Advances in cancer treatment mean that more than twice as many people are beating the disease than in the 1970s. But, while the next generation of drugs and therapies should further improve survival rates, claims costs could cripple corporate medical schemes.
Often with six-figure price tags, the latest treatments are already putting schemes under strain.
“Over the last 12 months, I’ve seen more clients hit with a premium increase of 100 per cent- plus as a result of a large cancer claim,” says Aon Employee Benefits principal Rachel Western. “Employers want an all-inclusive cancer benefit but they don’t realise how risky this is.”
This desire to offer comprehensive cancer cover is understandable when taking the latest drugs and treatments into consideration. Many offer the potential for patients to live longer, healthier lives, fuelling the belief that one day, cancer will be just another chronic condition.
“Every aspect of cancer treatment is changing rapidly,” says Dr Subashini M, associate medical director at Aviva. “Where chemotherapy, radiotherapy and surgery used to be the options for cancer patients, it’s now moved into targeted treatment and immunotherapy. These are huge advances.”
Targeted treatment, which has been seen with drugs such as Herceptin and Imatinib, works by attacking the cancer directly rather than taking a broad-brush approach that damages healthy cells too. This can reduce the side- effects and be more effective.
Personalised treatment is also helping. With this, genomic testing enables a doctor to prescribe treatment that will work best for the individual’s cancer rather than where it is in their body.
Immunotherapy is also emerging as a powerful way to treat cancer. This works by strengthening the patient’s immune system so it is better able to recognise and attack cancer cells.
Several types of immunotherapy are already in use including monoclonal antibodies and
cytokines but the latest to become available is CAR T therapy. This is used primarily for blood cancers such as leukaemia and lymphoma. Healix Health Services head of clinical services Keira Wallis describes it as bootcamp for the body’s T-cells. “With CAR T therapy, the T-cells are genetically engineered to recognise and attack a specific cancer marker,” she explains. “It’s very effective when it’s successful but it requires a 28-day hospital stay and there are lots of complications and side effects. As a result, it is only used in certain cases.”
The potential side-effects also mean it’s very much a last chance treatment, with patients only offered it after they have had two other forms of therapy.
All of these advances come at a price. “A claim where someone has CAR T therapy can easily come in around the £500,000 mark,” says Western.
Further pressure is put on claims costs as a result of the types of treatment currently being used. “Both blanket and targeted treatment are available at the moment,” says Wallis. “Research is also focusing on using combinations of drugs: these can work better but if someone ends up on two or three drugs instead of one, this will increase costs.”
For a corporate medical insurance scheme, the implications of these cost pressures are unnerving. “One large claim could push premiums up enough to shut down the scheme altogether,” says Western. “If we’re not careful, these cancer costs could end up pricing medical insurance out of the market.”
In spite of the financial implications, it can be very difficult for an employer to remove cancer cover. “I wouldn’t advise a client to remove cancer cover,” says Stackhouse Poland managing director, health & protection Marcia Reid, who is also a member of the Association of Medical Insurers and Intermediaries’ executive committee. “Medical insurance covers what could possibly go wrong: removing cancer cover is the route to unhappiness. Employees value it but it can also benefit the business if they’re able to access treatment at a convenient time.”
As cancer is so emotive, removing it can also send out a very negative signal to employees. Fuelled by tabloid tales of people being denied drugs and lengthy waiting lists, employees often feel nervous about NHS care.
These fears are ungrounded says Wallis. “Work by the National Institute for Health and Care Excellence (NICE) has got rid of the postcode lottery and, although there are differences around the country, most areas are meeting the government targets,” she says. “In addition, around 80 per cent of all licensed cancer drugs are available on the NHS, with any restrictions down to NICE’s guidelines on cost-effectiveness.”
While the NHS may be delivering a good standard of cancer care now, Howden Employee Benefits & Wellbeing head of corporate consulting Cheryl Brennan says it faces a perfect storm thanks to the increasing cost of treatment and the ageing population. “Without significant investment, the NHS is likely to see a significant funding gap,” she adds. “Advances in technology might create polarisation, with the NHS unable to keep up.”
Given this, medical insurance providers are looking at ways to enable employers to maintain cancer cover. Often this comes down to more proactive claims management. Mm says her company uses a value-based approach wherever possible. “We have a discussion with the employer around expectations but will use a blend of NHS and private treatment in line with the budget and the employee’s needs,” she explains. “We have to be there for the customer at their time of need.”
As well as introducing a more blended approach, employers could also consider pushing some of the cost on to employees. Western says that a scheme could exclude cancer cover but give employees an option to pay for a cancer top-up.
Insurers are also looking at other ways to support employees diagnosed with cancer. For example, Aviva’s Cancer Essentials is a blend of critical illness and its cancer drugs proposition, giving a £5,000 lump sum on diagnosis plus access to up to £100,000 of cancer drugs if they can’t be accessed on the NHS.
There is also more work that can be done around cancer prevention. “Lifestyle plays a significant part in some cancers,” says Mm. “Providing employees with a wellbeing proposition that helps them make the right choices can reduce their risk of cancer. It needs a holistic approach.”
Education, education, education
With cancer such an emotive topic, it’s essential that employers understand the financial implications. “We’re engaging in more open conversations with clients about the potential impact of providing comprehensive cancer cover,” says Western. “Given the risks, there is an opportunity to explore more cost-effective options.”
Advisers also have an important role to play when it comes to safeguarding a client’s premium following a large cancer claim. “On a fully insured scheme a large cancer claim can mean the premium increases,” says Brennan. “It’s fair that the insurer takes this into account but we would draw their attention to the fact that, although it’s a large claim, it’s unlikely to happen again.”
As these new drugs and treatments emerge, it could be a bumpy ride for the medical insurance sector. However, longer-term, the prognosis is much more positive. “Personalised treatment should help to control costs,” says Wallis. “By giving the patient the most appropriate drug for their cancer it should save time and money.”
And, with all these advances offering the prospect of further improvements to survival rates, finding ways to manage claims costs over the next few years could be a small price to pay.