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Weathering the unexpected costs of cancer

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Weathering the unexpected costs of cancer
OMA Insurance
2/6/2015
Cancer can be expensive, which is why a proper plan is necessary—for both you and your patients.

Two in five Canadians will develop cancer in their lifetime. If that statistic isn't staggering enough, in 2014 alone it's estimated that more than 190,000 new cases were diagnosed—with approximately 52 percent falling under either lung, breast, colorectal, or prostate cancer, according to the Canadian Cancer Society[1].

Some of these patients, in all likelihood, walked through your office doors last year—demonstrating, first-hand, the dire emotional and physical toll this disease can take on a person. And while it's important to educate yourself about the obstacles they will encounter on their journey, to assist them in whatever way possible, it's also important to remember that you, and your family, are not excluded from these statistics.

Making sure your patients—and your family—are prepared for the possibility of cancer before it strikes is essential to limiting its negative financial impacts. Many of the everyday costs of cancer aren't covered by government-funded health care or basic health plans. Not only does an unexpected diagnosis have the potential to drive patients into debt while they undergo treatment, but with one in four Canadians expected to die of cancer—more than 76,000 in 2014 alone, according to the Canadian Cancer Society—many families will be left behind to repay that debt, with a significantly lower household income.​

​If there is an upside to these grim statistics, however, it's that this financial outcome isn't inevitable. Armed with the proper information, you can help eliminate potential financial stresses down the road, allowing your patients, you and/or your family to implement important safeguards now and avoid a financial distraction later on.


If can​​cer had a price tag

​​Over the past 30 years, cancer incidence has been on the rise despite advances in medical research and a decreasing cancer mortality rate. Our aging population is the primary cause[2]. As this trend continues, we can expect the number of cancer diagnoses to increase further.

This has a significant financial impact on our economy, health care system, and individual cancer patients alike. Cancer is the fourth-most costly disease in Canada. In 2000 (the most recent year for which data is available), total cancer costs amounted to $17.4 billion. While $2.6 billion of that total can be attributed to direct health care costs, such as physician and hospital expenses, $14.8 billion was a result of indirect costs, such as lost productivity and premature death[3].

The cost of cancer is also reflected in the significant number of disability and critical illness insurance claims made each year. From 2010 to 2013, OMA insurance paid out $11.25 million in cancer critical illness claims to Ontario physicians, and $12,425,231 in cancer-related disability claims between 2009 and 2014. It should also be noted that, between September 2013 to August  2014, 60 percent of the life insurance claims OMA paid out were due to deaths associated with cancer or tumours, and totalled more than $8.6 million.

Despite these claims, many cancer patients are still burdened with overwhelming out-of-pocket expenses—costs for which they are often ill prepared. Some of these costs are more obvious, such as home care, personal support workers, home modifications, lost income, and treatments not covered, such as those forms that are experimental, not approved by provincial health insurance plans, or administered out-of-country.

But even these "expected" expenses occasionally catch people off guard. For example, when factoring in loss of income, you also need to consider the caregivers—the family and friends—who take time off work to usher you to appointments and care for your children. Many cancer patients don't realize that chemotherapy may only be covered if it's performed in a hospital—if you opt to take it in pill form, either for convenience or due to an aversion to needles, you may have to pay up to thousands of dollars per week. And with recent cuts to the in-home care hours offered by Ontario's Community Care Access Centres (CCACs), combined with a shortage of home care staff, finding affordable home care is becoming increasingly challenging. In the Ottawa region, for example, the Ottawa Sun reports that as many as 1,000 Champlain CCAC patients who rely on essential home care have been reassessed recently, with 500 losing the service altogether. The waiting list in that area currently sits at 1,800.

