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Understanding Regional Variation in Medicare Expenditures for Initial Episodes of Prostate Cancer Care

Wang, Shi-Yi MD, PhD*,†; Wang, Rong PhD*,†; Yu, James B. MD*,‡; Ma, Xiaomei PhD*,†; Xu, Xiao PhD*,§; Kim, Simon P. MD, MPH*,∥; Soulos, Pamela R. MPH*,¶; Saraf, Avantika MPH; Gross, Cary P. MD*,¶

doi: 10.1097/MLR.0000000000000158
Original Articles

Objectives: To evaluate the contributions of patient and treatment factors to overall expenditures and regional variation for initial treatment of localized prostate cancer (CaP) in the Medicare program.

Research Design: Using the Surveillance, Epidemiology, and End Results–Medicare database, we identified 47,517 beneficiaries with localized CaP during 2005–2009 and matched noncancer controls. We employed hierarchical generalized linear models to estimate risk-standardized cancer-related expenditures for each hospital referral region. To identify key contributors to the variation, we sequentially added patient characteristics, treatment intensity (the percentage of patients receiving curative treatments), ancillary procedures (biopsy, hormone therapy, and imaging), and specific treatment modalities into the model. We categorized the expenditures according to the type of services to identify their relative impact on the expenditure variations.

Results: The mean expenditure on CaP-related care per CaP beneficiary was $15,900, including $1800 on surgery, $11,200 on radiotherapy, and $1900 on ancillary procedures. The expenditure difference between quintiles 5 and 1 was $6200. Patient characteristics explained 8.4% of this difference. Treatment intensity and treatment modalities accounted for an additional 21.2% and 31.2% of the variation, respectively. Between the highest and lowest expenditure quintiles, the difference in radiotherapy expenditure was $5000, whereas that in surgery or ancillary procedures was <$200.

Conclusions: There is substantial geographic variation in CaP expenditures, and the specific modality of radiotherapy is the most important contributor to this variation. Efforts to address the CaP care costs, such as bundled payment development, require targeting both treatment intensity and use of costly modalities.

Supplemental Digital Content is available in the text.

*Cancer Outcomes, Public Policy, and Effectiveness Research (COPPER) Center, Yale Cancer Center, Yale University School of Medicine

Department of Chronic Disease Epidemiology, Yale School of Public Health

Departments of Therapeutic Radiology

§Obstetrics, Gynecology, and Reproductive Sciences


Section of General Internal Medicine, Department of Internal Medicine, Yale University School of Medicine, New Haven, CT

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The collection of the California cancer incidence data used in this study was supported by the California Department of Public Health as part of the statewide cancer reporting program mandated by California Health and Safety Code Section 103885; the National Cancer Institute's Surveillance, Epidemiology, and End Results (SEER) Program under contract N01-PC-35136 awarded to the Northern California Cancer Center, contract N01-PC-35139 awarded to the University of Southern California, and contract N02-PC-15105 awarded to the Public Health Institute; and the Centers for Disease Control and Prevention's National Program of Cancer Registries, under agreement #U55/CCR921930-02 awarded to the Public Health Institute. The ideas and opinions expressed herein are those of the author(s) and endorsement by the State of California, Department of Public Health the National Cancer Institute, and the Centers for Disease Control and Prevention or their contractors and subcontractors is not intended nor should be inferred. The authors acknowledge the efforts of the Applied Research Program, NCI; the Office of Research, Development and Information, CMS; Information Management Services (IMS) Inc.; and the Surveillance, Epidemiology, and End Results (SEER) Program tumor registries in the creation of the SEER–Medicare database. The interpretation and reporting of the SEER–Medicare data are the sole responsibility of the authors. Also supported by the National Cancer Institute (R01 CA149045 and P30 CA016359).

The authors declare no conflict of interest.

Reprints: Shi-Yi Wang, MD, PhD, Department of Chronic Disease Epidemiology, Yale School of Public Health, 60 College Street, P.O. Box 208034, New Haven, CT 06520. E-mail:

© 2014 by Lippincott Williams & Wilkins.