Economic evaluation of trends in cancer therapy. Marginal or average costs?

Cost evaluations of radiotherapy: What do we know? An ESTRO-HERO analysis

Although economic evidence is becoming mandatory to support health care decision-making, challenges remain in generating high quality cost data, especially for complex and rapidly evolving treatment modalities, such as radiotherapy. The overall aim of this systematic literature review was to critically analyse the type and quality of radiotherapy cost information available in cost calculation studies, from the health care provider's perspective, published since 1981. A selection process, based on strict and explicit criteria, yielded 52 articles. In spite of meeting our criteria these studies displayed large heterogeneity in scope, costing method, inputs and outputs. The limited use of conventional costing methodologies along with insufficient information on resource inputs hampered comparability across studies. A consistent picture of radiotherapy costs, based on methodologically sound costing studies, has yet to emerge. These results call for developing a well-defined and generally accepted cost methodology for performing economic evaluation studies in radiotherapy.

Radiotherapy cost-calculation and its impact on capacity planning

The rapid rise in health care expenses has resulted in an increased interest in the cost of treatments from a cost-effectiveness point of view for management purposes and in a reimbursement setting. The economics of radiotherapy within the global context of health care, and more specifically of cancer therapy, are discussed in this review. Furthermore, the calculation of radiotherapy costs from an institutional perspective using activity-based costing and on capacity planning in radiotherapy - at the departmental as well as at the national level - by integrating cost, epidemiological and scientifico-technological data are focused on.

Estimating the benefit and cost of radiotherapy for lung cancer

Purpose: To estimate the benefit and cost of using radiotherapy (RT) in the initial management of lung cancer in the general population.

Methods: We identified indications for RT in the initial management of small cell and non–small cell lung cancer through a review of the literature. The proportion of patients with each specific indication for treatment was determined using epidemiological observations from cancer registry data and from the literature. We estimated the benefit gained from RT use for each indication in the model using values published in the literature. We estimated the cost of RT for each indication using published Canadian data. The total benefit and cost was calculated for all indications combined. Results are reported in 2001 Canadian dollars.

Results: The mean benefit was 7 months of survival for each lung cancer patient treated with curative intent and 3 months of symptom control for each patient treated with palliative intent. The average cost was $9,881 per life year gained and $13,938 per year of symptom control gained. Sensitivity analysis revealed values between $7,905 and $19,762 per year of survival gain and between $10,368 and $27,875 per year of symptom control gained.

Conclusions: Using RT in the initial management of lung cancer can provide considerable gains in survival and symptom control. The cost of RT for the initial management of lung cancer is inexpensive compared with a common cut off of $50,000 per life year gained.

Activity-based costing: a practical model for cost calculation in radiotherapy

PURPOSE

The activity-based costing method was used to compute radiotherapy costs. This report describes the model developed, the calculated costs, and possible applications for the Leuven radiotherapy department.

METHODS AND MATERIALS

Activity-based costing is an advanced cost calculation technique that allocates resource costs to products based on activity consumption. In the Leuven model, a complex allocation principle with a large diversity of cost drivers was avoided by introducing an extra allocation step between activity groups and activities. A straightforward principle of time consumption, weighed by some factors of treatment complexity, was used. The model was developed in an iterative way, progressively defining the constituting components (costs, activities, products, and cost drivers).

RESULTS

Radiotherapy costs are predominantly determined by personnel and equipment cost. Treatment-related activities consume the greatest proportion of the resource costs, with treatment delivery the most important component. This translates into products that have a prolonged total or daily treatment time being the most costly. The model was also used to illustrate the impact of changes in resource costs and in practice patterns.

CONCLUSION

The presented activity-based costing model is a practical tool to evaluate the actual cost structure of a radiotherapy department and to evaluate possible resource or practice changes.

Prophylactic cranial irradiation revisited: cost-effectiveness and quality of life in small-cell lung cancer

PURPOSE

To investigate the therapeutic usefulness and cost-effectiveness of prophylactic cranial irradiation (PCI) in patients with limited-stage small-cell lung cancer (SCLC) who had achieved a complete remission.

METHODS

A retrospective chart review was undertaken of all patients diagnosed in Saskatchewan with SCLC between 1987 and 1998 inclusive. Patients who achieved a complete remission were divided into two groups, depending on whether they underwent PCI (PCI+ and PCI-, respectively). The quality-of-life-adjusted survival was estimated by the Q-TWiST method (quality time without symptoms and toxicity). The mean incremental costs per month of incremental OS were calculated in a cost-effectiveness analysis.

