study conducted in 

long-term, female survivors of colorectal cancer also found that long-term survival results in HRQL that 

is comparable to that seen in women of similar ages in the general population, and that comorbidities had 

the strongest infl uence on HRQL.57 In an evaluation of health utility in patients with melanoma, breast 

cancer, colon cancer, or lung cancer, Ko and colleagues58 note that pain and comorbidities, items which 

can be improved through high quality medical care, substantially affect HRQL.

Changes in the health care system have resulted in a shift of cancer care from the inpatient arena to 

ambulatory and home settings. This shift has translated into increased family involvement in the day-today care of a person with cancer. Patients with cancer often require intensive care,59,60 which can result 

in a signifi cant burden to family members. Often, caregivers who are employed experience problems in 

their ability to work, and a large proportion miss work because of their caregiving responsibilities.61 When 

family members are not available, health care workers will have to be employed to provide the necessary 

care which adds to the overall expense. 

Decrease in cancer-related mortality and morbidity can have a profound impact on the patient, their 

family, friends, employer, the community, and the nation. For example, detecting cancer at an earlier 

stage will require less intensive treatment, resulting in quicker recovery for the patient—often back to 

the health status prior to cancer diagnosis. Patients can therefore return to employment or engage in 

normal activities sooner. Thus, family caregivers would have to spend less time accompanying patients to 

their treatment and less time in care-giving with a quicker recovery period. 

4.2 Measuring the Value of Reducing Disparities

Estimating Mortality, Morbidity, and HRQL Impacts

Global health measures that include mortality, morbidity, and HRQL are increasingly used by policy 

makers to assess the overall impact of a disease. This approach, often referred to as “health-adjusted life 

years” (HALYs), integrates the biomedical and psycho-social models, and therefore has been labeled 

as the bio-psycho-social model.62,53 It incorporates the features of several summary measures: QualityAdjusted Life Years (QALYs), Disability-Adjusted Life Years (DALYs), Healthy Life Years (HLY), and 

Years Lived with Disability (YLDs). All these measures have two components: (1) life expectancy or 

mortality estimates and (2) morbidity and HRQL impacts of the disease. These two components are then 

combined in a mathematical formula to derive the composite measure.49 QALYs and DALYs are two 

methods for measuring disease-specifi c burden.63,64 QALYs have been criticized because the measurement 

can be biased and the QALYs estimated can differ based on the methodology used and type of population 

from which the utilities or values are derived. The disability classifi cation of DALYs, on the other hand, 

is derived from secondary data analysis (for example, mortality and injury data) and/or is based on an 

expert panel classifi cation of disease and disability.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 29

Estimating Economic Impacts

As indicated in Figure 7, the value of reducing cancer disparities should be assessed by estimating the 

economic costs specifi cally associated with cancer health disparities. Most studies estimating disease 

burden are based on the traditional COI approach, which permits the valuation of the economic burden 

of diseases and premature deaths. The methods usually used to perform COI estimation are based on a 

series of studies by Rice and colleagues. 48, 65-70 COI estimates provide order-of-magnitude indicators of 

the economic burdens imposed on society by various diseases and conditions. Economic burden generally 

comprises the cost to the patient, caregiver, payers, and society as a whole. The primary cost categories in 

COI studies are the direct costs and indirect costs discussed earlier. 

Willingness-to-pay (WTP) is another approach to assess costs associated with cancer. The WTP method 

attempts to assign dollar values to the resources that individuals are willing and able to forego for a reduction in the probability of developing cancer and potentially dying from cancer. WTP is more aligned with 

conventional concepts in welfare economics, but it is generally more diffi cult and expensive to implement 

than COI, and there is no consensus on reliable and standardized survey instruments for doing so.71 The 

WTP estimates are also often diffi cult to infer as there could be variability based on the respondent’s economic status and their physical and mental condition at the time of the survey.72 COI therefore currently 

remains the preferred practical methodology to estimate the economic burden associated with cancer.

In general, when using the COI approach, consensus exists over the measurement of direct costs. Costs 

associated with health care services (core direct costs) are often estimated from the amount reimbursed 

by insurance (payment). In some instances, detailed bottom-up, micro-cost data may be available, but 

this requires signifi cant effort and detailed cost-accounting systems in place in order to calculate the cost. 

Charges are not recommended, as they are not a refl ection of costs; but charges can be converted to costs 

using cost-charge ratios. 

The optimal method for estimating indirect costs, whether the human capital approach, frictional cost 

estimation, or WTP, remains a subject of debate. The human capital method is the simplest to implement 

and is often used in COI assessments to estimate indirect costs. The human capital approach generally uses national data on population, life expectancy, labor participation rates, and earnings to develop 

annual and lifetime earnings profi les by sex and age. This approach excludes the costs associated with 

pain and suffering, leisure time, and volunteer work. Researchers have argued that this method could 

bias results and have suggested alternatives.73 The frictional cost method only accounts for the potential 

production loss for the time it takes a fi rm to adapt to the loss or reduced productivity of the sick person, 

and therefore produces estimates that are generally much lower than the human capital approach.74,75

WTP, although potentially resource intensive, can be used to assess indirect costs and serve as a complement to the overall COI approach.

Generally, a COI study must answer the following three questions: 

■ What adverse outcomes are associated with cancer health disparities? 

■ What is the degree of causality between cancer health disparities and these outcomes? 

■ What economic values ought to be assigned to the consequences?

COIs can be performed either using a top-down or a bottom-up approach.49 The top-down approach 

involves using national data to infer through statistical methods the share of each specifi c diagnosis or 

disease grouping.76 The bottom-up, micro-analytic strategy derives estimates of costs based on expenditures on specifi c services. An example is analysis of SEER-Medicare data to assess the cost of a specifi c 

type of cancer, as discussed earlier in the report.25,77,78 In the majority of cases, the ranking order of cost 

estimates for cancer types using these two methods was similar. 

As discussed in Section 3, data limitations may affect the ability to accurately quantify economic costs 

associated with cancer health disparities. Although COIs have been used since the 1960s to assess the 
30 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

relative burden of diseases, there remain several challenges with using the COI methodology in general 

and specifi cally for estimating the cost of cancer health disparities. These issues are discussed below and 

potential solutions are offered:

■ Traditional COI approach does not capture all aspects of the burden of illness: Estimates of economic

costs based on the human capital approach exclude the burden of illness related to intangible costs 

that result from reduced functioning, pain and suffering, and deterioration in other dimensions of 

HRQL, including emotional and psychological impacts on families, friends, and co-workers. The 

WTP approach has the advantage that it does capture intangible costs, which makes it possible to 

assess the quality of life as well as the economic consequences of disease or treatment.79 A potential 

solution is to perform an extended COI study80 that combines the WTP approach and general COI 

approach. For instance, the human capital approach is applied to assess the tangible costs, while the 

intangible costs can be valued by the contingent valuation (CV) using the restricted WTP.81

■ Prevalence estimates versus incidence estimates. COI studies can be performed using either 

prevalence- or incidence-based methods. The prevalence method estimates the consequences and 

costs incurred during a year or specifi ed time period. For instance, this approach tallies all health care 

costs in a year associated with cancer diagnosis. The incidence method sums the direct and indirect 

costs of disease from its onset in a base year and for every subsequent year over the natural course 

of the disease. The total cost of disease equals the discounted sum of illness-related events over the 

lifetime of each individual with the disease. Incidence-based costing is based on life-cycle costs and 

therefore provides a more complete picture of the patient-level costs and baseline total costs against 

which new interventions can be assessed.82 But the incidence-based method requires a considerable 

amount of data, such as disease incidence, survival rates, long-term morbidity, and lifetime impact 

on employment.69,83 The prevalence method which has less extensive data requirements, is more frequently used than the incidence-based method84 and does provide useful estimation of the potential 

magnitude of the cost burden. 

■ Use of COI for policy assessment. While COI studies have some infl uence in establishing the magnitude of the burden, a number of economists and analysts have questioned the usefulness of the 

COI methodology as a guide to resource allocation compared with methods that assess both costs 

and benefi ts. Their criticism is that COI studies point to the areas of greatest economic burden—but 

cannot suggest the most cost-effective manner to reduce it.85,86

■ Assigning costs to a specifi c disease. Many patients have more than one disease/condition simultaneously, such as cancer and diabetes, or have other underlying risk factors, such as smoking or 

alcohol abuse. In such instances, it may be diffi cult to establish causality and to attribute costs to 

specifi c diseases. Faced with this scenario, researchers could choose to allocate costs on the basis of 

primary diagnosis only, or to develop methods of allocating costs to comorbidities or contributory 

conditions. In addition, the collection and use of mortality data in estimating the burden of illness 

poses a challenge, since disease-specifi c mortality rates are based on the systemic coding of causes of 

death, and competing-risks effects can make interpretation of mortality data diffi cult.26 For example, 

the cause of death in a patient with multiple diagnoses may not be clear or correctly stated. 

■ Variation in burden and cost by type of cancer. There is wide variation in the total cost burden and 

the distribution between direct and indirect costs among different types of cancers. For instance, the 

direct health care costs for colorectal cancer is estimated at more than $3.5 billion, compared with 

about $0.5 billion for ovarian cancer.25 The person-years lost from cancers vary from about 2.2 million for lung cancer to 130,000 for oral cancers. 25 Given these large differences, reporting total costs 

associated with all cancers will mask important information on specifi c cancers—information that 

policy makers require. Therefore, providing both cancer-specifi c costs and the total burden related to 

all cancers is useful.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 31

Given these challenges, it is critically important to develop a theoretically sound framework based on 

the principles discussed above to guide the cost estimation process and to ensure the generation of valid 

and reliable estimates of costs related to cancer health disparities. In addition, systematic data on patient 

outcomes associated with health disparities is also required in order to perform valid cost-effectiveness 

assessments. 
32 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

he assessment of the economic burden of cancer provides a monetary 

value of the benefi ts of reducing cancer disparity but this does not provide 

information required to assess the cost and benefi ts of various approaches 

to reduce or eliminate cancer disparities. In this section, an in-depth discussion is 

provided on the importance of and approaches to assessing the cost-effectiveness of 

interventions to reduce cancer health disparities.

T

Benefi ts and Costs of Policies 

to Reduce Cancer Health Disparities SECTION 5
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 33

5 .1 Why Economics Matters 

Resources available for delivering health care and other services are fi nite. Economic assessments are 

essential to identifying the burden of cancer (as discussed in sections 3 and 4). In addition, economic 

evaluations play a key role in determining selection of interventions and policy changes to improve cancer 

care and reduce cancer health disparities. Specifi cally, economic studies guide two important decisions:

■ Effi cient allocation of resources: Economic analysis allows the comparison of interventions to 

identify the ones that are the most cost-effective—that is, the interventions that provide the highest 

level of benefi ts for the resources expended; and,

■ Resource planning: Economic analysis provides information to assess the costs required in various 

budget periods—critical for the implementation of selected cost-effective interventions. 

Cost versus effectiveness comparisons are performed to identify effi cient interventions, and budget impact 

analyses are performed to facilitate and inform resource planning. These are discussed in detail below.

Comparing Cost and Effectiveness

The alternative scenarios used when comparing two interventions are provided in Figure 8. If the new 

intervention both saves costs and improves outcomes, it is favored; this principle is called dominance 

(SE quadrant). If the new alternative is more costly but yields better outcomes (NE quadrant), then additional assessment is required. And the new intervention is only cost-effective if the additional effectiveness justifi es its additional cost. 

There are three approaches to simultaneously considering the cost and effectiveness of an intervention: cost-effectiveness analysis, cost-benefi t analysis, and cost-utility analysis. In each of these three 

approaches, a ratio of the cost divided by the effectiveness units is generated and therefore results are 

presented as a cost per unit of effectiveness (see Table 5).

