2. The answer will be wrong. The reason is that the censoring occurs on a time scale, not a $ scale: you don't stop observing someone because total cost hits a threshold, but because calendar time does. The KM routines assume that the censoring process and the event process are on the same scale. The result can be an overestimation of cost. See Dan-Yu Lin, Biometrics 1997, "Estimating medical costs from incomplete follow-up data".
Having now skimmed the paper this is long term follow-up. In my particular case the patients are getting treatment for relatively short periods (median time to stopping treatment will be ~ 9months) and will discontinue treatment relatively quickly (I'd be surprised if anyone is still on treatment 3-4 years out). I only want the costs of that treatment not the costs for their overall care to death. I'm not sure how that affects things but hoping it makes life simpler.
Calum
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