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Skin cancer is among the most costly of all cancers to treat for the Medicare population.

BACKGROUND: Compared with other malignancies, nonmelanoma skin cancer (NMSC) is associated with much less morbidity and mortality. NMSC is, however, far more common than other malignancies. The cost of managing NMSC has not been assessed.

OBJECTIVE: The purpose of our study was to determine where the cost of NMSC management ranks among other cancers in the Medicare population.

DESIGN: Representative Medicare part A and B claims data were obtained from the Medicare current beneficiary survey, 1992 to 1995. Claims associated with cancer costs were identified using the International Classification of Diseases, Ninth Revision, Clinical Modification codes. Weights were applied to obtain nationally representative estimates.

RESULTS: Average Medicare expenditure on cancer management was $13 billion per year. The 5 most costly cancers to Medicare were lung and bronchus, prostate, colon and rectum, breast, and NMSC. The mean annual cost per patient using Medicare for all cancers was $17,094. Malignancies of lung and bronchus, colon and rectum, breast, and prostate were 11 to 19 times more costly per affected patient than NMSC.

CONCLUSION: In addition to classifying cancers by number of cases and number of deaths, the financial impact of treatment can also be used to prioritize different malignancies. Such a scheme ranks NMSC far higher than would death statistics. In light of its already high and rising incidence, the cost of NMSC care to Medicare is likely to increase. However, to maintain the cost-effective management of NMSC, it is essential to preserve the current low per-patient cost of its management.

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