SOURCE: Ramsey, 2004.87

FIGURE 8 Cost Effectiveness Plane

NW

SW SE

NE

Existing intervention 

dominates

New intervention more 

effective, but more costly

New intervention more costly

New intervention less costly

New intervention 

more effective

New intervention 

less effective

New intervention 

dominates

New intervention less 

costly, but less effective
34 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Approach Cost Measure Effectiveness Measure Ratio

CEA Dollar Natural units

(Life years gained)

Cost per unit life year 

gained

CBA Dollar Dollar Cost per $1 of benefi t

CUA Dollar QALY Cost per QALY

TABLE 5 Comparison of CEA, CBA, and CUA 

SOURCE: Gold, et al., 1996.23

■ Cost-effectiveness analysis (CEA): Consequences or effects of the intervention are expressed in 

natural units, such as years of life saved, lives saved, cases detected, cases successfully treated, or some 

other improvement that is due to the cancer care-related intervention. 

■ Cost-benefi t analysis (CBA): Both costs and benefi ts are expressed in monetary terms of net savings 

or a benefi t-cost ratio. A positive net savings or a benefi t-cost ratio greater than 1 indicates that the 

intervention saves money. 

■ Cost-utility analysis (CUA): Consequences are expressed as the utility or quality of the health outcome. CUA results are generally expressed as cost per QALY gained, recognizing that all life years 

are not equivalent and taking into account morbidity and HRQL impacts. 

The majority of the studies assessing cancer care interventions are based on CUA where the cost per 

QALY is presented. Due to the chronic nature of the disease process and the substantial impact on HRQL 

of the patients, cancer assessments are appropriately focused on years of life adjusted for quality. CUA 

is overall the most appropriate method for assessing cost-effectiveness of cancer interventions. CEA 

is sometimes performed instead of CUA because of a lack of information on HRQL impacts. Survival 

time or mortality rate can be used as the effectiveness measure to calculate the cost-effectiveness ratio. 

The Think Tank panel recommendation was to use mortality, since this is a more reliable statistic than 

survival time. CBAs are rarely performed due to the challenge of quantifying both costs and benefi ts in 

monetary terms.

Budget Impact Analysis

Critics of the cost-effectiveness approach argue that CEA studies neglect the budget impact of the 

services or interventions under study, and therefore do not provide adequate information for implementing the interventions.88,89 The budget impact analysis involves the estimation of the cost of providing the 

selected intervention or health care service to the eligible population. For cancer screening services, the 

budget impact analysis will include the cost of screening tests, follow-up diagnostic tests, and treatments 

that will be required. The cost estimate can be projected for each budget period to facilitate decision 

making and allocation of resources. 

5 .2 Importance of Perspective in Economic Assessment

CEA can be undertaken from a number of different perspectives. The broadest and most comprehensive 

is the societal perspective, since it encompasses all costs and outcomes impacts. In the societal perspective all costs incurred, including indirect, direct and tangible costs, are included. Analyses performed from 

the payer perspective or the provider perspective considers a narrower range of costs and effectiveness 

measures. The fi ndings can differ based on the perspective selected, and therefore is an important methodological decision. The consensus is that all assessments should incorporate the societal perspective. The 

Panel on Cost-Effectiveness in Health and Medicine, a non-federal panel of experts convened by the U.S. 

Public Health Service (PHS), also endorsed this approach.90 If other perspectives need to be considered, 

these should be used in addition to the societal perspective.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 35

5 .3 Calculating Incremental Cost-Effectiveness Ratio 

The incremental cost-effectiveness ratio is required to evaluate the cost and benefi ts of the proposed intervention against the “gold standard”. Cost-effectiveness comparisons are most useful when the comparator 

being considered is the standard care, since this allows the decision maker to consider whether an innovation is better than the status quo. If there is no intervention in place, the comparator can be “no intervention.” When comparing two interventions—for instance, programs A and B where program A is more 

effective but also more costly—this ratio is simply the change in cost divided by the change in effectiveness 

of program A and B:

Cost Intervention A – Cost Intervention B

_________________________________

Effectiveness – Effectiveness

Intervention A Intervention B 

The resulting value is the cost to obtain each unit of increased effectiveness associated with program A. 

This incremental cost-effectiveness ratio for program A needs to be compared with the threshold for costeffectiveness ratios to consider recommending its use. When effectiveness is measured in terms of QALYs, 

a commonly used threshold for the cost-effectiveness of medical therapies is $50,000 per QALY. A costeffectiveness ratio above $50,000/QALY is usually considered not to be cost-effective while one below 

$50,000/QALY is generally accepted to be cost-effective. Rankings can also be made comparing cost-effectiveness ratios of the intervention under study to other health care services, using League tables.91 

5 .4 Characteristics of Potentially Cost-Effective Interventions

Not all interventions to reduce cancer health disparities will be cost-effective. Interventions that meet 

one or more of the following criteria are those most likely to be cost-effective:

■ High degree of disparity in targeted group. When there is a substantial disparity that needs to be 

overcome in the intervention population there is a lower chance of diminishing returns (an increase 

in cost required to obtain the same level of effectiveness); 

■ Highly effective intervention. Such an intervention could be cost-effective even at a high cost; and,

■ Low cost of intervention. A low-cost intervention would potentially be cost-effective even if it was 

not highly effective, since the cost per unit will be low.

The key driver overall is the disparity that exists in the underlying population—that is, the extent of the 

benefi ts to be realized. If there are signifi cant benefi ts to be gained from an intervention then even an 

intervention that is costly can prove to be cost-effective. For example, if minority group X has a mortality 

rate of 30% while the norm is 5%, then even a costly program can be cost-effective because of the potentially large incremental effectiveness if the mortality for the minority population can be improved to the 

norm (30%-5%=25% reduction). On the other hand, a mortality rate of 8% for the minority group would 

only result in a small incremental benefi t (8%–5%= 3% reduction) which may not justify the use of an 

expensive program. In this later case, the intervention will have to be highly effective and inexpensive to 

be cost-effective.

5 .5 Provider Incentives and Barriers to Change

The cost-effectiveness of a given intervention needs to be considered in the context of the budget impact 

to the payer. Short-term cost impacts versus long-term benefi ts can hinder coverage for preventive and 

screening services, since many insurers only insure patients for a short period of time. Under this scenario, costs are immediate and measurable while the savings are long-term and hard to measure.92 Therefore, payers may be unwilling to cover high-cost preventive services whose benefi ts may not be realized 

by the insurer. Insurers are often reluctant to pay for screening for diseases that are not likely to present 

until someone else covers the patient. As an illustration, HMOs may be reluctant to pay for colonoscopy 

screening for people aged 50 to 55 because these individuals are more likely to get colon cancer after age 

65, when they will be covered by Medicare.
36 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

lthough health care disparities in cancer have been clearly documented, 

there is still a need to further understand the complex, multifaceted 

nature of these disparities. The participants addressed the economic 

consequences of cancer health disparities and made numerous recommendations 

of cost-effective interventions for eliminating them. The recommendations are 

summarized below in two subsections—research and policy. 

A

Recommendations 

and Research Agenda SECTION 6
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 37

6.1 Research Recommendations

The Think Tank participants recommended seven specifi c areas where additional research is needed in 

order to direct future initiatives aimed at eliminating disparities. 

1. Focus on cancers with modifi able attributes and fund prospective clinical trials to evaluate primary 

prevention strategies. There was consensus that resources and effort should be focused on those cancers 

that are highly preventable and curable: lung cancer through primary prevention activities aimed at 

smoking prevention and cessation; cervical and colon cancer through both primary prevention and 

secondary prevention (screening); and breast cancer through secondary prevention only. Colon, breast, 

and lung cancer are also among the cancers with the highest economic burden. Targeted interventions 

to promote primary and secondary prevention of these priority cancers may help ensure that limited 

resources are expended on the most benefi cial activities. In addition, the interventions should be targeted at groups that have the highest need (e.g., high incidence of lung cancer, low screening rates for 

colon, breast, and cervical cancer), since these interventions are most likely to have a high impact in 

reducing cancer health disparities and prove to be cost-effective. 

2. Study processes to develop improved data sources. Better data are required to analyze both outcomes 

and cost assessments. Databases that allow for comprehensive assessments of disparities in outcome 

and their cost impacts for younger (under 65 years) and older (over 65 years) patients are required. 

Specifi cally, there are limited data on individuals younger than 65 years and an urgent need to develop 

better data sources for this population. In addition, the scope and timeliness of data collection within 

cancer registries and other sources should be enhanced, with particular attention to indicators of 

socioeconomic status (e.g., education level and income). This would allow future analyses of disparities to sort out more decisively the association of racial/ethnic variables and SES on observed differentials in the receipt of cancer care, health outcomes, and costs. A number of efforts are currently 

underway to improve the quality of cancer data available including the NCI-Department of Veterans 

Affairs Cancer Care Outcomes Research and Surveillance Consortium (CanCORS), NCI’s HMO 

Cancer Research Network, NCI’s Prostate Cancer Outcomes Study (PCOS), and CDC’s Pattern of 

Care (PoC) studies. A joint, national-level effort—involving the NCI, CDC, Agency for Healthcare 

Research and Quality (AHRQ) and other major cancer organizations such as the American Cancer 

Society, the American College of Surgeons’ Commission on Cancer, and the American Society of 

Clinical Oncology—is necessary to build an enduring, ever-improving cancer data infrastructure. 

3. Develop better methods and tools to measure disparities. Although studies have been performed to 

understand cancer health disparities, it is a complex fi eld with overlapping sets of determinants (such 

as race, sex, education, etc.) and this poses signifi cant challenges in developing an appropriate defi nition of disparity. Additional research is required to develop methods to assess the role of these overlapping determinants. Some promising initial work in this area has been sponsored by NCI.2

4. Assess geographic variation and other factors that result in disparities. Additional research, both 

qualitative and quantitative, should be conducted at the community and neighborhood levels to 

identify factors that lead to differences in cancer health disparities, and studies need to be initiated 

to analyze interventions that can reduce the disparities in a cost-effective manner. The availability of 

health care infrastructure to perform timely diagnosis and offer optimal cancer treatments at highquality health care centers should be assessed. Currently available databases should be better utilized 

to assess these geographic variations and, in the future, the datasets to be developed under research 

recommendation #2, can be used to further enhance our understanding of these geographic factors.

5. Include cost-effectiveness assessments in clinical trials and other intervention studies that address 

disparities. The collection of economic data should be systematically included in clinical trials or any 

other type of studies when such data will contribute to answering meaningful research hypotheses that 

have policy relevance. There is currently a gap in our knowledge of whether resource use and costs vary 
38 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

systematically across population groups. The collection of such information is critical to performing 

cost-effectiveness assessments that provide valid and reliable estimates. Efforts should be made to include 

SES so issues surrounding disparities can be studied.

6. Identify changes in the health care delivery system that can reduce the economic burden of cancer 

health disparities. Research is needed to identify which types of inequalities within the health care 

delivery system that, if corrected or eliminated, can have the most impact in reducing disparities. This 

research would assess which interventions—primary prevention, screening, treatment, or surveillance 

after curative treatment—may provide the most cost-effective approaches to eliminating cancer health 

disparities.

7. Initiate studies to quantify uncompensated cancer care. Reliable data and accurate methods to assess 

the economic costs of uncompensated care are lacking. Research should be undertaken to evaluate 

alternate methods and to develop data sources that can yield valid estimates. Capturing this information 

in a reliable manner would provide a more complete assessment of the burden of cancer and provide 

policy makers with information to guide funding decisions. 