RESULTS

Among the 98 complete remission patients, the median OS for PCI+ and PCI- patients was 20.0 and 19.0 months, respectively (p > 0.05, nonsignificant). The median disease-free survival was 14.7 and 10.0 months, respectively (p < 0.05). The difference in the mean Q-TWiST survival was significant (p < 0.01). The mean marginal cost was $18,834/PCI+ patient and $17,885/PCI- patient (p > 0.05, nonsignificant). The cost-effectiveness ratio was $70/mo of incremental OS if u(tox) and u(rel) (the utility coefficients to reflect the value of time in health states of toxicity and relapse) were assumed to be 1.0.

CONCLUSION

PCI is a cost-effective treatment that improves the quality-of-life-adjusted survival for patients with a complete remission of SCLC.

A comparison of two methods for estimating the technical costs of external beam radiation therapy

PURPOSE

To accurately assess the cost-effectiveness of treatment with external beam radiation, it is necessary to have accurate estimates of its cost. One of the most common methods for estimating technical costs has been to convert Medicare charges into costs using Medicare Cost-to-Charge Ratios (CCR). More recently, health care organizations have begun to invest in sophisticated cost-accounting systems (CAS) that are capable of providing procedure-specific cost estimates. The purpose of this study was to examine whether these competing approaches result in similar cost estimates for four typical courses of external beam radiation therapy (EBRT).

METHODS AND MATERIALS

Technical costs were estimated for the following treatment courses: 1) a palliative "simple" course of 10 fractions using a single field without blocks; 2) a palliative "complex" course of 10 fractions using two opposed fields with custom blocks; 3) a curative course of 30 fractions for breast cancer using tangent fields followed by an electron beam boost; and 4) a curative course of 35 fractions for prostate cancer using CT-planning and a 4-field technique. Costs were estimated using the CCR approach by multiplying the number of units of each procedure billed by its Medicare charge and CCR and then summing these costs. Procedure-specific cost estimates were obtained from a cost-accounting system, and overall costs were then estimated for the CAS approach by multiplying the number of units billed by the appropriate unit cost estimate and then summing these costs. All costs were estimated using data from 1997. The analysis was also repeated using data from another academic institution to estimate their costs using the CCR and CAS methods, as well as the appropriate relative value units (RVUs) and conversion factor from the 1997 Medicare Fee Schedule to estimate Medicare reimbursement for the four treatment courses.

RESULTS

The estimated technical costs for the CCR vs. CAS approaches for the four treatment courses were as follows: palliative "simple" $1,285 vs. $1,195; palliative "complex" $2,345 vs. $1,769; curative breast $6,757 vs. $4,850; and curative prostate $9,453 vs. $7,498. Accordingly, the CCR estimates were 8%, 33%, 39%, and 26% higher than the CAS cost estimates, respectively. The primary cause of the difference between the estimates was the daily cost of delivering a "complex" treatment. In fact, if corrected the difference between the estimates fell to 0%, 1%, 4%, and 0%, respectively. Similar results were observed for both methods when the analysis was repeated using data from another academic institution. Medicare reimbursement was also slightly lower than, but remarkably close to, the costs estimated by the CAS approach.

CONCLUSIONS

For "complex" treatment courses, which represent the vast majority of external beam treatments, technical costs estimated using the CCR approach appear to be significantly higher than those estimated using procedure-specific cost estimates. Because cost-effectiveness analyses of radiation therapy tend to be sensitive to the cost of treatment, the use of higher costs will result in radiation therapy appearing less cost-effective.

The cost of radiotherapy as a function of facility size and hours of operation

Against a background of constant or decreasing budgets, this study was undertaken to investigate the economic effects of changes in selected operational parameters within a radiation treatment programme. Using financial data from the Northeastern Ontario Regional Cancer Centre and a recognized staffing model, a commercial spreadsheet has been used to calculate the cost of an 18 fraction course of radiotherapy, including all the major preparatory processes such as simulation and treatment planning. Using the spreadsheet, and on the basis of explicit and reasonable assumptions, the cost of radiotherapy has been calculated as the facility size (i.e. equipment complement) and hours of operation are varied. Based on the assumptions used, the cost of radiotherapy in a facility treating less than about 1600 patients per year starts to rise. At 400 patients per year, a course costs approximately 50% more than at 1600 patients per annum. Extended hours of operation do not appear to generate significant, if any, savings when realistic assumptions about machine lifetime and overtime payments are made. Using a spreadsheet to simulate changes in a radiation treatment programme can be an important decision-making tool, as the effects of changes in operating parameters can be demonstrated.

