Economics of Cancer
Apart from the devastating effects on patients and their families, cancer causes a huge financial burden for individuals and society.
- Cancer costs Canadians more than $14 billion every year
- Cancer associated healthcare costs are expected to surpass $176 billion over the next 30 years
- Federal and provincial governments combined are expected to lose over $248 billion in tax revenues as a result of cancer disability over the next 30 years.
- More than $100 billion dollars will be lost in wage based productivity due to cancer in the next 30 years
This huge economic impact to Canadians can be split into direct and indirect costs. Direct costs include care provided in hospitals and other institutions, physician services, drugs and other (including other health professionals, capital expenditures, public health and research). Indirect costs include estimates of the value of life lost due to premature death (mortality costs) and the value of activity days lost due to disability (morbidity costs). The data presented in the following paragraphs may be found in the report Economic Burden of Illness in Canada (Health Canada, 2002).
Cancer accounted for $2.5 billion in direct costs, hospital care costing $1.8 billion and representing 74% of this amount. Of the hospital care costs, 53% was expended for those 65 years and older, although this group accounts for 58% of cancer patients. In contrast, children with cancer accounted for 2.5% of hospital costs but made up less than 1% of the cancer population.
Physician services to treat cancer cost $333 million, or 14% of the direct costs of cancer. Approximately $210 million, or 9% of direct cancer costs, were spent on drugs for cancer treatment. Seventeen percent and 12% of the total drug costs spent on cancer treatment were accounted for by breast and prostate cancer respectively. Cancer research funding, at a cost of $80 million, represents only 3% of the direct costs of cancer but 19% of the total funding for medical research in Canada that could be attributed to a specific type of disease.
The estimated direct costs of cancer are conservative, since almost one-half of the total direct cost of illness in Canada could not be attributed to specific diseases. It is equally unclear whether all cancer prevention and screening activities undertaken by governments and by non-government organizations were identified.
Cancer accounted for $11.8 billion in indirect costs. Cancer accounted for almost one-third of premature mortality costs (32%), reflecting the fact that cancer is the leading cause of premature mortality in Canada. Eight percent of the costs of premature mortality due to all diseases was accounted for by lung cancer alone (or 26% of the total due to cancer). Long-term disability costs attributable to cancer ($962 million) accounted for only 3% of the total long-term disability costs of all illnesses/injuries. Short-term disability costs for cancer were estimated at $174 million, or 2% of the total short-term disability costs.
Cost Benefits of Earlier Detection
Currently, only 19-65% of the most common cancers discussed are detected while the tumours are still in the early, most treatable stages. It has been estimated that, if all tumours were detected before spreading beyond the organ of origin, 5-year survival rates would increase as shown in Figure 1*. A corresponding decline in the economic burden of cancer could be expected. Included in the figure are the current estimates of the direct costs of cancer, for Canadians in $ billions.
* Figure modified from tabulated information in Etzioni R, Urban N, Ramsey S, McIntosh M, Schwartz S, Reid B, et al. The case for early detection. Nat Rev Cancer 2003; 3: 243-252.
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