Understanding prostate cancer spending growth among Medicare beneficiaries

Objective: To understand whether growth in prostate cancer spending is a result of selected use of expensive services or greater overall usage. Growth in prostate cancer spending continues to outpace that for overall health expenditures, garnering nearly $7 billion annually.

Methods: We identified patients diagnosed with prostate cancer between January 1, 1992 and December 31, 2003 using Surveillance, Epidemiology, and End Results-Medicare data. Patients were sorted into 12 cohorts based on their diagnosis year. We price-adjusted and tallied all prostate cancer-related Medicare payments for the first 2 years after diagnosis. We characterized the impact of a service by quantifying its contribution to the variation of per capita spending over time. We further assessed whether leading services contributed to spending growth by price or usage.

Results: Per capita Medicare expenditures increased by 20% from $8933 to $10,734. Decreases in inpatient expenditures ($3499 to $1504, P value for trend <.001) were offset by growth in physician spending ($3317-$6062, P value for trend <.001). Androgen deprivation (41.6%) and radiation therapy (19.9%) accounted for the majority of spending growth through increases in quantity. Depending on the service, quantity, as opposed to price, was responsible for 59.0% to 76.4% of the observed spending growth.

Conclusions: Medicare spending for prostate cancer care increased by 20% and was fueled by increasing usage of physician services, including androgen deprivation and radiation therapy. Payment reform and bolstering the evidence base can potentially improve the efficiency of prostate cancer care.