6.2 Policy Recommendations

Based on what is currently known about cancer disparities and their determinants, the Think Tank 

participants offered specifi c recommendations for developing policies at the federal, state, and community 

levels to eliminate cancer health disparities. We summarize these under fi ve broad categories: improving 

and expanding insurance coverage; ensuring adequate payment for cancer care; reducing geographic disparities through community-level initiatives; eliminating health care network disconnects; and promoting primary prevention.

1. Improve and expand current insurance coverage. The uninsured are at higher risk for being diagnosed 

with cancers at late stages and are less likely to obtain optimal treatments. Expansion of coverage and 

improvement in the quality of coverage are required especially for those with cancer or suspicious 

fi ndings suggesting cancer (such as the Breast and Cervical Cancer Prevention and Treatment Act of 

2000). The specifi c recommendations related to expansion of insurance coverage are as follows: 

■ Providing insurance coverage to the uninsured;

■ Studying the impact of out-of-pocket costs, especially for low-income individuals, on cancer 

related care;

■ Reforming public health programs to offer long-term coverage for low-income adults, including 

changing eligibility to be based on income rather than welfare categories. Medicaid enrollment tends 

to be sporadic and this discontinuity needs to be eliminated to improve access and timely diagnosis 

of cancers; and,

■ Modifi ng the Medicare waiting period for patients under 65 years with cancer to qualify for Medicare 

disability coverage while undergoing treatment (it is currently 12 months). CMS and NCI should 

initiate a demonstration project to assess approaches to decreasing the waiting period.

2. Sponsor health policy research to assess the impact of cancer payments on quality of care. The Think 

Tank participants discussed the importance of performing rigorous studies to understand whether 

current payment policies infl uence treatment patterns or the quality of cancer care received. In addition, studies are required to assess whether there are payment policy-related differences in process and 

outcome measures among population groups. Specifi c recommendations include:

■ Formulating collaborative study with NCI and CMS input to assess impact of payment policies on 

cancer health disparities; and

■ Sponsoring additional studies through grant funding (issue an RFA) to explore the impact of payment policies and cancer health disparities. 
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 39

3. Reduce geographic differences through community-level interventions. There are substantial inequalities in both cancer incidence and mortality by geographic location. These disparities are best addressed 

through interventions at the community level as interventions can be tailored to match communities’ 

needs. Examples of interventions include: 

■ Creating community-based participatory education, training, and research among underserved 

populations. These networks can help improve access and provide the cancer services required to 

eliminate the disparities;

■ Using lessons learnt from research recommendation #4, foster community-based interventions in 

locations the target audience frequents—for instance, at schools, churches, and other community 

gathering places (supermarkets, barber shops, salons); 

■ Encouraging health policy research and researchers at the community level; 

■ Conducting research to assess the effectiveness of using cancer survivors in the community to serve 

as advisors/navigators so that individuals receive information on cancer care services from someone 

they trust; and,

■ Developing initiatives to ensure that providers receive high-quality training and that offer incentives to promote the availability of minority health care providers in the community. Ensuring that 

providers understand the culture and speak the languages prevalent in the community is essential for 

providing optimal cancer care services. The standard of care can also be improved by ensuring that 

providers maintain evidence-based quality standards.

4. Eliminate health care network disconnects. For minority populations and disadvantaged community groups, system barriers in the form of fragmentation of care can lead to sustained disparities in 

cancer care services. Interventions to improve the connection between various entities in the health 

care delivery process (primary care physicians, specialists, surgeons, etc.) and adoption of measures 

to ensure that individuals receive the services required will greatly reduce cancer disparities. Several 

interventions can be adopted to eliminate health care network disconnects:

■ Introduce patient “navigators” to the community. These navigators will assist patients with cancer 

and their families through the services, programs, and resources in the community. The goal of the 

navigator is to ensure that patients receive timely and appropriate care. The patient navigator can 

assist patients and their families by arranging fi nancial support, securing transportation to health care 

providers and arranging child care, identifying and scheduling appointments with culturally-sensitive 

caregivers who can communicate with the patient, and coordinating care among providers. However, 

studies are needed to evaluate a number of issues related to the effectiveness, cost, and cost-effectiveness of navigation for specifi cally defi ned populations. 

■ Foster formal arrangements between primary care or community health centers and high-quality 

hospitals. This will ensure that all cancer patients can be referred to appropriate health centers to 

receive services required. These can be achieved through targeted delivery system interventions:

(a) Establishing PBRNs to encourage providers working together to do research in a community setting. These initiatives will lead to increased understanding of the potential health care disconnects and community-specifi c needs to improve the cancer care provided. Demonstration projects 

to test the impact of these networks on reducing cancer health disparities should be conducted. 

Such a demonstration could, for instance, be conducted through the Primary Care (PBRNs) 

and Integrated Delivery System Research Networks (IDSRNs) funded by AHRQ. Assessments 

of these networks offer the opportunity to collect and analyze the impact of indirect costs to 

patients. 

(b) Creating linkages between community cancer centers and high-quality medical centers to ensure 

that residents receive good follow-up care. Often, cancer patients from disadvantaged communities do not have access to quality cancer care. Establishing relationships with accredited cancer 

care centers may ensure the availability of high-quality services and may help recruit minorities 

to participate in clinical trials. 
40 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

5. Promote primary prevention. Promote primary prevention for cancer sites where evidence exists supporting primary preventions. Primary prevention activities targeted at smoking, diet, exercise, hepatitis 

vaccine, and HPV vaccine can be highly effective in reducing overall cancer health disparities. To be 

successful, these interventions must:

■ Target communities where disparities exist;

■ Focus on cost-effective interventions such as smoking prevention and cessation; and

■ Impact both demand and supply level factors whenever possible. For example, foster a reduction in 

youth smoking with stronger school-based education programs (demand-side) and stricter enforcement of laws banning sales to minors (supply side). 

A number of specifi c next steps were identifi ed for NCI to implement based on the list of research areas 

and recommendations. First, convene a panel of experts to identify a detailed process to improve both the 

epidemiological and cost data available to study and assess measures to reduce cancer health disparities. 

Second, sponsor studies to develop better methods to measure cancer health disparities and evaluate costs 

associated with cancer health disparities. Third, include cost-effectiveness assessments in any clinical 

trials or interventions sponsored by NCI to reduce cancer health disparities. Fourth, coordinate activities 

with other federal agencies to implement initiatives to reduce cancer health disparities. 
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 41

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(2004): 72-7.

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Using Data Relevant to Healthy 

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Objectives.” NCI Cancer Surveillance Monograph Series, Number 

6. Bethesda, MD: National 

Cancer Institute, 2005. NIH 

Publication No. 05-5777.

3. Center to Reduce Cancer Health 

Disparities (CRCHD). “Cancer 

Health Disparities: Fact Sheet 

2004.” 2004.

4. Offi ce of Management and 

Budget. “Revisions to the 

Standards for the Classifi cation 

of Federal Data on Race and 

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5. United States Census Bureau. 

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“The National Cancer Program: 

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8. Thorpe, K. “What Would Be 

the Cost of Eliminating Cancer 

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11. Schoen, C. “Where Can Policy 

Make a Difference? Addressing 

Insurance Related and Geographic Disparities in Cancer 

Care.” The Economic Costs of 

Cancer Health Disparities Think 

Tank. 2004.

12. Mullins, C. D., Blatt, L., 

Gbarayor, C. M., Yang, H. W., 

Baquet, C. “Health Disparities: 

a Barrier to High-Quality Care.” 

Am J Health Syst Pharm 62, no. 18 

(2005): 1873-82.

 13. The Commonwealth Fund. Biennel Health Insurance Survey, 2003. 

New York, NY: The Commonwealth Fund, 2003.

14. Leight, W. A., Lillie-Blanton, M., 

Martinez, R. M., Collins, K. S. 

“Managed Care in Three States: 

Experiences of Low-Income African Americans and Hispanics.” 

Inquiry 36, no. 3 (1999): 318-31.

15. O’Malley, A. S., Forrest, C.B., 

Feng, S., Mandelblatt, J. “Disparities Despite Coverage: Gaps 

in Colorectal Cancer Screening 

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Arch Intern Med 165, no. 18 

(2005): 2129-35.

16. Singh, G. K., Miller, B. A., 

Hankey, B. F., Edwards, B. K. 

“Persistent Area Socioeconomic 

Disparities in U.S. Incidence of 

Cervical Cancer, Mortality, Stage, 

and Survival, 1975-2000.” Cancer

101, no. 5 (2004): 1051-7.

17. Ayanian, J. Z., Zaslavsky, A. M., 

Guadagnoli, E., Fuchs, C. S., 

Yost, K. J., Creech, C. M., Cress, 

R. D., O’Connor, L. C., West, 

D. W., Wright, W. E. “Patients’ 

Perceptions of Quality of Care 

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18. Grau, A. M., Ata, A., Foster, L., 

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A. S. “Effect of Race on LongTerm Survival of Breast Cancer 

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19. National Cancer Institute. 

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46 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Cost: resources spent to purchase 

services or other resources including direct, indirect, and intangible 

components. 

Cost analysis: economic evaluation 

that focuses on the costs of the 

intervention and does not consider 

health outcomes. 

Cost-benefi t analysis (CBA): 

economic analysis in which both the 

inputs to produce the intervention (or 

costs) and its consequences or benefi ts 

are expressed in monetary terms of net 

savings or a benefi t-cost ratio. 

Cost-effectiveness analysis (CEA):

economic analysis in which the consequences or effects of the intervention 

are expressed in natural units such as 

years of life saved, lives saved, cases 

screened, or cases successfully treated.

Cost-minimization analysis (CMA): 

When two alternatives have been 

shown to have equivalent clinical 

effectiveness, only their costs need 

to be compared to identify the most 

economically desirable alternative.

Cost-of-illness study (COI): analysis 

that computes the total costs incurred 

by society as a consequence of a specifi ed health care problem, typically 

including both the direct and the 

indirect costs—such as medical costs 

and lost productivity—associated with 

an illness. There is no comparison of 

treatment alternatives. 

Cost-to-charge ratio: method of 

estimating cost based on charges and 

assumed distribution of costs per 

unit charge. 

Cost-utility analysis (CUA): economic analysis in which the consequences are expressed as the utility 

or quality of the health outcome. 

CUA results are generally expressed 

as cost per quality-adjusted life year 

(QALY) gained, recognizing that 

all life years are not equivalent and 

taking into account pain, discomfort, 

and other factors. 

Contingent valuation (CV): method 

involves directly asking people, in 

a survey, how much they would be 

willing to pay for specifi c services. It is 

called “contingent” valuation, because 

people are asked to state their willingness to pay, contingent on a specifi c 

hypothetical scenario and description 

of the service.

Direct costs: medical and nonmedical 

costs associated with the provision of 

medical services for the prevention, 

diagnosis, treatment, followup, rehabilitation, and palliation of illness. 

Discount: adjustment in benefi t or 

cost in the future relative to benefi t 

and cost in the present. 

Effectiveness: measurement of treatment effect in the population in the 

“real world” setting. That is, based 

on patient care received outside of a 

clinical trial. 

Effi cacy: measurement of treatment effect based on fi ndings from a 

controlled setting such as within the 

context of a randomized clinical trial. 

Final Outcomes: health outcomes 

that are measures in terms of mortality, morbidity, and health-related 

quality of life.

Incidence-based model: quantifi es the 

total lifetime costs of new cases of an 

illness with onset in the base year.

Incremental cost-effectiveness:

difference in cost to achieve an 

additional amount of benefi t with a 

treatment strategy usually expressed 

in dollars per year of life gained. 

Incremental cost-utility: difference in 

cost to achieve an additional amount 

of quality-adjusted benefi t with a 

treatment strategy usually expressed in 

dollars per QALY gained. 

Indirect costs: cost associated with 

the morbidity or mortality of illness 

beyond the direct provision of care. 

