Cancer is a dreaded disease. Though survival rates have improved in recent years, the treatment is long, painful, and expensive.
The recent focus on the high cost of prescription drugs has included specialty drugs to treat cancer. In 2015, researchers at the MD Anderson Cancer Center conducted an analysis of drugs used to treat blood cancer and concluded the costs could not be justified, even when they prolonged a patient's life.
Last year, researchers at the University of North Carolina found that a month's worth of treatment with the newest cancer drugs, on the market since 2014, were, on average, six times more expensive than the launch prices of similar drugs introduced in 2000, even after adjusting for inflation.
But it gets worse. As the cost of treatment goes up, researchers at the University of Georgia (UGA) found that when a husband or wife is diagnosed with cancer, the household income declines an average of 5%.
That's often because the caregiver's income goes down too. For men, it's an average decline of 5%. For women it's 9%.
Losing $5,000 to $9,000
“The average annual household income for the working-age couples we studied was about $100,000, so the loss of income per family is about $5,000 to $9,000, which is a pretty substantial decline,” said Vincent Pohl, assistant professor of economics at UGA . “In a situation where one household member has a devastating diagnosis, it leads to the whole household suffering economically.”
Often the person who has cancer can't work as much. But Pohl says the "caregiver effect" is when one one family member reduces his or her employment in order to support another.
“We thought that the household’s lessened income could happen in one of two ways,” Pohl said. “One is that the person who is diagnosed might not be able to work because they are getting treatment or they’re too sick to work. The second is what happens to their spouse: Does the spouse work more to make up for the lost income or does the spouse also reduce his or her labor supply in order to take care of the spouse that is diagnosed with cancer?"
The researchers found it's the latter. Pohl says spouses reduce their labor supply and therefore have lowered income levels, which leads to the household having lower income levels as well.
Contributor to bankruptcy
Before the passage of the Affordable Care Act, the largest contributor to bankruptcy was medical bills -- and in many cases it was bills for the treatment of cancer. Pohl says policymakers need to think about the implications of illness -- particularly chronic diseases like cancer.
He says disability insurance might cover the person with cancer, but it doesn't help the spouse who sacrifices his or her career.
“It doesn’t take into account that family members might have to take care of an individual and therefore might also lose their job or reduce their working hours and thus their income,” he said.