Medicare Payments, Average Age at Diagnosis, and Average Years of Survival by Site of Cancer



Female Breast


Colon or Rectum


Total payments from diagnosis to deatha






Average payments per yeara






Average age at diagnosis






Average years of survival






a 1990 dollars per person-year.

SOURCE: Riley et al., 1995.

Managed Care

Although the majority of Americans insured through employment-based plans, 73 percent in 1995, are enrolled in some type of managed care plan (President's Advisory Commission, 1998), less than one-half of newly diagnosed cancer patients are in such a system. This decreased exposure to managed care occurs because 60 percent of individuals newly diagnosed with cancer are elderly and covered by Medicare, and 87 percent of Medicare beneficiaries have opted for traditional fee-for-service (FFS) care (HCFA, 1998).

Managed care can be defined as an entity that assumes both the clinical and the financial responsibility for the provision of health care for a defined population (Donaldson, 1998). It is, however, difficult to distinguish one type of managed care organization from another (Box 2.2).

With the shift to managed care, health insurance products have adopted features that directly influence how care is delivered—what services are offered, who provides them, and how they are organized (President's Advisory Commission, 1998). The relationship between managed care and quality is not clear, and evidence can suggest that managed care is as good as, worse than, or better than fee-for-service care—depending on which research one turns to (Miller and Luft, 1997). Managed care presents "both a problem and an opportunity for cancer care" according to the President's Cancer Panel (President's Cancer Panel, 1997). On one hand, managed care organizations (MCOs) may restrict patients' access to oncology specialists, limit the use of new therapeutic agents (e.g., closed drug formularies, off-label use of drugs), or deny coverage of care offered as part of a clinical trial. Furthermore, physicians within MCOs may be at financial risk and so may not fully assume the role of patient advocate. On the other hand, proponents of managed care applaud the success of MCOs in curbing health care spending and suggest that managed health care promotes preventive services, standardizes "appropriate" care by adopting clinical practice guidelines, and often provides comprehensive disease management for those with chronic illnesses such as cancer. For Medicare beneficiaries, more extensive coverage of outpatient drugs and other ancillary services by HMOs than FFS plans is also viewed as particularly beneficial for cancer patients. The limited evidence regarding the way in which managed care has affected the quality of cancer care is reviewed in Chapter 5.

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