Indirect institutional costs: costs 

associated with the operation of the 

institution not directly associated with 

patient care and for which a charge is 

not generated. 

Intangible costs: poorly defi ned 

costs associated with illness including 

pain and suffering and loss of 

companionship. 

Intermediate outcomes: interim 

measures of assessment of benefi t of an 

intervention (e.g., late stage diagnosis, 

lower rate of treatment success).

Life expectancy: average number of 

years of life remaining at a given age. 

Prevalence-based model: quantifi es 

economic costs by measuring all costs 

due to illness occurring within a given 

time period, usually a single year, 

regardless of the time of disease onset.

Glossary
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 47

Quality of life (QOL): social, physical, emotional, psychological, and 

general well-being of individuals, 

typically measured using standardized 

questionnaires or interviews, such as 

the SF-36, SF12 or EuroQOL (EQ5D). When assessed in the context of 

health and medicine, QOL is termed 

health-related quality of life (HRQL). 

Sensitivity analysis: process of assessing the change in expected value or 

threshold values based on variation 

of the probabilities or outcome values 

assumed in a decision model over a 

range of possible values. 

Threshold: value of a variable evaluated in a sensitivity analysis where 

the expected values of the decision 

choices are exactly equal. 

Utility: measured patient preference 

for a given health outcome state.

Willingness-to-pay analysis: measures 

the amount an individual is willing to 

pay to acquire some good or service. 

This approach is used in performing 

CBA.
48 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Speakers

Harold Freeman, M.D.

Director, Center to Reduce Cancer 

Health Disparities

National Cancer Institute

6116 Executive Blvd., Suite 602

Rockville, MD 20854

Phone: 301-594-1027

Fax: 301-435-9225

Email: hfreeman@mail.nih.gov

Martin Brown, Ph.D.

Chief, Health Services and 

Economics Branch

National Cancer Institute

Executive Plaza North

6130 Executive Blvd. Room 4000

Rockville, MD 20852

Phone: 301-496-5716

Fax: 301-435-3710

Email: brownm@dcpcepm.nci.nih.gov

Mark McClellan, M.D., Ph.D.

Director, Center for Medicare and 

Medicaid Services

200 Independence Ave SW

Suite 314 G

Washington, DC 20201

Phone: 202-690-6726

Email: mark.mcclellan@cms.hhs.gov

Scott Ramsey, M.D., Ph.D.

Fred Hutchinson Cancer 

Research Center

1100 Fairview Ave. North, M2-B230

Seattle, WA 98109

Phone: 206-667-7846

Fax: 206-667-7264

Email: sramsey@fhcrc.org

Jeanne Ringel, Ph.D.

Economist, RAND Corporation

1700 Main St

P.O. Box 2138

Santa Monica, CA 90407-2138

Phone: 310-393-0411 Ext. 6626

Email: ringel@rand.org

Cathy Schoen, M.S.

Vice President, 

The Commonwealth Fund

One East 75th St.

New York, NY 10021

Phone: 212-606-3800

Email: cs@cmwf.org

Kenneth Thorpe, Ph.D.

Professor and Chair,

Rollins School of Public Health

Emory University

1518 Clifton Rd., NE

Atlanta, GA 30322

Phone: 404-727-3373

Fax: 404-727-9198

Email: kthorpe@sph.emory.edu

Participants

Stuart Altman, Ph.D.

Professor,

The Heller School

Brandeis University

P.O. Box 549110/ MS 035

Waltham, MA 02454-9110

Phone: 781-736-3803

Email: altman@brandeis.edu

Peter Arno, Ph.D.

Professor, Department of 

Epidemiology and Population Health

Montefi ore Medical Center

Albert Einstein College of Medicine

111 East 210 Street

Bronx, NY 10467

Phone: 718-652-4631

Email: parno@montefi ore.org

Peter Bach, M.D.

Assistant Attending Physician, 

Memorial Sloan-Kettering Cancer 

Center

1275 York Ave

New York, NY 10021

Phone: 646-735-8137

Fax: 646-735-0011

Email: bachp@mskcc.org

Cathy Bradley, Ph.D.

Associate Professor, Department 

of Medicine

Michigan State University

Tower B

B413 Clinical Center

East Lansing, MI 48824-1313

Phone: 517-732-3405

Email: bradle81@msu.edu

Mark Clanton, M.D., MPH

Deputy Director,

Offi ce of Cancer Care 

Delivery Systems

National Cancer Institute

31 Center Drive, Building 31/10A03

Bethesda, MD 20892

Phone: 301-451-1315

Email: mark.clanton@nih.hhs.gov

Craig Earle, M.D., M.S.c

Department of Health Policy 

& Management

Dana Farber Cancer Institute 

454-STE 21-24

44 Binney Street

Boston, MA 02115

Phone: 617-632-5564

Fax: 617-632-2270

Email: craig_earle@dfci.harvard.edu

Economic Costs of Cancer Health Disparities Think Tank - Center to Reduce 

Cancer Health Disparities

National Cancer Institute • December 6-7, 2004

Appendix A Final Participant List
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 49

Sam Harper, MSPH

Center for Social Epidemiology 

and Population Health

School of Public Health

University of Michigan

Ann Arbor, MI 48104-2548

Phone: 734-615-9224

Fax: 734-998-0006

Email: sbharper@umich.edu

Stephen Katz, M.D., Ph.D.

Director, National Institute of 

Arthritis and Musculoskeletal 

and Skin Diseases

Bldg. 31, Room 4C32

31 Center Dr. - MSC 2350

Bethesda, MD 20892-2350

Phone: (301) 496-4353

Fax: (301) 402-3607

Email: katzs@mail.nih.gov

Raynard Kington, M.D., Ph.D.

Deputy Director

National Institutes of Health

1 Center Drive

Bethesda, MD 20892

Phone: 301-496-7322

Fax: 301-402-2700

Email: kingtonr@od.nih.gov

William Lawrence, M.D., M.S.

Agency Health and Research 

Quality/COE

540 Gaither Road, Suite 6024

Rockville, MD 20850

Phone: 301-427-1517

Fax: 301-427-1520

Email: william.lawrence@ahrg.hhs.gov

Joseph Lipscomb, Ph.D.

Professor, Dept. of Health Policy 

& Management

Rollins School of Public Health

Emory University

1518 Clifton Road NE, Room 642

Atlanta, GA 30322

Phone: 404-727-4513

Fax: 404-727-9198

Email: jlipsco@sph.emory.edu

James Lubitz, MPH

Acting Chief, Aging and Chronic 

Diseases Statistics Branch

National Center for Health Statistics

Center for Disease Control 

& Prevention

3311 Toledo Road, MS 6209

Hyattsville, MD 20782

Phone: 301-458-4354

Fax: 301-458-4037

Email: jlubitz@cdc.gov

John Lynch, Ph.D.

Associate Professor, Epidemiology 

Department

School of Public Health 

University of Michigan

1214 S University, Room 236

Ann Arbor, MI 48104-2548

Phone: 734-615-9211

Fax: 734-998-0006

Email: jwlynch@umich.edu

Willard Manning, Ph.D.

Professor, University of Chicago

1155 E. 60th Street., #1176

Chicago, IL 60637

Phone: 773-834-1971 or 

73-702-2067

Fax: 773-702-1979

Email: w-manning@uchicago.edu

Ernest Moy, M.D., MPH

Senior Research Scientist,

Center for Outcomes and 

Effectiveness Research

Agency for Healthcare Research 

and Quality

540 Gaither Road, 6th Floor

Rockville, MD 20850

Phone: 301-427-1329

Fax: 301-427-3211

Email: ernest.moy@ahrq.hhs.gov

Gerald Riley, MSPH

Social Science Research Analyst,

Center for Medicare and Medicaid 

Services

7500 Security Blvd., MS C3-20-17

Baltimore, MD 21244-1850

Phone: 410-786-6699

Fax: 410-786-5534

Email: griley@cms.ggs.gov

Brian Smedley, Ph.D.

Program Director, Institute 

of Medicine

The National Academies

500 Fifth Street, NW

Washington, DC 20001

Phone: 202-334-1755

Email: bsmedley@nas.edu

Robert Topel, Ph.D.

Professor, University of Chicago

1101 East 58th Street

Chicago, IL 60637

Phone: 773-702-7524

Fax: 773-702-2699

Email: robert.topel@gsb.uchicago.edu

Observers

Richard Bragg, Ph.D.

Minority Health Services 

Research Coordinator,

Offi ce of Research, Development, 

& Information

Research and Evaluation Group

Centers for Medicaid & Medicare 

Services

7500 Security Boulevard, 

MS C3-19-07

Baltimore, MD 21244-1850

Phone: 410-786-7250

Fax: 410-786-5534

Email: richard.bragg@cms.hhs.gov 
50 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Dionne N. Burt

Program Specialist, Offi ce of the 

Director

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6043

Bethesda, Maryland 20892 

Phone: 301-594-1027

Fax: 301-480-1805

E-mail: burtd@mail.nih.gov

Kenneth C. Chu, Ph.D.

Chief, Disparities Research Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6025

Bethesda, Maryland 20892 

Phone: 301-435-9213

Fax: 301-435-9225

E-mail: chuk@mail.nih.gov

Jane MacDonald Daye, M.A.

Special Assistant & Public 

Health Advisor,

Offi ce of Director

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6041

Bethesda, Maryland 20892 

Phone: 301-594-5946

Fax: 301-435-9225

E-mail: dayej@mail.gov

Kaytura Felix-Aaron, M.D., MPH

Agency for Healthcare Research and 

Quality

540 Gaither Road

Rockville, MD 20850

Phone: 301-427-1395

Email: kfaaron@ahrq.gov

Roland A. Garcia, Ph.D.

Health Scientist Administrator,

Disparities Research Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6032

Bethesda, Maryland 20892 

Phone: 301-496-7072

Fax: 301-435-9225

E-mail: garciaar@mail.nih.gov

Michael C. Gibbons, M.D., MPH

Associate Director,

Johns Hopkins Urban Health Institute

Asst. Professor of Public Health and 

Medicine

Johns Hopkins Medical Institutions

111 Market Place, Suite 850

Baltimore, MD 21202

Phone: 410-895-1108

Fax: 410-895-1111

Email: mgibbons@jhsph.edu

Frank E. Jackson

Program Director,

Disparities Research Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6027

Bethesda, Maryland 20892 

Phone: 301- 496-8680

Fax: 301-435-9225

E-mail: fj12i@nih.gov

Julaine King, MPH

Contractor, Center to Reduce Cancer 

Health Disparities

National Cancer Institute

6116 Executive Blvd., Suite 602

Rockville, Maryland 20852

Phone: 301-402-2177

Fax: 301-435-9225

Email: kingju@mail.nih.gov

Francis X. Mahaney, Jr. 

Medical Writer/Public Health 

Advisor,

Disparities Research Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6031

Bethesda, Maryland 20892 

Phone: 301-435-9216

Fax: 301-435-9225

E-mail: fm58g@nih.gov

Tarsha M. McCrae, M.P.H., CHES

Public Health Analyst,

Health Policy Branch

Center to Reduce Cancer Health 

Disparities

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6030

Bethesda, MD 20892

Phone: 301-435-9211

Fax: 301-435-9225

E-mail: mccraet@mail.nih.gov

Arthur Meltzer, Ph.D.

Research Analyst,

Research and Evaluation Group

Offi ce of Research, Development, 

& Information

Centers for Medicare & Medicaid 

Services

7500 Security Blvd., MS C3-19-07

Baltimore, MD 21244-1850

Phone: 410-786-9976

Fax: 410-786-5515

Email: ameltzer@cms.hhs.gov 

Renee Mentnech, M.S.

