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The Economic Burden of Cancer

The costs of illness are the monetary and non-monetary losses from cancer, and economic costs are those that can be expressed in monetary units. There are three categories of costs. Direct costs result from the use of resources for medical care to prevent, diagnose and treat illness and disease and for the continuing care, rehabilitation and terminal care of patients. Indirect costs come from the loss of resources – the time and productivity lost or foregone by the patient, family, friends and others from employment, volunteer activities, leisure and housekeeping. Psychosocial costs come from reduced quality of life from disability, suffering and pain which force undesirable changes in lifestyle such as economic dependence, social isolation, changes or loss of job opportunities or changed conditions of living.

For practical reasons most studies of costs of cancer focus on direct medical costs as well as morbidity and mortality which are the major components of indirect costs. Morbidity costs estimate the value of losses in productivity or output for people who are ill or disabled and cannot work or keep house. The present value of future output lost because of premature death is used to estimate mortality costs. Two approaches are used to measure the cost of cancer. The cost-of-illness method estimates the annual burden of illness measured as the value of goods and services lost either because of inability to work or because they are used to provide medical care. This macroeconomic approach gives policy-makers an idea of the magnitude of the cancer problem in economic terms to assess budgetary implications. The incidence approach looks at the lifetime costs of cancer treatment - cumulative costs from diagnosis to death or cure for the average individual patient. This microeconomic approach is helpful for cost-effectiveness studies of cancer programs.

A number of cost-of-cancer studies have been done focusing mainly on direct costs of medical care because this information is more readily available. As a further example, some macroeconomic data are shown below for the USA for 1990. Information broken down by tumor site is also available.

Economic Costs of Cancer, USA, 1990
Type of Cost Amount (Millions) Percent Distribution
Total $96,126 100.0
Direct $27,458 28.6
Indirect $68,668 71.4
Morbidity $ 9,895 10.3
Mortality $58,773 61.1


Expenditures for Medical Care, USA, 1990

Type of Service Amount (Millions) Percent Distribution
All Service $27,458 100.0
Hospital Care $17,935 65.3
Physician’s Services $ 6,613 24.1
Nursing Home Care $ 1,333 4.9
Drugs $ 1,068 3.9
Other Professional Services $ 509 1.9

Source: Summarized and adapted from Greenwald P, Kramer BS and Weed DL Eds (1995) Cancer Prevention and Control. Marcel Dekker, Inc., New York.

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