Aim: This paper focuses on short-run and long-run dynamics of a breast cancer diagnosis on monthly healthcare expenditure (HCE) and out-of-pocket costs among survivors.

Background: Breast cancer survivors require continuing care which leads to substantial resource use and subsequently increased HCE. This may pose a threat to their income, at an individual level. At a societal level, understanding its effect on the universal healthcare system, Medicare, is vital for informed decision-making on resource allocation.

Methods: This paper applies statistical models aimed at understanding dynamic effects. It applies an event study using a two-part panel model.

Data: This paper draws on data from the Australian Longitudinal Study on Women's Health linked to high-frequency administrative data from Medicare Benefit Schedule, Pharmaceutical Benefits Scheme, Australian Cancer Database, and National Death Index.

Results: The results reveal that a diagnosis leads to a persistent and substantial increase in HCE and out-of-pocket costs, with the largest increase occurring in the first six months of diagnosis, although the effects' duration and magnitude vary by the type of healthcare service and pharmaceuticals. A long-term effect is observed indicating more follow-up care in secondary care rather than primary care. Large and short-run effects are observed for operations and radiotherapy, while large and long-run effects are observed for imaging services. These effects are congruent with clinical guidelines. Anti-neoplastic and immuno-modulating agents, such as chemotherapy and hormone therapy, emerge as significant long-run pharmaceutical cost drivers. Additionally, HCE is directly proportional to the size of the tumour.

Conclusion: Understanding these financial repercussions of breast cancer, on the publicly funded healthcare system is particularly important in the context of ageing populations, and advancements in technologies that contribute to increasing survival rates. Overall, the results from this study enhance the understanding of the broader economic impact and offer insights for informed policy making.