Understanding regional variation in Medicare expenditures for initial episodes of prostate cancer care

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.

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.

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.

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.