Director, Division of Benefi ciary 

Research

Research and Evaluation Group

Offi ce of Research, Development, 

& Information

Centers for Medicare & Medicaid 

Services

7500 Security Blvd.

Baltimore, MD 21244-1850

Phone: 410-786-6692

Fax: 410-786-5515

Email: rmentnech@hcfa.gov 
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 51

Diane Merriman

Project Offi cer, Division of Health 

Promotion & Disease Prevention 

Demonstrations

Offi ce of Research, Development, 

& Information

Centers for Medicare & Medicaid 

Services

7500 Security Blvd., S3-02-01

Baltimore, MD 21244-1850

Phone: 410-786-7237

Fax: 410-786-6511

Email: dmerriman@cms.hhs.gov

Traci M. Mitchell

Program Assistant,

Offi ce of the Director

National Cancer Institute

 6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6044

Bethesda, Maryland 20892 

Phone: 301-435-9222

Fax: 301-435-9225

E-mail: mitchetr@mail.nih.gov

Emanuel A. Taylor, DrPH

Health Scientist Administrator,

Health Policy Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6036

Bethesda, Maryland 20892 

Phone: 301-594-6624

Fax: 301-435-9225

E-mail: taylorem@mail.nih.gov

Nadarajen A. Vydelingum, Ph.D.

Deputy Director,

Center to Reduce Cancer Health 

Disparities

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6045

Bethesda, Maryland 20852-8341 

Phone: 301-402-6837

Fax: 301-435-9225

E-mail: vydelinn@mail.nih.gov

Regina R. Washington, M.A., 

DrPH Candidate

Health Policy CRTA Fellow

Center to Reduce Cancer Health 

Disparities

National Cancer Institute

6116 Executive Boulevard

Rockville, Maryland 20852

Phone: 301-594-4909

Fax: 301-435-9225

Email: washinreg@mail.nih.gov

Barbara K. Wingrove, M.P.H.

Chief, Health Policy Branch

National Cancer Institute

6116 Executive Boulevard

Suite 602, MSC 8341, Rm 6033

Bethesda, Maryland 20892 

Phone: 301-451-8269

Fax: 301-435-9225

E-mail: wingroveb@mail.nih.gov
52 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Economic Costs of Cancer Health Disparities

Preliminary Grouping of Questions for the Think Tank

A. What is the total cost of cancer care?

■ What should the total cost of cancer care include? (e.g., see fl owchart, fi g. C-3, p. 62)

■ What economic models are applicable?

■ Cancer care is 5-7% of all health care expenditures. We project cancer to eclipse heart disease as 

the leading cause of death within a few years. What is the general impact of the disconnection 

between funding and burden of cancer on the society? What is the impact on sub-populations?

■ Costs attributable to cancer are numerous (e.g., costs related to comorbidity). How can that information be captured and used?

■ Are necessary data available to make economic impact evaluations? If not, how can additional 

data be collected?

B. What percent of the total cost of cancer care is related to health disparities?

 (Note: This might be estimated based on specifi c types of cancer or be reported as a % of GDP)

■ What are the economic costs of fi nding cancers later versus fi nding them earlier (all cancers and/or 

specifi c cancers)?

■ What additional information exists to inform these issues?

■ How do uncompensated costs, patient out-of-pocket costs, and charitable care relate to disparities?

■ Are necessary data available to make economic evaluations? If not, how can additional data be 

collected?

■ How many people are included in the “health disparities population(s)”?Specifi cally, how many 

people are included in the “cancer health disparities” population(s)?

■ What proportion of the “cancer health disparities population(s)” is uninsured? What percentage of 

them has cancer?

C. What would be the cost of eliminating cancer health disparities?

■ Is equal access to quality, standard cancer care cost-prohibitive or cost-effective for health care 

systems (both government and private)?

■ Is it economically feasible to treat every American with a cancer-related abnormality?

■ What additional information exists to inform these issues?

■ What economic models are applicable?

■ What are the estimates of costs to reduce delays in defi nitive diagnosis and followup after abnormal fi ndings for all Americans?

■ How can we capture the costs that would occur if the uninsured received early detection and 

treatment?

■ For both the individual and society, discuss cost>savings, cost = savings, and cost < savings. 

Sample costs for individuals include costs associated with morbidity and disability. Sample societal 

costs are lost productivity and missed opportunity for reduced economic burden of cancer.

■ How best to deal with the moral hazard concept?

■ From the perspective of total health care expenditures, early detection can be seen as increasing 

costs because screening programs are expensive and life expectancy is increased resulting in greater 

non-cancer-related health care costs over time. On the fl ip side, advanced screening leads to 

detection of many cases at stage zero, which can greatly reduce costs of cancer care. Also, there is 

some over-diagnosis leading to unnecessary treatment.

■ How much can savings in making screening more effi cient offset the costs of wider screening?

■ Much of the differential in colorectal treatment outcomes is associated with surgical technique. 

How can structural and cultural factors be overcome to increase access?

Appendix B Economic Costs—Discussion Questions
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 53

■ Are metrics to evaluate cost-effectiveness of health benefi ts (e.g., life years saved per dollar spent) 

too diffi cult and controversial to deal with?

■ What is an appropriate cost-effectiveness threshold for estimating cancer diagnostic and treatment 

options? Should the threshold(s) be set by type and stage of cancer?

■ Is quality-adjusted life years (QALY) an appropriate and reliable parameter in assessing cost-benefi ts 

of cancer treatment and diagnostic options?

D. What is the value to America to reduce cancer health disparities?

■ What are the benefi ts of reducing morbidity and mortality from cancer in the United States?

■ Are there economic advantages for primary care centers/hospitals, communities, and our country in 

creating easy access to cancer care?

■ What are the economic benefi ts of eliminating health disparities in the United States?

■ Is QALY an appropriate and reliable parameter in assessing cost-benefi ts of cancer treatment and 

diagnostic options?

■ The purpose of the health care system is not to save money but improve health. Should we examine the value gained in reducing cancer health disparities? 

■ Are cost-benefi ts of prevention higher in low socioeconomic status (SES) groups than high 

SES groups?

 E. What are the policy implications? What is the cost to change policies?

■ What health care system changes could reduce the costs of cancer care?

■ Can we develop cancer care models to reduce delays in and costs of care while still providing quality, standard cancer care on a timely basis? 

■ What research is needed to change policies?

■ Predictions of cost savings associated with improved cancer control are based on longer-term societal costs, but the short-term budget savings may not occur. How can this problem be dealt with so 

pragmatic changes in policy are made?

■ How can we make cancer interventions more accessible for all?

■ What cross-incentives between parts of the health care system are needed to ensure that stakeholders “do the right thing?”

■ Some stakeholders are reluctant to pay for screening for diseases that are not likely to present 

until the patient is covered by someone else (e.g., Medicare). What incentives exist to counter 

this disincentive?
54 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Economic Costs of Cancer Health Disparities:

Background Paper for Think Tank

The Center to Reduce Cancer Health Disparities

Harold P. Freeman, M.D., Director

December 6-7, 2004

National Cancer Institute

National Institutes of Health

Department of Health and Human Services

Appendix C Economic Costs—Background Paper
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 55

Economic Costs of Cancer Health Disparities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

1. What is the total cost of cancer care? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

2. What percent of the total cost of cancer care is related to disparities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

3. What would be the cost of eliminating cancer health disparities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

4. What is the value to America of reducing cancer health disparities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61

5. What are the policy implications of reducing cancer health disparities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62

6. What is the cost to change policies to reduce cancer health disparities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Types of Health Care Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Sources of Health Care Cost Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65

Measuring Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

List of Appendix Figures

Appendix Figure C-1: Causes of Health Disparities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

Appendix Figure C-2: The Cancer Care Continuum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

Appendix Figure C-3: Types of Health Care Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
56 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Economic Costs of Cancer Health Disparities

Because of the critical importance of eliminating or at least reducing cancer health disparities, there is a 

need to better understand the economic and human costs of such disparities to the nation. To address this 

critical need, the Center to Reduce Cancer Health Disparities (CRCHD) of the National Cancer Institute (NCI) is convening a Think Tank meeting December 6–7, 2004, to bring together health economists, cancer care providers, federal and private insurers, and policy experts to explore the economic costs 

to the nation of cancer health disparities and their implications for cancer control. The purpose of this 

document is to provide general background information, stimulate new and creative thinking about the 

economic costs of cancer health disparities, and share ideas about eliminating or reducing such disparities. This paper is not intended to defi ne all the issues or restrict innovative thinking. In considering the 

subject of economic costs of cancer health disparities, Think Tank participants are encouraged to “think 

outside the box.”

Overview

A critical disconnect exists between cancer research discovery and development and delivery of care to 

cancer patients. This disconnect between the phase when new knowledge is discovered and new interventions developed (i.e., what we know) and cancer care delivery, where the benefi ts of new discoveries should be delivered to the public (i.e., what we do), is a key factor leading to an unequal and unjust 

burden of cancer in our society. Receipt of cancer care is often delayed for some racial and ethnic minorities, people with low socioeconomic status (SES), those who live in rural and inner-city areas, and other 

medically underserved groups. Closing the gap between cancer research discovery/development and care 

delivery will help reduce cancer health disparities in America.

Although few individuals in America who are diagnosed with cancer go untreated, delays in receiving 

screening, diagnosis, and treatment for cancer are experienced to a greater degree by underserved communities, including some racial and ethnic minorities, the poor, those lacking health insurance coverage, and rural and inner-city communities.1

 These delays, in addition to cultural barriers, poverty, social 

injustice, and decreased access to all phases of cancer care compound disparities in care and result in 

higher cancer morbidity and mortality in those populations. A complex set of social, economic, cultural, 

Causes of Health Disparities

Prevention Early 

Detection

Diagnosis/

Incidence

Treatment Post Treatment/

Quality of Life

Survival 

and Mortality

Poverty/Low 

Economic Status

Social Injustice Culture

APPENDIX FIGURE C-1 Causes of Health Disparities
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 57

and health system factors are believed to drive delays in cancer care (Appendix Figure C-1). This is 

highlighted by a recent study on the racial and socioeconomic determinants of cancer health disparities2

, where 5-year survival for all cancers combined was 10% lower among persons living in poor areas 

compared to more affl uent U.S. Census tracts.

 The National Cancer Institute (NCI) has a legislative mandate to reduce the burden of cancer. In 2001, 

NCI issued a nationwide challenge “to eliminate the suffering and death due to cancer by 2015”3. Some 

racial and ethnic minorities and medically underserved populations bear a major portion of that suffering 

and death. The scientifi c community has a critical and unique role in addressing the moral and ethical dilemmas posed by the unequal burden of cancer in our society. We know that complex interactions 

among genetic susceptibilities and the risk imparted by individual and group behaviors, age, and social 

and environmental circumstances determine health throughout an individual’s lifespan, including who 

becomes ill, who survives disease, and who maintains good quality of life after diagnosis and treatment. 

However, the economic costs associated with these documented cancer health disparities have not been 

fully explored. In the United States, approximately 5% (7%, including screening) of total medical expenditures are due to cancer; while over 20% of all deaths are due to cancer.4

As Americans age and the absolute number of people treated for cancer increases, lack of access to timely 

and appropriate quality care is a growing problem. Barriers to cancer care lead to a cascade of problems 

that result in increased cancer care costs for the nation. For example, cancers diagnosed at Stage II or III 

are the most expensive to treat.5 Cancer cases that are the least expensive to treat are diagnosed at either 

very early (in situ or Stage I) or very late (Stage IV) stages. Addressing the gap between discovery and 

delivery may reduce the costs of cancer care.

