It's Time for a Surge in the War on Cancer

Number of cancer deaths, all sites combined, all races, both sexes, United States, 1930–1996.

Source: Vital Statistics, 1999.

Introduction

According to a new edition of the World Cancer Report from the International Agency for Research on Cancer, cancer is projected to become the leading cause of death worldwide this year. Every day we see advertisements on television, radio, and in magazines and newspapers emphasizing the human cost of cancer, but the economic cost is just as great, and perhaps a targeted look at those costs will provide an added reason to continue with an even greater zeal the process of researching and developing a cure which can remove both the economic and social burden of cancer from the shoulders of the world.

Treatment

From 1995 to 2004, the cost of treating cancer rose by 75 percent. Cancer treatment approximates 5 percent of all medical spending in the United States, and the cost of cancer treatment is rising faster than the overall cost of medical care, so this number will increase in the future. While these statistics alone are enough to form a mental picture of the economic impact of cancer treatment, it is important to consider that these staggering costs are paid for by the American taxpayer, as the majority of cancer treatment (56.2 percent) is received by patients aged 65 and older who are covered by Medicare. Furthermore, the total number of persons expected to be treated for cancer is expected to rise faster than the overall population as American experiences the “demographic cliff” and the population ages (Warren, Yabroff, Meekins, Topor, Lamont, & Brown, 2008). Assuming that the percentage of cancer diagnoses received by people aged 65 and older remains at 56.2, the yearly cost of cancer treatment shouldered by the federal government, using the 2004 data on the cost of all cancer treatment in the United States, would be $40.5 billion per year. Considering that the population of the U.S. is aging relative to the size of the population as a whole, this cost can be expected to increase dramatically over the next decade as the “baby boomers” retire.

The fundamental problem of Medicare is that the ratio of workers under the age of 65 to persons receiving benefits is decreasing. There are currently 3.9 workers per beneficiary in the United States. That number is expected to drop to 2.4 workers per beneficiary by the year 2030 (The Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2006). As fewer and fewer working-aged people are paying into the system, the cost to each individual payer will rise proportional to the decrease in the payer to payee ratio. The cost to cover the unfunded liability for the Medicare program today over an infinite time horizon would be $85.6 trillion, which is more than six times the annual output of the entire U.S. economy (Fisher, 2008). The present value of unfunded obligations under all parts of Medicare during fiscal year 2007 over a 75-year forecast horizon is approximately $34.0 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall over the next 75 years (United States Government Accountability Office, 2006).

The cost of treating cancer is rising, even for the most basic, non-exotic courses of treatment. Increasing costs, along with an aging population, spells disaster for both the Medicare system and for the 40 million people in the United States who do not currently have health insurance. Even after the passage of the recent health care reform package, up to 23 million people in this country could remain uninsured (Astor, 2010). Leaving all political debate about the proper way to achieve this goal aside, the only way to stem the tide of a social and budgetary nightmare in this country is to ensure that all Americans have access to affordable health care and that we make real steps towards finding better methods of treating cancer.

Life Lost

While the value of individual life lost to family members and friends is arguably the largest driving force pushing cancer research forward, it is an immeasurable and highly personal cost which cannot be factored in to a discussion such as this. As such, I will seek to highlight the actual economic value of life lost in terms of lost production and contributions to society and the economy.

The value of life lost to cancer is a difficult figure to calculate, not least of all because the value of life itself goes beyond the dollars and cents. There are two methods for calculating this value, the human capital approach and the willingness to pay approach. The human capital approach combines sex- and age-specific earnings projections with estimates of future productivity and approximate year of life lost to estimate the value of life lost in a purely economic sense. This approach necessarily values the life of those with higher earnings (men aged 35-55) greater than that of those with lower earnings. The willingness to pay approach is able to factor in an assumed inherent value of life by combining the economic value of life lost with the average amount a person would be willing to pay for an additional year of life (Yabroff, Bradley, Mariotto, Brown, & Feuer, 2008).

Using the willingness to pay approach, researchers at the National Cancer Institute estimate that the total value of life lost to cancer in 2000 was $960.6 billion, and expect that number to reach $1472.5 billion by the year 2020 (Yabroff, Bradley, Mariotto, Brown, & Feuer, 2008). The total estimated person-years of life lost to cancer in the year 2000 was 8,448,454.

Conclusion

Cancer presents a gargantuan economic burden for the world to bear. In our own country, the system we have in place to provide medical care to the segment of the population most susceptible to cancer is coming apart at the seams as our population ages and Medicare faces massive budget shortfalls.

Yet we as individuals and through our elected representatives continue to allot only a relative pittance for cancer research. The federal government has spent more than $105 billion on cancer research since 1971 (Spector, 2010), and while that number may seem wonderful if you are a politician on the stump, we the taxpayers shell out nearly half of that figure per year just to treat cancer via Medicare.

Curing cancer is a one-time cost: once we eliminate this plague it will never come back. Yet we seem content to continue along, forking over the money to treat the problem but we are too stingy to look for a solution. The $105 billion that the federal government has spent on cancer research over the past 40 years is what we should be investing in this endeavor each and every year.

If we are able to effectively eliminate cancer, our investment in research would be paid back millions of times over. Imagine if those nearly 8.5 million years of life were spared – the unrealized earnings and contribution to the economy and society that could have been were it not for cancer are staggering. By the year 2020 the world will be losing $1.47 trillion per year to cancer. That is approximately 10% of the current gross domestic product of the United States. It is the net worth of the world’s richest man 37 times over, the entire gross domestic product of Canada, and the total value of the global electronic equipment market – and we are not realizing those gains every year because of cancer.

I began researching this topic with a skeptical eye on cancer research, believing that maybe the money we are spending on research was all in vain and would be better used doing something else. But the evidence is overwhelming that what we ought to be doing is increasing government funding for cancer research many times over. What we have spent over the past 40 years should be what we spend every year. The economic and social contributions that could have been were it not for cancer and those that will be because we cure cancer will far outweigh the cost of doing so.

Afterword

This post certainly does not cover all of the aspects of this topic. I have not taken into account the additional tax burden required to fund such an aggressive research initiative as I have advocated for in this paper, nor did I take into account the millions of dollars which are donated and spent by individuals and private institutions. I did not consider the amount of funding for cancer research provided by the states rather than the federal government or provide any type of framework for how new funding should be allocated. However, I believe that these omissions do not even begin to put a dent in the argument in favor of a greatly expanded effort by the federal government to fund cancer research, drug development, clinical trials, and more. The cost of treatment and life lost to cancer is so astounding on an individual, social, economic, and fiscal level that there is no reasonable argument against drastically

increasing the effort to eliminate cancer.

Bibliography

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Spector, R. (2010). The War on Cancer: A Progress Report for Skeptics. The Skeptical Inquirer , 25-31.