USC Price School of Public Policy

Cancer Patients Prefer Risky Treatments With Larger Rewards

Cancer Patients Prefer Risky Treatments With Larger Rewards

By Suzanne Wu

Darius Lakdawalla Darius Lakdawalla, director of research at the Schaeffer Center for Health Policy and Economics and USC Price associate professor

A new analysis provides a closer look at how much cancer patients value hope – with important implications for how insurers value treatment, particularly in end-of-life care.

The analysis led by Darius Lakdawalla, director of research at the Leonard D. Schaeffer Center for Health Policy and Economics at USC and associate professor at the USC Sol Price School of Public Policy, surveyed 150 cancer patients currently undergoing treatment. It is part of a special issue on cancer spending in the journal Health Affairs.

Lakdawalla and his co-authors found the overwhelming majority of cancer patients prefer riskier treatments that offer the possibility of longer survival over safer treatments: 77 percent of cancer patients said they would rather take a “hopeful gamble” – treatments that offer a 50/50 chance of either adding three years or no additional survival – to “safe bet” treatments that would keep them alive for no longer than 18 months.

“Consumers tend to dislike risk, and researchers and policy makers have generally assumed that patients care about the average gain in survival,” Lakdawalla said. “But patients facing a fatal disease with relatively short remaining life expectancy may have less to lose and be more willing to swing for the fences. This analysis points to the larger ideal – that value should be defined from the viewpoint of the patient.”

John A. Romley, research assistant professor at USC Price; Yuri Sanchez of the health care consulting firm Precision Health Economics; Ross MacLean and John Penrod of Bristol-Myers Squibb; and Tomas Philipson of the University of Chicago and senior fellow at the Schaeffer Center, were co-authors on the study.

The study is one of several in Health Affairs that look at cancer spending and assess the value of treatments which can cost thousands of dollars yet might offer patients with a terminal illness the hope of staying alive longer. Taken together, the articles provide additional considerations for policymakers, patients, providers and others as to when a high-cost treatment is worth the price.

Other papers from the Schaeffer Center in the issue of Health Affairs:

  • Philipson, senior fellow at the Schaeffer Center and holder of the Daniel Levin Chair in Public Policy at the University of Chicago, and his co-authors looked at the higher cost system of cancer treatment in the United States and compared it to care in 10 European countries from 1983 to 1999.

    The United States spends more on cancer care than European countries, but the analysis suggested that this investment also generates a greater value for U.S. patients who typically live nearly two years longer than their European counterparts.

    For most cancer types, U.S. cancer patients lived longer than their European counterparts, according to the results in the Health Affairs paper. Cancer patients diagnosed from 1995 to 1999 lived 11.1 years after diagnosis in the United States, on average, compared to 9.3 years after diagnosis in Europe.

    This analysis suggested that the higher-cost U.S. system of cancer care delivery may be worth it, the authors said, although further research is required to determine what specific tools or treatments are driving improved cancer survival in the United States.

    Lakdawalla, Michael Eber of Precision Health Economics, Mitra Corral of Bristol Myers-Squibb, Rena Conti of the University of Chicago and Dana Goldman, director of the Schaeffer Center and holder of the Norman Topping Chair in Medicine and Public Policy at USC, were co-authors of the study.

  • Healthy people are willing to pay more for generous coverage of high-cost drugs that treat cancer and other serious diseases, according to research led by Romley.

    On average, healthy people were willing to pay an extra $12.94 per month for better coverage of high-cost drugs. The cost of covering specialty drugs is about $5 per month – meaning respondents were willing to pay $2.58 in health care premiums for every dollar in out-of-pocket costs on a less generous insurance plan.

    “If sick patients faced with the full cost of care decline to undergo treatment, one might conclude that these treatments are not ‘worth it,’ ” Romley said. “But our study shows that healthy individuals apparently dislike the financial risk associated with future treatment enough to finance the average cost of coverage across all beneficiaries – indeed, they’re willing to pay more than the actual cost for coverage, suggesting that the value they place on it exceeds what it costs to provide.”

    Sanchez, Penrod and Goldman were co-authors of the study.

This month’s issue of Health Affairs is supported by Bristol-Myers Squibb, the Schaeffer Center and Precision Health Economics.