The Think Tank is being asked to look at the many components of economic costs and how scarce 

resources of money and time could be allocated to maximize health and well-being. Potential outcomes 

of the Think Tank include: identifi cation of current evidence about the costs of cancer health disparities; 

assessment of currently available cost data and data needs; an estimate of the costs of providing cancer 

care (including preventive services, followup of abnormalities, and treatment) for all Americans who are 

currently unable to fully access standard cancer care; cost-effective strategies for improving timely access 

to care across the cancer continuum; and the economic benefi ts of eliminating disparities and improving timely access to cancer care. Based on fi ndings from the Think Tank, recommendations for future 

research programs and policies will be made to the NCI/NIH and other federal agencies. Products from 

the Think Tank may include an Executive Summary of the Think Tank meetings, a detailed report on 

Think Tank fi ndings and recommendations, scientifi c publications, and plans for future actions.

For discussion purposes, the remainder of this paper is divided into sections addressing the questions listed 

below. Members of the Think Tank are asked to have a dialogue that will include, but not be limited to, 

these topics.

1. What is the total cost of cancer care?

2. What percent of the total cost of cancer care is related to disparities?

3. What would be the cost of eliminating cancer health disparities?

4. What is the value to America of reducing cancer health disparities?

5. What are the policy implications of reducing cancer health disparities?

6. What is the cost to change policies to reduce cancer health disparities?

1. What is the total cost of cancer care?

Currently, health care costs are estimated to be 15% of the gross domestic product (GDP). Total spending for cancer care has continually increased over the last 30 years; however, the proportion of cancer 

spending to all health care expenditures has remained stable (i.e., 4.4% to 6% of total health expenditures).4

 Direct costs of cancer treatment accounted for about $41 billion in 1995, the most recent year 
58 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Failure in 

Access to 

Care

Failure to 

Screen

Failure 

during 

Followup of 

Abnormal 

Results

Failure during 

Followup of 

Diagnostic/ 

Treatment 

Plan

Failure to 

Followup 

Surveillance 

Plan

Failure to 

Access Care

Risk Assessment

Primary Prevention

Diagnosis

Treatment

Recurrence Surveillance

End-of-Life Care

Failure to 

Identify Need 

to Screen or 

Counsel

Primary 

Prevention 

Failure

Failure in 

Detection

Failure during 

Diagnostic 

Evaluation

Failure of 

Treatment

Failure in 

Surveillance

Failure in 

Surveillance

Potential Failures During Process of Care

➔

➔

➔

➔

➔➔➔

➔ ➔ ➔ ➔ ➔

➔

Screening/Detection

➔

for which there is information.6 This is just under 5% of total U.S. spending for medical treatment. The 

overall costs of treating cancer more than doubled between 1985 and 1995. These estimates of cost do 

not include out-of-pocket expenditures or prevention and screening costs. For example, Medicare does 

not cover certain cancer care expenses, such as common orally administered cancer medicines. Out-ofpocket costs add up to 10% to the estimates of the total cost of cancer treatment. Indirect costs, which 

include losses in time and economic productivity resulting from cancer-related illness and death, are 

not included in the above estimates. The total economic burden of cancer in 1996, including direct and 

indirect costs, was estimated to be $143.5 billion.6

The cost of cancer treatment varies by the type of cancer. Using data from the linked databases of 

Surveillance, Epidemiology, and End Results (SEER) and Medicare, expenditures for 1995 through 1998 

were examined for the 13 most common cancers.5 Treatment costs for the four most common cancers 

(i.e., breast, colorectal, lung, and prostate) were similar and ranged from 11% to 13% of total cancer 

expenditures. This represented $4.6 to $5.4 billion per year. However, the average cost of treatment for 

an individual with one of these 13 cancers varied widely, with individual average Medicare payments in 

the fi rst year following diagnosis ranging from $3,117 for melanoma to $32,340 for ovarian cancer.6

Cost also varies by the point in the continuum of cancer care at which expenditures are measured 

(Appendix Figure C-2). For example, fi rst-year costs of treatment are higher for lung and colorectal cancers because screening is not commonly used in their detection.5

 If screening for colorectal cancer were 

performed as recommended, extensive and costly treatment of advanced-stage disease could be reduced.

To fully answer any questions about the economic costs of cancer, it is important to identify types, sources, 

and measures of cost. Unanswered questions about measurement of cancer costs include: how do we 

APPENDIX FIGURE C-2 The Cancer Care Continuum19
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 59

measure the economic costs of fi nding cancers later versus fi nding them earlier? Are different methods used 

to look at the cost for all cancers compared to the cost for specifi c cancers? What is the appropriate costeffectiveness threshold for estimating cancer diagnostic and treatment options? Should this threshold be 

set by type and stage of cancer? Are QALYs appropriate and reliable parameters for assessing costs-benefi ts 

of cancer treatment and diagnostic options?

2. What percent of the total cost of cancer care is related to disparities?

One of the basic questions that must be answered in order to measure the cost of disparities is: how does 

one defi ne cancer health disparities? The NCI Center to Reduce Cancer Health Disparities uses the following defi nition:

“Disparities are determined and measured by three health statistics, incidence (the number of new 

cancers), mortality (the number of cancer deaths), and survival rates (length of survival following 

diagnosis of cancer). Health disparities occur when one group of people has a higher incidence or 

mortality rate than another, or when survival rates are less for one group than another. Disparities, or 

inequalities, occur when members of certain population groups do not enjoy the same health status as 

other groups. Disparities are most often identifi ed along racial and ethnic lines, showing that African 

Americans, Hispanics, Native Americans, Asian Americans, Alaska Natives, and whites have different disease rates and survival rates. But disparities also extend beyond race and ethnicity. For example, 

cancer health disparities can involve biological, environmental, and behavioral factors, as well as differences noted on the basis of income and education.”7

Cancer health disparities are often compounded by overlapping barriers to care. Underserved groups 

include some racial and ethnic minorities, people with low SES, those living in rural or inner-city areas, 

the underinsured and uninsured, and those with low health literacy. For example, in the United States, 

Hispanics have the largest percentage of uninsured persons, followed by blacks and then, non-Hispanic 

whites. Many low-income cancer patients not only live in rural or remote areas, but also are poor. Undocumented workers and their families rarely have insurance and often have low incomes. This can increase 

the complexity of measuring specifi c disparities and planning interventions. These overlapping categories 

also raise the issue of how many people are included in the health disparities population(s).

Current published research has not estimated the percentage of cancer care costs that are due to health 

disparities. However, several studies have found an association between late-stage cancer diagnosis and 

lack of insurance, low SES, and cultural barriers.8, 9 When cancers are diagnosed at Stage II or III, the cost 

of treatment is more expensive than for cases diagnosed at either very early (in situ or Stage I) or very late 

stages (Stage IV).5 In addition, uncompensated care, which includes charitable care, “safety net” services, 

and other types of uncompensated care provided by physicians, clinics, hospitals, and other providers, is 

often associated with cancers detected at late stages through emergency room visits by the poor. Reliable 

data on the economic cost of this uncompensated care are lacking.10

One method used to obtain more detailed cost data on health disparities is to link databases such as 

cancer registries (e.g., the SEER cancer registry) and administrative databases (e.g., Medicare). The SEERMedicare linked database is the major source for estimating cancer site-specifi c costs. Costs can be tracked 

longitudinally so they can be determined for different phases of cancer treatment.5 As an example, using 

the SEER-Medicare linked database, researchers reported that both total and cancer-related direct costs 

for treating black women were signifi cantly higher than for treating white women ($320 higher mean 

monthly cost), even after controlling for stage and treatment in all phases of care.11 The higher costs 

among black women may refl ect differences in care after a cancer diagnosis and/or unmeasured preexisting health problems.
60 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Changes in insurance status also give an indication of the effects of disparities on receipt of cancer services. An example is a study that examined the impact of Medicare coverage on the use of basic clinical 

services for previously uninsured adults.12 The study reported that the difference between continuously 

insured and continuously uninsured adults was signifi cantly reduced after they achieved Medicare eligibility. For specifi c cancer screening services, differences between the insured and uninsured in mammography use after Medicare eligibility decreased 15.3%. For prostate examinations in men, there was a 35.2% 

decrease in the difference between groups.

In order to examine economic cost issues, the following questions arise: what is the magnitude of cancer 

health disparities? How are cancer health disparities measured? Other persistent questions deal with the 

adequacy of existing cost data sources to address cancer health disparities. Do existing databases adequately cover individuals who lack access to services (e.g., uninsured, homeless, working poor) and/or use 

the health care system only intermittently? Are necessary data available to make economic evaluations? 

If not, what is missing and how can additional data be collected? What proportion of the underserved 

population is uninsured? Even if accurate and adequate cost data exist, do current economic metrics allow 

accurate measurement of the economic cost of disparities? Are the metrics to evaluate cost-effectiveness 

of health benefi ts (e.g., life-years saved per dollar spent) too complex and controversial to be useful in 

addressing the cost of cancer disparities? Are costs-benefi ts of prevention higher in groups with low SES 

compared to those with high SES?

3. What would be the cost of eliminating cancer health disparities?

Although we do not have an answer to this question, some researchers are using cost scenarios and cost 

modeling to evaluate the cost of cancer care. Key variables and assumptions made in estimating costs and 

benefi ts of an intervention are tested using sensitivity analysis.* An example of cost modeling is a recent 

study that examined whether the cost of increasing rates of breast cancer screening or the application 

of intensive breast cancer treatment would be offset by survival benefi ts for African American women.14

Using stochastic modeling, the researchers reported that the incremental cost† effectiveness of increased 

screening ranged from $50,000 to $120,000 per life-year saved (LYS). If all patients received the most 

intensive treatment recommended, costs would increase but deaths decrease. Small investments of up 

to $6,000 per breast cancer patient could be used to enhance treatment and still yield cost-effectiveness 

ratios of less than $75,000 per LYS. However, the assumptions and operational defi nitions of variables 

in these models must be stated clearly. Uninsured cancer patients may receive charity care, pay for all 

received care, or forgo care. This is consistent with the association of lack of health care insurance with 

late-stage cancer diagnosis.8 However, having health care insurance does not ensure access to cancer 

prevention and treatment services. Some insurance policies have only major medical coverage and do not 

cover many of the costs of cancer prevention and treatment. For those over age 65 without supplemental health insurance, Medicare is not a panacea for cancer costs. Until recently, Medicare did not cover 

prescription medications. This was particularly hard on the elderly poor. The economic impact of the new 

Medicare prescription law is still unknown.

The cost of health disparities is more than a matter of insurance coverage. Insurance coverage is necessary 

but is not suffi cient to prevent economic disparities. Other barriers to cancer care that result in delivery of 

less than optimal care include structural access and cultural issues. Creative strategies that improve access 

to cancer care services, decrease delays in cancer treatment, and provide care for those lacking adequate 

insurance coverage need to be explored. Along with medical interventions, these strategies might include 

patient navigation and primary prevention, such as smoking cessation and obesity prevention programs for 

targeted populations.

When choosing a methodology to measure economic cost, does one want to know the value gained from 

interventions versus the cost-effectiveness or cost-benefi t? Often the emphasis of economic analysis is on 

value gained (i.e., improvement in health), while common cost metrics focus on the monetary value of 
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 61

human life. Although typical cost-benefi t analyses look at reductions in mortality, these measures do not 

usually look at reduced morbidity. Eliminating or reducing cancer disparities may not be cost-saving or 

cost-neutral; however, it may be cost-effective relative to the social value of health.

