You are an employer of a large construction company (1,000 employees) for whom y

Question

You are an employer of a large construction company (1,000 employees) for whom you are responsible for covering healthcare benefits. In your community there are two main centers that provide cancer care. Cancer Center A offers discounted rates compared to Cancer Center B, but Cancer Center A does not provide care for 5% of rare cancers. Cancer Center B provides comprehensive cancer care including access to clinical trials for rare cancers. Cancer Center B’s average negotiated rates are 15% higher than those of Cancer Center A. If you choose Cancer Center A and have an employee with a rare cancer, you will be responsible to cover costs of care at Cancer Center B at fee for service rates. How would you navigate this conundrum?

Explanation / Answer

Accoring to www.cancer.org, 13% of cancer cases are rare occurence cancer. The current cancer rates are 500 per 100,000.

Assuming the population is uniformly distributed, the chances of number of people attracting cancer in a group of 1000 is :

(500/100000)*1000 = 5 person per 100.000

and the chances of attracting a rare cancer is 0.65 in 100,000.

0.65 in 100,000 is a higher number and hence, they should opt for option B.

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