Expecting the unexpected

In addition to these costs, there are the less obvious expenses—the little things you would never think of, but that drive many people into significant debt. Below are the mean, out-of-pocket costs the average cancer patient spends in a 30 day period:

   ​ ​​​O​ne Month - ​Out of Pocket CostsCost
​​Complementary/Alternative medicine:$451.11
​​​ ​Family​ care:$388.89
​​​ ​Devices:$323.54
​​​ ​​Housekeeping:$217.78
​​​ ​Accommodation:$167.74
​​​ ​​Homecare:$150.67
​​​ ​Drugs:$85.39
​​​ ​Vitamins:$74.03
​​​ ​Other:$58.29
​​​ ​Imputed travel:$371.94
​​​ ​Parking/Fares:$47.02
​​​ ​Monthly total: $2,336.41
​​​ ​​​ ​​​
​​​​​​ ​​

Source: Longo, CJ, R. Deber, AP Williams, and D. D'Souza. "An Examination of Cancer Patients' Monthly 'out-of-pocket' Costs in Ontario, Canada." European Journal of Cancer Care 16, no. 6 (2007): 500-7. http://www.ncbi.nlm.nih.gov/pubmed/17944764.​


Th​e hidden costs of cancer

The list of out-of-pocket, unexpected cancer costs is extensive and can contain hundreds of hidden expenses. Here are a few examples:

  • natural, organic, or macrobiotic diets
  • parking
  • vitamins and supplements
  • freezing eggs or sperm before starting radiation
  • dog walking
  • child care
  • special pillows, beds, canes, and safety rails
  • wheelchair rental
  • wigs
  • new clothing (as a result of weight loss)
  • bucket list items
  • tutors (for students with cancer)
  • travel costs
  • take-out or restaurant food

​Obviously, these costs vary depending on how many additional expenses you require, as well as what part of the country you're in. Parking costs alone, for example, range from being free (for cancer patients in Charlottetown) to $28 per day in Toronto.

Not all provincial/territorial drug plans are created equal, either. Certain jurisdictions, such as British Columbia, have drug plans that compensate patients for newer treatments. BC's program is also available to all provincial residents. Other provinces, in an attempt to stay within their budgets, shy away from more cutting edge treatments—and, as is the case in Ontario, only grant public funding of cancer drugs to financially-eligible residents.  Overall, BC has the best drug coverage, and Atlantic Canada the worst, when you factor in the range of cancer drugs covered, oral and parenteral cancer coverage, universal coverage of all residents, and the overall out-of-pocket costs of cancer patients[4]. Ontario lands somewhere in between.


The costs of cancer, a real-life example

A report commissioned by the Canadian Cancer Action Network and the Canadian Cancer Society entitled Financial Hardship of Cancer in Canada: A Call for Action, outlines the cancer expenses of one Manitoba family. The family traveled to Winnipeg and Brandon, from rural Manitoba, 26 times over a six-month period so their daughter could be treated for Hodgkin's lymphoma. Here is how the costs broke down:

Transportation ​​

$5,276.34 (13,028 km x 40.5 cents/kilometre, the rate used by the Manitoba government)

Parking

$880.00 ($20 x 44 days)

​Accommodation

$369 (This included 24 nights at Ronald McDonald House, an option that's not available if the patient is over 16)

​Food

$5,100.00 (Average of $75/day for 68 days)

​​Incidentals

$761.20 (44 days x $17.30/day, the rate used by the Manitoba government)

​​Lost w​ages

​$12,320 (44 work days at $350/day)

 

​​TOTAL $24,​706.54


Know your options

While supplemental health insurance definitely alleviates some of the financial stresses of cancer, not all plans offer the same coverage. Some co-payment plans, for example, require the patient to pay a portion of drug costs, often around 20 percent. For a round of treatment equaling $65,000—which is common for newer treatments that are typically not covered by government plans—that equates to $13,000. Some plans may have an annual cap, while others may enforce a lifetime cap.

While some provinces offer assistance in helping pay the deductible of private insurance claims, Ontario isn't one of them. That's why, when choosing disability or critical illness insurance, it's important to read the fine print and know what your plan entails. Both forms of insurance offer cash benefits that you can use for whatever you wish. The primary difference is that disability is tied to your income and is designed to replace it in the event of illness, meaning you must take a break from your practice to collect it. Critical illness insurance provides a payout for select types of illnesses—including some cancers—as defined in the policy.

Extended health care benefits will reimburse you for covered expenses, such as drug costs, physiotherapy, and required medical devices. That being said, each plan covers different expenses, with varying deductibles, so it's important to do your research beforehand and thoroughly understand the parameters of each.

