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Health Care Costs and Financing

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Medicare payment is related to use of breast-conserving surgery and mastectomy among elderly women with breast cancer

Seventy percent of women with breast cancer are diagnosed at an early stage of the disease. Since the late 1980s, it has been generally accepted that breast-conserving surgery (BCS), which is usually followed by radiation therapy, and mastectomy (MST) equally affect the survival of women with early stage breast cancer. Apparently, Medicare fees paid to physicians for MST and BCS influence their choice of treatment for elderly women with breast cancer. A 10 percent higher BCS Medicare fee was associated with a 7 to 10 percent higher BCS rate, while a 10 percent higher MST fee was associated with a 2 to 3 percent lower proportion of women receiving BCS, according to a study supported in part by the Agency for Healthcare Research and Quality (HS08395).

Jack Hadley, Ph.D., Jean M. Mitchell, Ph.D., and Jeanne Mandelblatt, M.D., M.P.H., of Georgetown University used data from Medicare files, the American Hospital Association's Annual Survey of Hospitals, and the 1990 census to investigate whether Medicare fees for BCS and MST affected the rate of BCS across 799 ZIP code areas in 1994. The average fees paid by Medicare across the areas studied were $350 for BCS and $824 for MST, with a greater variation in the BCS fee.

Besides higher Medicare fees for MST, factors that significantly lowered the likelihood that women would receive BCS were other medical problems besides breast cancer; longer distance to a radiation therapy hospital, teaching hospital, or cancer center; and a greater percentage of poverty-stricken women in the area (who were less likely to be able to afford the out-of-pocket costs associated with BCS outpatient visits). Higher hospital input costs (for example, average salary per full-time hospital employee) were associated with a higher rate of BCS, which often can be performed as an outpatient procedure. Variations in age, race, and metropolitan populations had small or insignificant effects.

See "Medicare fees and small area variations in breast-conserving surgery among elderly women," by Drs. Hadley, Mitchell, and Mandelblatt, in the September 2001 Medical Care Research and Review 58(3), pp. 334-360.

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