Brexit & EconomyPoliticsInflationary cost of cancer care

Inflationary cost of cancer care

Advances in the treatment of cancer are resulting in improvements to the health status of sufferers and life expectancy

This has in part been due to the recent licensing of a range of ‘monoclonal
antibody’ based drug therapies.

Such developments are clearly welcomed – but there are significant financial
and employee benefit design implications for companies to consider.

From a claims cost perspective, it would not be uncommon to see patients in
receipt of the new therapies costing tens of thousands of pounds over a year; in
addition to the existing notable costs of chemotherapy or radiotherapy. Indeed,
it is anticipated that treatment using such drugs will be commonplace over a
number of years with some patients, in order to control or stem the recurrence
of a particular cancer episode. It would not be uncommon for treatments
involving the new drug therapies to run into six figures.

As such, and given the existing cost pressures employers already find
themselves in relation to health benefits, quite how an employer should, or
might wish, to react to the potential for further significant plan cost
inflation is open to some debate and speculation.

Suggested initial revisions to plan designs might include the payment of
cancer-related diagnostic costs only, or to restrict cancer benefits to a
defined monetary and/or time based approach.

An alternative to limiting the potential liability on the part of the
employer might be to cease covering cancer altogether as part of the medical
plan. That said, such an approach is likely to be unpopular with employees, and
might only prove to be achievable if, say, an option to buy back/buy up cancer
benefits exists.

Whatever decision an employer makes, for larger medical benefit programmes,
any such decision-making process should be supported by an appropriate level of
formal governance and financial review.

Relevant factors include the financial modelling of the likely claims costs
of any given benefit design. An employer should also consider what clinical
factors might be relevant if applying a defined cancer benefit design to
real-life situations.

Whichever design an employer decides upon, due consideration of such factors
will be required for the programme to remain not only meaningful to and valued
by patients when treatment is most required, but also to ensure some form of
sustainable plan design and financial control from an employer’s perspective.

Elliott Hurst is a senior consultant in Watson Wyatt’s
risk and healthcare benefits group

Related Articles

5 key takeaways from Theresa May’s Florence speech

Brexit 5 key takeaways from Theresa May’s Florence speech

3m Alia Shoaib, Reporter
UK at risk of Brexit talent brain-drain

People Practice UK at risk of Brexit talent brain-drain

3m Alia Shoaib, Reporter
Brexit essentials: this week's round-up

Politics Brexit essentials: this week's round-up

4m Alia Shoaib, Reporter
Government publishes post-Brexit customs arrangements policy paper

Politics Government publishes post-Brexit customs arrangements policy paper

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Increased government spending partly offset by high tax revenue

Governance Increased government spending partly offset by high tax revenue

5m Alia Shoaib, Reporter
Less than a third of UK businesses have made formal Brexit plans

Politics Less than a third of UK businesses have made formal Brexit plans

5m Alia Shoaib, Reporter
Nicky Morgan elected Chair of the Treasury Committee

Politics Nicky Morgan elected Chair of the Treasury Committee

5m Alia Shoaib, Reporter