Expecting cancer costs to spike: A Q&A with Sach Jain

An increased incidence of cancer diagnosis accompanied by rising cancer care costs is causing considerable concern for employers. By 2030, U.S. cancer spend is expected to rise to $246 billion, half of which will be borne by self-insured employers.

BenefitsPRO spoke with Sach Jain, Founder and CEO of Carrum Health, about a recent report outlining trends from a poll of 100 large employers across the U.S. about their top cancer care concerns. Cost was #1, given cancer accounts for nearly 16% of their health care spend and is expected to keep rising.

Benefits leaders at organizations with 5,000+ employees were surveyed about what they’re doing for oncology benefits, the specific drivers of cancer care and costs, and what they’re looking for from solutions. Jain shared data and insights from the report, which indicates employers are at a tipping point.

What are employers’ main worries about cancer care benefits?

Cancer is the second leading cause of death in the U.S. The number of new cancer cases is growing year over year—the American Cancer Society predicts there will be more than 2 million new diagnoses this year for the first time ever—and the rate of cases in younger adults is increasing. Nearly 17 million individuals are trying to navigate the current health care system and pay for their cancer care today.

More than 4 out of 5 employers reported that oncology is one of their top three health care cost drivers, with almost half ranking it first, and they believe oncology spend will increase by up to 30% over the next three years. Employers are struggling to manage this rising cost while providing better health benefits experience for their employees.

What is driving the rise in costs?

The high prevalence of cancer incidence is the biggest driver of cost, as well as the rise in later-stage cancer diagnoses over the last 15-20 years. Since 2020, spend has increased even further due to delayed care and preventive screenings during COVID. Within cancer care, outpatient treatments, including chemotherapy and radiation, and medication are the top two areas of spend. To frame that for you, in 2020, spending on cancer drugs in the U.S. reached $71 billion, an 87% increase from 2015.

The vast majority of this spend has historically been paid for via fee-for-service, with high cost variability and limited ties to quality or performance outcomes, issues that could be addressed by switching to a value-based Centers of Excellence (COE) model.

What is employers’ take on current oncology solutions? How are they tackling the challenge?

Employers definitely have point solution fatigue in a market with largely fragmented oncology solutions that create challenges and confusion for them and their members. Members have to navigate between different benefits vendors for behavioral health support, surgery/chemo, care navigation, virtual second opinions, etc., which can be daunting.

Eighty-three percent of employers surveyed were not able to measure the ROI or impact of their current cancer solutions, making it difficult to understand their advantages or rein in their soaring cancer care spend. Benefits managers are struggling to keep pace with the complexities and advancements in cancer care. Evaluating new and innovative solutions is only made more difficult when there are so many options, many of which are less mature and thus riskier to implement. Self-insured employers are looking for comprehensive solutions with a breadth of network across geographies, cancer types, and wraparound services. The market is nascent but has made great strides in the last few years as cancer care has become a higher priority for employers.

Related: How investing in Cancer research now will save money in the long term

What are employers looking for and where do you see the market heading?

Employers face a conundrum – they need to address rapidly rising oncology spend within their organizations, while also providing quality care options for their employees.

They have spoken up loud and clear: they want a one-stop shop where a single partner can do it all and offer cost-effective treatment, mental health support, care navigation, and early detection screening. When ranking their desired oncology solutions, employers ranked COEs and other value-based solutions as number one.

The challenge – and the opportunity here – is helping employers develop a strong business case, navigate the marketplace, and identify the right solution that provides the scope and quality they desire.