A Health Spending Account (HSA) is an alternative benefits plan that can either supplement, or take the place of, a traditional health and dental plan. The primary difference is an employee's HSA account is stocked with a set amount of HSA dollars at the beginning of each benefit year. Employees and their families can then claim CRA-approved health and dental expenses throughout the year, allowing them to spend the funds on the benefits they need.

​Types of Insurance: Simplified

 

Disabi​lity Insurance covers your income if you can't work during your illness.

Professional Overhead Expense (POE) Insurance covers your office expenses while you're ill.

Critical Illness Insurance provides a one-time cash payout if a life threatening cancer diagnosis meets certain criteria.

Extended Health Care Insurance covers many of your medical expenses.​


Planning ahead

You may already have sufficient insurance coverage in place. Or perhaps you've set funds aside to weather this type of diagnosis. If you haven't, however, you're not alone. Many physicians, if not most, are under-insured—primarily because they don't invest the time to review their coverage as their needs, and income, change.​

John Sealey, a disability claims consultant and principal of Sealey/Manning Inc., has been helping physicians, medical students, and re​sidents with disability insurance claims for 35 years.

"I have only met two physicians who I believe were properly insured and that's because physicians usually buy disability insurance when they complete their residency and then never look at it again," he told the Alberta Medical Association in an article entitled From physician to acute care patient back to physician: how insurance helped Dr. Ian Rigby. Everyone hopes, or maybe expects, to be one of the three in five Canadians who won't be diagnosed with cancer in their lifetime. There's nothing wrong with that—after all, it's important to think positive. But it's possible to be an optimist and a pragmatist at the same time. Taking the time to think about the unthinkable—such as what will happen to your practice should you need to take time away from it—can provide substantial peace of mind. Just sitting down with a practice management consultant, accountant, or attorney, and taking advantage of their advice and expertise, can allow you to establish an emergency succession plan before an emergency hits. 

Taking steps to ensure an adequate amount of money is accessible, should you need it, rather than allowing it to be tied u​p in rigid investment vehicles or having to exhaust retirement savings is another way to weather unexpected costs. And, while you're at it, it makes sense to evaluate your spouse's insurance coverage to ensure they also have an adequate emergency plan in place should they have to take time off work due to illness.

There are very few things about cancer that you can control, which is why it's imperative to take advantage of the things that you can. This means eating healthy, not smoking, exercising regularly, and making sure you're adequately insured. While these steps won't guarantee a cancer-free life for you and your family, it will put you in a better position to fight it, should it come knocking on your door.

Cancer prepar​​edness: Do's & Don'ts

DO sit down with ​​a professional to establish an emergency succession plan for your practice.

​DON'T allow all your money to be tied up in rigid investment vehicles—leave some in an easily-accessible emergency fund.

DO evaluate your spouse's insurance coverage to make sure they're also protected should an illness strike

 

​ 
Sources:
Canadian Cancer Statistics 2014. Canadian Cancer Society's Advisory Committee on Cancer Statistics. Toronto, ON: Canadian Cancer Society; 2014. http://www.cancer.ca/~/media/cancer.ca/CW/cancer%20information/cancer%20101/Canadian%20cancer%20statistics/Canadian-Cancer-Statistics-2014-EN.pdf 
Financial hardship of cancer in Canada: A call for action. Canadian Cancer Society (Manitoba Division), Canadian Cancer Action Network. http://www.cancer.ca/~/media/cancer.ca/MB/get%20involved/take%20action/financial%20hardship%20of%20cancer%20in%20canada/financialhardshipofcancer-MB-EN.pdf

Longo, CJ, R. Deber, AP Williams, and D. D'Souza. "An Examination of Cancer Patients' Monthly 'out-of-pocket' Costs in Ontario, Canada." European Journal of Cancer Care 16, no. 6 (2007): 500-7. http://www.ncbi.nlm.nih.gov/pubmed/17944764.

[1] Canadian Cancer Statistics 2014. Canadian Cancer Society's Advisory Committee on Cancer Statis​tics. Toronto, ON: Canadian Cancer Society; 2014.
[2] ibid
[3] ibid
[4]​​ Financial hardship of cancer in Canada: A call for action. Canadian Cancer Society (Manitoba Division), Canadian Cancer Action Network. ​​​​​​