Economic evaluation of breast cancer screening: A review

PURPOSE

The authors provide a review of the economic evaluation literature of breast cancer screening and identify important trends and gaps in the literature.

OVERVIEW

Healthcare resources are limited and economic evaluation plays a critical role in resource allocation, healthcare policy, and clinical decisions. Many economic evaluations of medical practice, however, are unreliable and do not use appropriate analytic techniques. Three important trends were observed. First, two economic evaluation methods are dominant. Second, a wide range of cost estimates exists across studies. Third, a lack of standardization exists across studies with regard to basic economic evaluation principles. These findings should be considered when conducting future research, analyzing economic evaluations of breast cancer screening, and developing clinical guidelines.

CLINICAL IMPLICATIONS

Concerns about cost containment in healthcare make it necessary for physicians and clinical administrators to take an active role in resource allocation decisions at the clinical level. For instance, the recent debate on the proper age to begin annual mammography screening involves both resource allocation and clinical issues. Thus, it is important for physicians and clinical administrators to be familiar with the economic evaluation literature of breast cancer screening, economic evaluation methodology, and the associated shortcomings of published estimates.

The economics of cancer care

Considerable attention has been paid to the high cost of cancer care. These medical services are expensive, accounting for 10% of total health care expenditures. Factors contributing to high costs include (1) the likelihood that anticancer treatments will lead to costly medical complications: (2) intensive research and development necessary to ensure rapid introduction of a broad array of treatment options; and (3) specialized facilities required for delivery of care. Such efforts as rationing of care and utilizing practice guidelines have been ineffective in controlling costs. To realize savings, we must develop new therapies with sufficient specificity so that anticancer interventions do not impair the patient's general health.

Variations in the management and outcome of non-small cell lung cancer in Ontario

Prospectively gathered information in the Ontario Cancer Foundation's computerized clinical database was analysed to provide a description of the management of 12,399 patients with unresected non-small cell lung cancer (NSCLC) registered at seven regional cancer centres in Ontario between 1982 and 1991. Overall, 44% received initial thoracic radiotherapy, 19% received initial radiotherapy to metastatic sites, and 36% received no immediate radiotherapy. Of those who received thoracic radiation 41% received doses > or = 40 Gy and 59% received doses < 40 Gy. Among the seven centres, the proportion of patients receiving initial thoracic radiotherapy ranged from 41% to 56% (p < 0.001), and the proportion of those receiving doses > or = 40 Gy ranged from 30% to 68% (p < 0.001). Between 1982 and 1991, the overall proportion of patients who received initial thoracic radiotherapy decreased from 48% to 38%, the proportion of those receiving high dose treatment decreased from 55% to 28%, and the mean number of fractions given to the chest decreased from 17 to 10. Only 10% received chemotherapy at any time, and that proportion ranged from 3% to 21% (p < 0.001) among the seven centres. Between 1982 and 1991 the proportion of patients receiving chemotherapy decreased significantly from 15% to 8% (p < 0.001) across the Cancer Foundation as a whole. These wide variations in management policies were not associated with any significant differences in survival, which was similar at all seven centres, and remained constant between 1982 and 1991.

Quality assurance procedures in radiotherapy. Economic criteria to support decision making

This paper details the costs of two types of quality assurance activities in radiotherapy: in vivo dosimetry, intended to check the delivered dose, and portal imaging to check the treated volume. For both activities, either on-line or off-line techniques may be used. Describing the costs allows the calculation of which techniques are most cost-efficient for different radiotherapy departments.

Treating acute leukaemias--a venture into economic uncertainty? A method for estimating the cost of treating patients with acute myelocytic leukaemia

The objective of this paper is to report a method for estimating the cost of treating acute myelocytic leukaemia (AML). It is based on individual data from 54 patients treated with aggressive induction courses of chemotherapy. The study records the cost of the entire survival period for 40 patients and of at least 16 months' survival for the remaining 14 patients. All treatment activities were registered from the patient records and the price of each activity was estimated. As far as possible the principle of opportunity cost was used. The median survival time was 50 weeks and the average cost per patient was c. 300,000 SEK (= c. USD 50,000) in 1988 prices. A young man who achieved three remissions and lived for five years had the highest cost, c. 1 million SEK (= USD 155,000). The costs for AML treatment was higher in the 1980s than in the 1970s but led to longer survival for patients who survived the initial period.