Costs for colon cancer treatment comparing benefit types and care sources in the US Military Health System

Introduction: Cancer is one of the leading causes of morbidity and mortality in the USA, contributinglargely to US healthcare spending. Provision of services (direct or purchased) and insurance benefit type may impactcost for cancer care. As a common cause of cancer in both men and women, we aim to compare colon cancer treatmentcosts between insurance benefit types and care sources in the US Military Health System (MHS) to better understandwhether and to what extent these system factors impact cancer care costs. Materials and Methods: Department ofDefense Central Cancer Registry records and MHS Data Repository administrative claims were used to identify MHSbeneficiaries aged 18-64 who were diagnosed with primary colon adenocarcinoma and received treatment between2003 and 2008. The data linkage was approved by the Institutional Review Boards of the Walter Reed NationalMilitary Medical Center, the Defense Health Agency, and the National Institutes of Health. Costs to the MHS for eachclaim related to cancer treatment were extracted from the linked data and adjusted to 2008 USD. We used quantileregression models to compare median cancer treatment costs between benefit types and care sources (direct, purchased,or both), adjusted for demographic, tumor, and treatment characteristics. Results: The median per capita (n = 801)costs for colon cancer care were $60,321 (interquartile range $24,625, $159,729) over a median follow-up of 1.7 years.The model-estimated treatment costs were similar between benefit types. Patients using direct care had significantlylower estimated median costs [$34,145 (standard error $4,326)] than patients using purchased care [$106,395($10,559)] or both care sources [$82,439 ($13,330)], controlled for patient demographic, tumor, and treatment characteristics. Differences in cost by care source were noted for patients with later stage tumors and by treatment type.Relative costs were 2-3 times higher for purchased care compared to direct care for patients with late-stage tumors andfor patients receiving chemotherapy or radiation treatment. Conclusions: In the MHS, median cost for colon cancertreatment was lower in direct care compared to purchased care or patients using a combination of direct and purchasedcare. The variation in cancer treatment costs between care sources may be due to differences in treatment incentives orcapabilities. Additional studies on cost differences between direct and purchased services are needed to understandhow provision of care affects cancer treatment costs and to identify possible targets for cost reduction.