The following cost estimates were calculated by Council staff based upon independent research and information submitted in response to Senate Bill 39. It should be recognized that any variation between staff assumptions and actual coverage rates, utilization rates, screening costs, etc., may cause the actual financial impact of Senate Bill 39 to differ from the estimates provided here. For example, the submission from the Insurance Federation assumed that utilization of screening procedures will not increase significantly if Senate Bill 39 is enacted. If this would be the case, the actual cost of Senate Bill 39 may be less than staff estimates.
Broad assumptions were used to estimate the population eligible for colorectal cancer screening benefits under Senate Bill 39. The most recent figures show Pennsylvania's total population age 50 and older to be 3.6 million. Information from the Health Care Financing Administration and other sources show that 91% of the population age 65 and older has coverage through Medicare Part B, 11.1% of the population age 50 to 64 has no insurance coverage, and that 50% of the privately insured population age 50 to 64 had coverage through ERISA exempt employers.
Staff estimates the potential pool of individuals eligible for colorectal cancer screening benefits to be the following:
| 3,601,232 | Total population age 50 and over |
| (1,740,120) | Population aged 65 and over covered by Medicare Part B |
| (187,480) | Uninsured population between 50 and 64 |
| (750,766) | ERISA exempt population aged 50 to 64 (50% of the privately insured population aged 50 to 64) |
| 923,114 | TOTAL ELIGIBLE POPULATION |
|---|
Council staff used the 40 percent figure provided by the Managed Care Association in determining the eligible population covered for the proposed screening benefits under health maintenance organizations. Staff further estimated that an additional 20 percent of the population may also have coverage for these tests (based on information received from Highmark which states that "diagnostic" procedures are covered if an individual is symptomatic). Therefore, staff estimated that between 40 percent and 60 percent of the population already has access to colorectal cancer screening benefits. In doing so, the potential pool of beneficiaries is reduced to between 369,246 and 553,868.
Council staff recognizes that even when benefits are available, they are not fully utilized. One of Pennsylvania's goals for Healthy People 2000 is to have 50% of the population receive a fecal occult blood test within the previous two years. Based on this goal, staff estimated that 50 percent of the eligible population (between 184,623 and 276,934 people) will undergo annual fecal occult blood testing. An article published by the Centers for Disease Control reported that in 1992-1993, 28% of survey respondents reported having a sigmoidoscopy in the previous five years. Based on this figure, staff estimated that 25% of the eligible population will undergo a sigmoidoscopic examination every four years. Staff assumed that since coverage for sigmoidoscopies is expected to be once every four years, only one quarter of the eligible population will receive testing in any one particular year. Based on this assumption, staff estimated that 6.25% of the eligible population (between 23,078 and 34,616 people) will utilize sigmoidoscopy benefits in one year.
The only figures which the Council received concerning the cost of screening examinations were from the Managed Care Association. They estimated the cost of a fecal occult blood test is between $5 and $7, and the cost of sigmoidoscopy is between $180 and $350. Based on these figures, staff assumed the average cost of a fecal occult blood test to be $6 and the cost of a sigmoidoscopy to be $265. The only figures which the Council received concerning the cost of screening examinations were from the Managed Care Association. They estimated the cost of a fecal occult blood test is between $5 and $7, and the cost of sigmoidoscopy is between $180 and $350. Based on these figures, staff assumed the average cost of a fecal occult blood test to be $6 and the cost of a sigmoidoscopy to be $265.
Using the population estimates, existing coverage, utilization rates, and cost information estimated above, staff estimated that the benefit for annual fecal occult blood testing incurs costs between $1.1 million and $1.7 million annually. Based on the same figures, the total cost of coverage for sigmoidoscopic examination every four years would be between $6.1 million and $9.2 million annually. Combining these cost estimates, staff estimates that mandating coverage for colorectal cancer screening may cost between $7.2 million and $10.9 million annually. Using the population estimates, existing coverage, utilization rates, and cost information estimated above, staff estimated that the benefit for annual fecal occult blood testing incurs costs between $1.1 million and $1.7 million annually. Based on the same figures, the total cost of coverage for sigmoidoscopic examination every four years would be between $6.1 million and $9.2 million annually. Combining these cost estimates, staff estimates that mandating coverage for colorectal cancer screening may cost between $7.2 million and $10.9 million annually.
It is important to note that the costs for treating early stage (localized) cancer are often less than for treating later stage cancer (that which has spread). In discussing the treatment costs for colorectal cancer, the U.S. Office of Technology Assessment estimated that the cost of treating early colorectal cancer was $35,000 vs. $45,000 for treating late stage colorectal cancer. (These figures were estimated in a study sponsored by the National Cancer Institute.) It is important to note that the costs for treating early stage (localized) cancer are often less than for treating later stage cancer (that which has spread). In discussing the treatment costs for colorectal cancer, the U.S. Office of Technology Assessment estimated that the cost of treating early colorectal cancer was $35,000 vs. $45,000 for treating late stage colorectal cancer. (These figures were estimated in a study sponsored by the National Cancer Institute.)
According to the American Cancer Society, only 37% of colorectal cancers are currently detected at a localized stage. Using this figure staff estimated that of the 7,900 new diagnoses of colorectal cancer in Pennsylvania this year, approximately 3,000 will be diagnosed at an early stage and 4,900 will be diagnosed after the cancer has spread.