For example, the costs of screening are large compared with the savings they achieve. Savings associated 

with early detection apply only to cancer-related costs. From the perspective of total health care expenditures, early detection can be seen as increasing costs, because screening programs are expensive and life 

expectancy is increased, resulting in greater noncancer-related health care costs over time. Insurers are 

often reluctant to pay for screening for diseases that are not likely to present until someone else covers 

the patient. As an illustration, HMOs may be reluctant to pay for screening colonoscopy for people aged 

50 to 55 because these individuals are more likely to get colon cancer after age 65, when they will be 

covered by Medicare. This is compounded by the fact that advanced screening leads to detection of many 

cases at Stage 0, which can greatly reduce costs of cancer care. However, with some cancers, there is an 

unknown amount of over diagnosis (e.g., prostate cancer), leading to unnecessary treatment and associated increased costs. What cross-incentives between different parts of the health care system are needed 

to ensure that stakeholders “do the right thing,” (i.e., choose cost-effective and cost-benefi cial options)? 

Are there economic advantages for primary care centers, hospitals, communities, and the nation in creating easy access to cancer care?

Gaps in our knowledge about the cost of eliminating cancer health disparities could be addressed 

through studies that ask the following research questions: is equal access to quality, standard cancer care 

cost-prohibitive or cost-effective for health care systems? Is it economically feasible to treat every American with a cancer-related abnormality? How do we demonstrate the benefi ts of reducing morbidity and 

mortality from cancer in the United States? What are the estimates of costs to reduce delays in defi nitive 

diagnosis and followup after abnormal fi ndings? If we make cancer screening of the underserved more 

effi cient, will the savings offset the costs of wider screening? 

4. What is the value to America of reducing cancer health disparities?

The purpose of the health care system is to improve health. However, differing perspectives about the 

value of reducing disparities exist in the United States. Personal and social values, preferences, personal 

wealth, and social wealth infl uence opinions about the social value of interventions and policies that 

reduce disparities. In the early 1990s, the Panel on Cost-Effectiveness in Health and Medicine, convened 

by the Offi ce of the Surgeon General, tried to address this issue.13 The committee could not reach defi nitive conclusions on measures of value.

As the value of reducing cancer disparities is examined, another issue to consider is the “moral hazard” 

concept under which insured individuals demand treatment for which costs exceed benefi ts. This might 

be interpreted as suggesting that it is cost-effective to allow large numbers of people to remain uninsured. 

It has been suggested that cost savings would be achieved if people did not stop smoking, because more 

people would die early. In addressing the issue of value and health costs, one can either avoid these types 

of issues, because they represent a political and moral “slippery slope,” or try to clarify issues and the value 

of care through open discussion. This raises several questions, such as: what is the best way to deal with the 

“moral hazard” concept? What is the economic value of having a healthy population? How does one identify and measure costs that refl ect the values to society of reducing/eliminating cancer health disparities?

* Sensitivity analyses identify key variables and assumptions that may alter conclusions from an economic analysis. The analysis is then 

 reworked using a range of results for each factor that infl uences the outcome.13

† Incremental cost is the cost of one alternative less the cost of another.13
62 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

5. What are the policy implications of reducing cancer health disparities?

The U.S. Department of Health and Human Services (DHHS) has as a national goal the elimination of 

health disparities (including cancer health disparities) by year 2010. This will require revisions to existing 

health policies and enactment of new ones. There have been debates about various recent health policy 

proposals, especially in this Presidential election year. But, policy changes could require adjustments at all 

levels of government. 

The growing population of people diagnosed with cancer raises important questions related to cost decisions, quality of care, long-term followup, health after cancer treatment, and health-related quality of life 

(HRQL) for vulnerable populations. Therefore, when examining policies aimed at reducing cancer health 

disparities, policy makers from government (local, state, and federal) and the private health industry 

need to be involved. When making decisions about allocation of medical resources, what policy changes 

could reduce the costs of cancer care while improving health? How does one include the indirect costs 

of morbidity and mortality (which are reduced with early diagnosis) as well as the direct costs? Improved 

diagnosis presents a conundrum in that with earlier detection, survival is greater, but lifetime health costs 

may be higher. Is it possible to develop cancer care models to reduce delays in and costs of care while still 

providing timely, quality, standard cancer care? Predictions of cost savings associated with improved cancer 

control are based on longer-term societal costs. Short-term savings may not occur. Policy changes not 

related to direct medical health care costs, such as environmental factors, education, and patient navigation, could be instrumental in reducing cancer morbidity and mortality. Other policy issues to consider 

Societal Costs

Employer Costs

Morbidity Costs Mortality Costs

Patient/Family Costs Government Costs

Patient/Family 

Time Costs

Direct Medical Costs

Prevention

Ambulatory

Hospital

Home Care/

Hospice

Direct Non-Medical 

Costs

Direct Costs Indirect or 

Productivity Costs

Transportation

Other

Other

Other

Child Care/

Elder Care

Health-Related 

Quality of Life 

(HRQL)

Quality-Adjusted 

Life Years (QALYs)

Years of Life 

Lost (YLL)

APPENDIX FIGURE C-3 Types of Health Care Costs

NOVA Research, 2004
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 63

include increasing racial/ethnic minority providers, training lay health workers, and advances in technology such as telemedicine and electronic patient records.

6. What is the cost to change policies to reduce cancer health disparities?

Changing policies to reduce disparities involves costs and benefi ts. For example, the benefi ts of changing 

a policy such as insurance coverage include an expected reduction in mortality of 5% to 15% as well as 

a decrease in other costs associated with lost productivity.16 Having health insurance may increase a person’s medical care use.15 Providing coverage for uninsured Americans is estimated to increase per person 

spending on health care from about $1,600 to $2,836 per year, thus increasing total annual spending on 

health care by $48 billion.16 This represents an increase of 0.4% in the share of GDP going to health care. 

However, health insurance coverage alone does not solve all cancer health disparities. How would the 

costs of expanding health coverage compare to the benefi ts? Can cancer models be developed to reduce 

delays in and costs of care while still providing quality, standard cancer care on a timely basis? How can 

cancer interventions be made more accessible to all Americans without bankrupting the economy? How 

do we identify and measure cost offsets that would be realized by improving the health of America’s most 

vulnerable populations?

Summary

A gap exists between the discovery/development of new knowledge and the delivery of cancer care 

services. This is evidenced by decreased access, cultural barriers, and delays in the receipt of timely cancer 

care, which can lead to complications, make recovery diffi cult, and increase cancer care costs. Some 

racial and ethnic minorities, people with low SES, those who live in rural and inner-city areas, and other 

underserved people have suffered disproportionately from barriers to cancer care. Some declines in health 

are preventable.17, 18

The concepts of economics can enrich the understanding of cancer health disparities and help close 

the gap between development and delivery of cancer care through policy changes and reallocation of 

resources. Compared to biological and psycho-social factors, economic factors change quickly. Because 

economic costs are changeable, they offer strong opportunities for policy interventions to change factors 

affecting cancer health disparities. It is crucial that the evidence base on the cost of disparities be strengthened so that strategies to allocate health resources keep pace with the burden of cancer disease in underserved populations.

The challenge to participants in this Think Tank is to think beyond what is currently known about the 

economic costs of cancer health disparities. This includes considering new and creative ways of examining and estimating economic costs. Thinking outside-the-box about economic costs is encouraged and 

can lead to new strategies for addressing disparities. The fi ndings of this Think Tank will help inform 

NCI and policy makers about the cost of cancer health disparities and suggest approaches to reduce and 

eventually eliminate cancer health disparities.

Types of Health Care Costs

The term cost has many nuances and varies among different disciplines. Whenever this term is used, it 

is important to defi ne what is meant. Economic costs represent the value of productive resources used 

in a particular economic activity, including the economic value of a complex mix of human resources.5

These costs refl ect the opportunity costs of resources used to provide an intervention compared with 

using the same resources for another purpose. Economic costs include direct dollar outlays for cancer care 

and related resources plus the value of other resources used, such as patients’ and unpaid caregivers’ time. 

Care should be taken to differentiate economic costs from charges for cancer care services.20 Economic 

costs are inclusive of all resources needed and used to produce a service and represent the value of forgone 

opportunities to use these resources for a different service. The charge for a medical good or service is 

the supplier’s list price. The charge or list price of health care services generally does not represent the 
64 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

full economic cost of those services. Government payers and large third-party payers may negotiate 

discounted prices for services rendered. These types of activities infl uence charges or list prices. Another 

reason for the difference between economic costs and charges is that some services are profi table and 

some are not. This often leads to redistribution of charges from less lucrative services to more lucrative 

services in order to make a profi t or break even. Finally, economic costs may be redistributed or shifted 

from one payment source to another. To fully capture the value of resources used to provide cancer care 

services, the Think Tank will address economic costs. The economic costs of cancer care and control 

include expenditures for cancer preventive, screening, and treatment services; costs associated with time 

and effort spent by patients and their families and by cancer treatment providers; and costs associated 

with lost productivity due to cancer-related disability and premature death. Cancer health disparities may 

increase these costs for individuals, families, employers, governments, and society.

Resource use and costs have traditionally been categorized according to whether they are directly or indirectly related to the provision of services (Appendix Figure C-3).13, 20 Direct costs are measured by expenditures for goods, services, and other resources used to provide an intervention. Direct medical costs and 

direct non-medical costs are subsumed under “direct costs.” Indirect costs, also referred to as productivity 

costs, are used in economics to refer to productivity gains or losses related to an illness or death. Because 

fi nancial accounting systems use indirect costs to describe overhead or fi xed costs of production, medical 

or health care-related indirect costs are often broken down into morbidity and mortality costs. As subsets 

of indirect costs, morbidity and mortality costs refl ect lost or impaired ability to work or engage in leisure 

activities due to illness or death. Time costs refl ect the economic value of time that patients and their 

families spend receiving medical care and treatment related to a disease.13 Of the various types of economic costs, direct medical costs are the most commonly measured and those for which cost data tend to 

be more available.

 Although the non-medical costs of cancer are often diffi cult to capture, researchers have tested a 

variety of measures to capture these costs. An example is a study that explored the non-medical costs of 

cancer-related productivity loss and health-related quality of life (HRQL) in a matched sample of cancer 

survivors and controls.21 Cancer survivors reported a higher burden than controls. Even long-term survivors were more likely to report lost productivity and worse quality of life than persons who had not had 

cancer. This points out that the economic burden of cancer goes beyond the direct costs of medical care.

Costs can be further divided by costs to individuals/families, businesses, governments, and society. For 

cancer patients, survivors, and their families, direct costs include out-of-pocket expenses, such as insurance 

premiums and co-pays, and uncovered or partially covered services such as prescription drugs and home 

health services.22 Other disease-related, non-medical costs faced by individuals and families include the 

cost of travel to health care providers and facilities, unpaid family labor to care for the cancer patient, and 

decreased HRQL. At the same time that cancer patients and their families are dealing with the disease and 

the cost of care, they are at risk of having income decrease due to time taken off for treatment (i.e., time 

costs) and permanent disability (i.e., morbidity costs).23-25

Businesses experience additional costs related to absenteeism of employees with cancer and recruitment 

and training of temporary replacement workers. This often leads to lost productivity. Other business costs 

include paid sick leave, family leave, and disability days as well as employee health insurance coverage. 

Federal and state governments are the major funders of health care through programs like Medicare and 

Medicaid. Avoidable costs due to cancer health disparities contribute to the growing cost of health care 

in the United States. Also, communities and society as a whole pay a cost resulting from the failure to 

deliver early detection and treatment services to all Americans. This failure represents missed opportunities for reducing the economic burden associated with the pain and suffering caused by cancer.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 65

Understanding of types of health care costs has improved, yet knowledge gaps persist. Some of the unanswered questions include: what elements should the total cost of cancer include? What economic models 

are applicable for examining the cost of cancer health disparities? Costs attributable to cancer are numerous (e.g., costs related to comorbidities); how can that information be captured and used?

