Healthcare costs are rising faster than inflation, with some employers seeing double digit increases each year. When you evaluate which clinical conditions are driving this increase, you’ll find that cancer contributes to higher costs and many high cost claimants. Because of the life-and-death nature of some diagnoses, it’s easy to assume — wrongly — that there’s little that can be done to manage cancer costs.
Oncology cost increases are driven by newer therapeutics, as well as broader and earlier screening of the population. Happily, this means that more people with cancer are living longer on effective treatment. The challenge is how to afford to pay for increasingly expensive care over a longer survival period. So where can you actually make an impact on costs while protecting quality of care?
Medications
Medications are the main reason for oncology costs, especially the drugs given in doctor's offices or hospitals' outpatient clinics. Medical insurance covers these drugs. The nature of treatment has changed, with some medications continuing for months or years for members. Infusions cost much more in outpatient settings. Some hospital outpatient departments charge a lot more for medications. Therefore, there's a growing interest to add site of care to the utilization management of these drugs through a medical carrier program or a third-party vendor. Steering patients toward cost-effective sites of care allows each member to receive the right medications at the lowest cost possible.
Dose rounding strategies
Another option for managing the cost of expensive infused medications is to reach out to the health carrier about dose rounding. This program lets prescribers round the dose down to better match the vial sizes available (as long as it’s within 10% or less of the calculated dose and won't impact the quality of care). This can result in substantial savings for individual medications and reduce side effects.
Leveraging biosimilars
A third way to manage medical drug costs is to structure the benefits to encourage the use of biosimilar drugs. These are highly similar, U.S. Food and Drug Administration (FDA) approved versions of an existing biological drug that can be substituted for a brand-name medication. Biosimilars are made by living cells. There are small differences between them and brand name drugs, but they have similar therapeutic value and cost substantially less.
Managing cell and gene therapy costs
Another area of treatment that can be managed further is cell and gene therapy. This area of treatment is growing and providing exciting new treatment options, but again at high costs. To manage these medications better, there are companies that find members who are good candidates for these therapies. They help to manage those costs through pooling, curated provider networks, reinsurance and value-based contracts with pharmaceutical companies.
CAR-T drugs, a type of cell and gene therapy, are immunological therapies used to treat a variety of cancers. In 2025, the FDA got rid of the Risk Evaluation and Mitigation Strategies for CAR-T treatment. This means that CAR-T can be given in more treatment centers than the limited hospitals in the past. Greater geographic access to these therapies may increase usage and net costs. You can work with your carriers for help administering in these new areas. Some CAR-T therapies will now likely be administered outside of academic centers, which could lower unit costs.
Improving diagnosis and treatment
Employers often look to their health benefits strategy to address more than just cost mitigation. They want solutions that support their members and their loved ones on these difficult health journeys. Many steer patients with cancers to Centers of Excellence (COE), either through navigation or through lower cost sharing at COEs. Many also offer access to expert medical opinions, and many promote appropriate cancer screenings.
Centers of Excellence and screening programs
These initiatives can provide critical support for members with cancer and their loved ones. Screening can help members be diagnosed earlier, when cases are more curable and less expensive to treat. Screening can also ensure that each person is receiving the optimal care for their particular diagnosis and needs. True cost savings can be more elusive for these programs, but may be possible if targeted appropriately. That said, these initiatives clearly can enhance the quality of care delivered and are often viewed very favorably by members who use them.
Palliative care and clinical pathways
Some services, like palliative care, can improve care and decrease costs for your sickest members, particularly those being treated in the hospital setting. You can review their benefits to ensure easy access to palliative care benefits, and to communicate the advantages to their members.
Likewise, you can review your standard payment and medical policies with your health plan carriers to decrease unneeded or wasteful care, as suggested by the American Society of Clinical Oncology Choosing Wisely publication. Some carriers may offer clinical pathways that can improve the value of cancer care delivered, but engagement in those pathways can be low.
Take action
Advances in oncology care are leading to longer and better lives for those with cancer, as well as higher medical costs. Take action today to constrain at least some of these increased costs.