Proponents of colorectal cancer screening hope that if utilization of screening tests increases, the percentage of cancers detected at an early stage will also increase. This could have an impact on the total cost of health care. If, for example, the percentage of colorectal cancer diagnosed at an early stage increases from 37% to 50%, an additional 1,000 Pennsylvanians may be diagnosed with early stage colorectal cancer. Applying the estimate that treating early stage colorectal cancer is $10,000 less than treating late stage colorectal cancer, this would suggest cost savings of $10 million. In this scenario, the potential increases in cost due to expansion of coverage for screening would be offset by decreases in the cost of treating colorectal cancer, suggesting only a minimal change in the total cost of health care.
Broad assumptions were again applied to estimate the population eligible for prostate cancer screening benefits under Senate Bill 39. The most recent figures show Pennsylvania's male population age 50 and older to be 1.6 million. As in the colorectal cancer scenario, staff again estimated that 91% of the population age 65 and older has coverage through Medicare Part B, 11.1% of the population age 50 to 64 has no insurance coverage, and that 50% of the privately insured population age 50 to 64 had coverage through ERISA exempt employers.
Staff estimates the potential pool of individuals eligible for prostate cancer screening benefits to be the following:
| 1,562,953 | Total male population age 50 and over |
| (694,887) | Male population aged 65 and over covered by Medicare Part B |
| (88,727) | Uninsured male population between 50 and 64 |
| (355,307) | ERISA exempt male population aged 50 to 64 (50% of the privately insured population aged 50 to 64) |
| 424,032 | TOTAL ELIGIBLE POPULATION |
|---|
Staff again used the estimate that a minimum of 40 percent of the eligible population already has coverage for the proposed screening benefits through health maintenance organizations and an additional 20 percent of the population may also have coverage for these tests (for diagnostic purposes). Therefore, staff estimated that between 40 percent and 60 percent of the population already has access to the prostate cancer screening benefits proposed under Senate Bill 39. In doing so, the potential pool of beneficiaries is reduced to between 169,613 and 254,419. Staff again used the estimate that a minimum of 40 percent of the eligible population already has coverage for the proposed screening benefits through health maintenance organizations and an additional 20 percent of the population may also have coverage for these tests (for diagnostic purposes). Therefore, staff estimated that between 40 percent and 60 percent of the population already has access to the prostate cancer screening benefits proposed under Senate Bill 39. In doing so, the potential pool of beneficiaries is reduced to between 169,613 and 254,419.
Again, utilization rates of screening procedures are recognized to be less than 100 percent. Pennsylvania's goal for Healthy People 2000 is to increase to at least 40 percent the proportion of people aged 50 and older who have received a digital rectal examination in the previous year. Department of Health figures estimate that in 1995, 43% of men over age 40 had received a digital rectal examination in the previous year. The Department also reported that 38% of men age 40 and over have ever had a prostate specific antigen test. Based on these figures, staff estimated that 50% of the eligible population (between 84,807 and 127,210 men) will undergo annual digital rectal examinations and that 40% of the eligible population (between 67,845 and 101,768 men) will undergo annual prostate specific antigen testing.
Council staff estimated the cost for prostate cancer screening procedures based upon information provided by the Managed Care Association. Staff estimated the cost of a prostate specific antigen test to be $70 (a cost range of $40 to $100 was provided by the Managed Care Association). According to the Managed Care Association, the cost of a digital rectal examination would be included in the cost of an office visit. Staff, therefore, estimated the cost of a digital rectal examination to be $35. Council staff estimated the cost for prostate cancer screening procedures based upon information provided by the Managed Care Association. Staff estimated the cost of a prostate specific antigen test to be $70 (a cost range of $40 to $100 was provided by the Managed Care Association). According to the Managed Care Association, the cost of a digital rectal examination would be included in the cost of an office visit. Staff, therefore, estimated the cost of a digital rectal examination to be $35.
Using the population estimates, existing coverage, utilization rates, and cost information estimated above, staff estimated that the benefit for annual digital rectal examinations incurs costs between $3 million and $4.5 million annually. Based on the same figures, the total cost of coverage for annual prostate specific antigen tests would be between $4.7 million and $7.1 million annually. Combining these cost estimates, staff estimates that mandating coverage for prostate cancer screening may cost between $7.7 million and $11.6 million annually. Using the population estimates, existing coverage, utilization rates, and cost information estimated above, staff estimated that the benefit for annual digital rectal examinations incurs costs between $3 million and $4.5 million annually. Based on the same figures, the total cost of coverage for annual prostate specific antigen tests would be between $4.7 million and $7.1 million annually. Combining these cost estimates, staff estimates that mandating coverage for prostate cancer screening may cost between $7.7 million and $11.6 million annually.
Once again, the cost for treating early stage prostate cancer may be less than treating late stage cancer. According to Fox Chase, one study estimated that this difference in cost was $30,000. It should be noted, however, that some men choose not to undergo treatment for localized prostate cancer, preferring to use expectant management instead. Once again, the cost for treating early stage prostate cancer may be less than treating late stage cancer. According to Fox Chase, one study estimated that this difference in cost was $30,000. It should be noted, however, that some men choose not to undergo treatment for localized prostate cancer, preferring to use expectant management instead.
According to the Pennsylvania Department of Health, over 80% of prostate cancers diagnosed in Pennsylvania in 1994 were diagnosed at the local stage. Since the great majority of prostate cancer is already being diagnosed at an early stage, increased utilization of screening tests may not have a substantial impact of the percentage of early stage diagnoses. Therefore, while the potential for cost savings exists, it is difficult to assess the potential impact. The impact, however, may not be significant due to the fact that the majority of prostate cancer is already diagnosed in an early stage and some men choose treatment by expectant management.
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