Sources of Health Care Cost Data

Access to reliable and representative health care cost data is critical. Sources of cost data include administrative databases and surveys of patients, providers, and organizations (Appendix 3: Selected Sources 

of Cost Data). The most commonly used source of cost data is administrative data. These include 

claims charge data from payers such as Medicare, Medicaid, private insurers, and HMOs, and data from 

cost-accounting systems such as Veterans Health Administration administrative data and the Resource 

Patient Management System used by the Indian Health Service. Administrative databases provide 

information on the direct costs of delivering cancer care (e.g., hospital and ambulatory care, physicians 

and other providers, prescription drugs) but generally do not provide information on indirect costs. Other 

limitations of administrative data include misclassifi cation of diagnostic codes, lack of information about 

comorbidities, fi nite information about follow-up care, and missing racial/ethnic identifi cation.

Data from surveys, the second most commonly used source of cost data, can provide information on direct 

and indirect costs of cancer. Surveys of cancer patients and their families, insurers, and care providers 

and clinics are becoming increasingly sophisticated in obtaining reliable cost information (e.g., Medical 

Expenditure Panel Survey [MEPS], Healthcare Cost and Utilization Project [HCUP]). Data sources that 

provide information on insurance coverage and the uninsured include MEPS, HCUP, National Health 

Interview Survey (NHIS), California Health Interview Survey (CHIS), Kaiser Family Foundation, Commonwealth Fund, and the U.S. Census. Although a number of surveys are now available to researchers, 

they have limitations. Frequently survey data are self-reported and thus cannot be verifi ed. Specifi cs such 

as stage of disease are not included in large population-based surveys that include cost information.

Mortality data, used to calculate the costs of premature mortality (i.e., future productivity lost to society 

as the result of premature death), are obtained from death certifi cates. Although death certifi cates are 

standardized, interpretation of these data can be complex, making it diffi cult to identify disease-specifi c 

mortality. For example, patients with multiple diseases may have myocardial infarction (MI) listed as the 

cause of death when the actual cause of death was complications from chemotherapy that led to heart 

problems.

Over the last several years, data resources for economic research have increased. Yet the question remains 

as to whether necessary data are available to make accurate economic impact evaluations. If they are not, 

how can additional data be collected?

Measuring Costs

Different perspectives guide which cost framework is used to answer cost-related questions (e.g., equal 

access perspective versus actuarial bottom line for the Medicare budget). Stakeholders—i.e., patients, 

families, third-party payers, service providers, researchers, governments, and society in general—determine what economic questions are asked and which outcomes are measured. Because the questions asked 

and the variables measured determine the results, cost-effectiveness is in the “eye of the beholder.” For 

instance, Congress determines appropriations for Medicare and Medicaid and is often more interested in 

the actuarial bottom line. When policy makers talk about costs, they most often mean budgetary costs. 

Predictions of cost savings associated with improved cancer control are based on longer-term societal 

costs but are often represented as short-term budget savings, which may not occur and may actually 

increase expenditures. Answers to “big” (i.e., societal) questions may not provide a rationale for pragmatic changes in policy. Therefore, it is important to identify which perspective is being used to analyze 
66 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

economic costs of cancer health disparities. If a societal perspective is taken, all economic costs will be 

relevant. However, if a provider perspective is used, indirect costs for patients may be excluded.

Commonly used economic metrics include cost-benefi t, cost-effectiveness, and cost-of-illness measures. 

These methods attempt to quantify the amount of health benefi t gained through intervention and 

determine the best value for cost. Any of these methods may include attributable costs such as the cost 

related to comorbidity.

Cost-benefi t analysis (CBA) is frequently used to estimate the benefi t of an intervention minus the 

incremental cost—i.e., cost of one alternative less the cost of another.20 All costs and health effects are 

expressed in monetary terms. CBA puts a dollar value on a year of life (e.g., increased productivity due 

to prolonged healthy life). When done correctly, it may provide a comprehensive monetary measure of 

benefi t and cost consequences of an intervention or show how the most money can be saved. CBA may 

be helpful when trying to decide whether to implement a specifi c program or when choosing between 

competing options. However, CBA has been criticized because it is obtained by estimating individuals’ 

willingness to pay for interventions. Some economists fear that this favors the wealthy over the poor.13

With cost-effectiveness analysis (CEA), costs and intervention effects and at least one alternative are 

calculated.13 The alternative used for comparison might be usual care or a different intensity of the intervention, such as less frequent screening. The results are a ratio of cost to effect. Costs are expressed in 

monetary terms, and benefi ts are expressed in natural units such as “life-years” (e.g., years of life saved per 

dollar spent). CEA shows the tradeoffs involved in choosing among interventions or variants of an intervention. CEA is limited because it compares only interventions whose costs and benefi ts are measured in 

the same units of effectiveness.

Cost-utility analysis (CUA) is a specifi c type of CEA.20 Benefi t is expressed in quality-adjusted natural 

units such as “quality-adjusted life-years (QALYs).” CUA may be used when HRQL is the desired outcome. With CEA and CUA, a goal such as QALYs is established. It can then be determined how to get 

the best outcome for the money available or how to spend the least money to obtain the desired outcome. 

Often, CBA and CEA will lead to the same decision about how to allocate health resources.13

Cost-of-illness (COI) analysis is useful for ascertaining an aggregate, global picture of the economic burden 

of cancer.4 Estimates for the national economic costs of cancer, including costs that are related to direct 

medical expenditures, lost economic activity due to morbidity, and lost economic activity due to premature 

mortality can be estimated. COI studies use the “human capital” approach to estimate mortality costs. With 

this approach, average age-specifi c and gender-specifi c earnings are assigned to years of life lost (YLL) that 

are attributable to cancer. A cost value is then assigned to YLL. Usually, all types of cancer are included 

in COI studies. A limitation of COI analysis is that it mixes the prevalence–based measures of direct and 

morbidity costs with the incidence-based measure of mortality costs.

Other approaches to estimating cancer-related costs include the use of longitudinal data to estimate 

cancer site-specifi c direct costs.3, 26 Using data for individual incident cases of cancer, costs can be constructed for clinically relevant treatment phases that occur between diagnosis and death (e.g., continuing 

care following the fi rst 12 months after cancer diagnosis). Costs can then be calculated for different stages 

of disease and/or for different demographic categories, allowing a variety of cost comparisons. Another 

evolving approach is the use of economic modeling to evaluate the cost of cancer care.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 67

Technical issues related to measuring economic costs include adjusting for unit cost differences for different years and for different settings. Also, discounting, pricing non-market goods, and incremental and 

marginal cost pricing must be dealt with in a health economic analysis. Several statistical issues related 

to measuring cost have to be managed. Economic data tend to be skewed with a large number of observations with zero costs, and cost histories are censored, so adjustments are needed. Intervention studies 

with clinical endpoints (e.g., increasing access, decreasing morbidity) may be underpowered for economic 

and/or cost-effectiveness results. 
68 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

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70 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

Appendix D Agenda and Meeting Presentations

DECEMBER 6, 2004

8:00-8:30 am Continental Breakfast

8:30-9:00 am Welcome, Introductions, Opening Remarks:

Purpose, Rationale, Core/Principal Questions, and Desired Outcomes of the 

Think Tank

Dr. Harold Freeman, NCI, CRCHD

9:00-9:25am Presentation I — What is the total cost of cancer care? Direct costs vs societal cost: 

conceptualization and methodological issues

 Dr. Martin Brown, NCI, DCCPS

 Dr. Brown provided background information on cost domains and presented 

cost-of-illness estimates for cancer for 2002, including estimates by cancer type 

and by stage of diagnosis. Additionally, time costs and employment costs were 

discussed.

9:25-9:45 am Group Discussion

9:45-10:10 am Presentation II — What percentage of the total cost of cancer care is related to 

health disparities? Economic Costs of fi nding cancers at earlier vs. later stage: What 

is an appropriate “cost-effectiveness threshold” for estimating cancer diagnostic and 

treatment options - All cancers and/or specifi c cancers?

 Dr. Scott Ramsey, Fred Hutchinson Cancer Research Center

 Dr. Ramsey discussed cost-effectiveness analyses and methods to assess costeffectiveness of intervention that can be implemented to eliminate cancer 

health disparities. 

10:10-10:30 am Group Discussion

10:30-10:40 am Break 

10:40-11:05 am Presentation III — What would be the cost of eliminating cancer health disparities? 

The intercept of methods of payment and cancer health disparities: Is equal access to 

quality, standard care cost-prohibitive or cost-effective for U.S. health care system?

Dr. Kenneth Thorpe, Emory University Rollins School of Public 

Health

 Dr. Thorpe discussed the sources of disparities in cancer treatment and 

spending, including lack of insurance, lack of prescription drug coverage, and 

race/ethnicity. 

Economic Costs of Cancer Health Disparities Think Tank Center 

Bethesda, MD • December 6-7, 2004

DRAFT AGENDA
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 71

11:05-11:25 am Group Discussion

11:25-11:50 am Presentation IV — What is the value to America to reduce cancer health disparities? What are the economic benefi ts of eliminating health disparities in the United 

States: Is it economically feasible to treat every American with a cancer-related 

abnormality? Are necessary data available to make economic evaluations?

Dr. Jeanne Ringel, RAND 

 Dr. Ringel discussed ways to evaluate cancer health disparities as well as strategies to reduce such disparities. Additionally, the discussion focused on benefi ts 

of reducing cancer health disparities and how these benefi ts should be valued.

11:50am-12:10 pm Group Discussion

12:10-12:20 pm Wrap-up of Morning Session

 Dr. Harold Freeman

12:20-1:30 pm Lunch (on your own)

1:30-1:55 pm Presentation V — What are the policy implications: How can we make cancer 

interventions more accessible for all? What health care system changes could reduce 

the costs of cancer care? How best to deal with the “moral hazard” concept?

Dr. Cathy Schoen, Commonwealth Fund

 Dr. Schoen discussed the roles of insurance and poverty as key factors in 

cancer health disparities and focused on issues related to quality and stability of insurance coverage. Additionally, insurance policies that would target 

socioeconomic disparities were discussed.

1:55-2:15 pm Group Discussion

2:15-2:40 pm Presentation VI — What is the cost to change policies? Long-term societal costs 

vs. short-term budget savings: What cross-incentives between parts of the healthcare 

system are needed to ensure that stakeholders “do the right thing”? What research is 

needed to change policies?

Mr. Gerald Riley, CMS

 Mr. Riley discussed changes in Medicare payments for cancer therapies as well 

as the increased emphasis on preventative care. He also presented information 

on demonstration projects and coverage expansions.

2:40-3:00 pm Group Discussion

3:00-3:15 pm Break

3:15-4:45 pm Panel Discussion of Main Points

 The six presenters will serve on the panel with questions and discussion from 

participants.
72 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings

4:45-5:00pm Wrap-up of Day 1

Dr. Harold Freeman

DECEMBER 7, 2004 

8:00-8:30 am Continental Breakfast

8:30-9:30 am Opening Remarks

 Dr. Harold Freeman

 Review the Discussion & Outcomes from Day One; Charge to Breakout 

Groups

9:30am-12:00 pm Breakout Sessions

These facilitated breakout sessions will offer participants an opportunity to dialogue 

and discuss the following guiding questions: what is the total cost of cancer care? 

What percent of the total cost of cancer care is related to health disparities? What 

would be the cost of eliminating cancer health disparities? What is the value to 

America to reduce cancer health disparities? What are the policy implications? 

What is the cost to change policies? Suggested research and policy recommendations 

(i.e. What do we do next?)

12:00-1:30 pm Lunch

1:30-3:00 pm Breakout Session Reports and Further Discussion

 Each group will report a summary of the discussion and highlight various solutions and recommendations that resulted from the dialogue.

3:00-3:30 pm Wrap-up of the Think Tank

Dr. Harold Freeman