In Cancer Care, Can We Afford To Hope?

Zachary Hafner
Advisory Board

There are few phrases in the English language as devastating as, “You have cancer.” For the patient receiving the diagnosis, these few simple words mark the beginning of a life-altering journey—one replete with uncertainty and a roller coaster of emotional upheaval. And while the shape of the journey that follows may take many different forms depending on the circumstances involved, there are some common questions that inevitably surface. “Am I going to die?” “What is my prognosis?” “What are my options?”

For people confronting this dreaded situation, a question that does not typically come to mind: “Can I afford the treatment?” But going forward, it may have to be.

Breakthrough treatments

Thankfully, a cancer diagnosis is no longer the near-certain death sentence it used to be. Many of health care’s most cutting-edge innovations are focused on cancer treatment with gene and immunotherapy development surging on billions of dollars of investment. And the results are nothing less than astonishing.

Zachary Hafner

Zachary Hafner

Take, for example, CAR-T therapy, a new form of cancer treatment that is just clearing FDA approval. In CAR-T, a patient’s T cells are harvested, genetically modified, and reinfused with new capabilities to fight cancer growth. In certain clinical trials, CAR-T has shown remission rates of up to 94%.

So what are we waiting for? Even taking into consideration the counterclaims, complication rates, and other risks associated with a new and complex treatment like CAR-T, surely the benefits must outweigh the mitigating factors given the results observed.

However, there is one other factor that must be considered: Each CAR-T treatment runs somewhere between $500,000 and $1 million. And it would be one thing if CAR-T were just an outlier, but it isn’t. At last count, the pharmaceutical industry’s new product pipeline included more than 7,000 products in late-stage development, roughly half of which are deemed “specialty.” In the world of cancer treatments, this often translates to six-figure (or even greater) price tags.

Which brings us to the question we have been waiting for: Who is going to foot the bill for all of this exciting new innovation? Will such treatments become part of the standard health insurance policy? Which will be reserved only for those who can pay for them?

The reality is, our health care system is poorly equipped to address this issue head-on. Instead, a number of interlocking factors will likely shape our approach over the years to come. Here are some of them:

  • Consumers will continue to face growing exposure to an increasing portion of the total cost of their health care, particularly those with commercial insurance coverage. This will quickly force questions of affordability to the forefront as bifurcation occurs between the haves and the have-nots.
  • Many provider organizations are moving toward taking on financial risk for managing population health. This will drive greater adoption of standardized care and protocols, which are not widely followed in cancer care today.
  • The proliferation of costly therapies for a broad range of conditions, including cancer, is causing payers to focus on efficacy when making coverage decisions. This will lead to tough judgment calls and even stronger appetite for good data to back them up.
  • Regulation may have to play a part in managing both access and cost, which is otherwise poised to spiral even further out of control.

Each of these is a powerful force by itself. Collectively they are inadequately coordinated to balance the mounting pressures of supply and demand. The collision of business interests, politics, and public health involved make this a particularly tough nut to crack, but we really have no choice.

Cancer incidence rates are on the rise (partly because Americans are living longer) and there are exciting new ways of treating cancer emerging every day. However, costs are skyrocketing. An all-or-none approach will not be a workable solution.

The devil is in the details, but this is certain: We can’t allow the new hope in cancer care to become an economic death sentence for the average American.

Zachary Hafner leads the Advisory Board’s strategy consulting practice.


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