September 8, 2008
Considering Cost in Cancer Care Decisions
By Dan Harvey
Vol. 9 No. 18 P. 14
As healthcare costs grow, physicians need to fully understand the costs and benefits of the care they provide, including imaging and radiation therapy. An interesting article in a prominent cancer journal addresses the topic.
The cost of oncology treatments and procedures have escalated along with their technological innovation. Given the costs, oncology physicians should fully understand the economic impact of new and expensive interventions. That’s the message in a recent report from the American Cancer Society (ACS).
Such thorough comprehension is best accomplished via methodical economic evaluation that compares costs and outcomes between the new and the more traditional interventions, according to the report’s authors, Michael T. Halpern, MD, PhD, and Ya-Chen Tina Shih, PhD. “Economic Evaluations of Medical Care Interventions for Cancer Patients: How, Why, and What Does it Mean?” represents four months of research and data interpretation and was published in the July/August issue of CA: A Cancer Journal for Clinicians.
The authors’ basic premise is by no means revolutionary. As Halpern and Shih indicate, economic evaluation—specifically one that considers relative costs vs. benefits of new and expensive interventions—has been deployed in various medical areas for more than 20 years. However, only recently have the concepts been applied to oncology. One major cause for the delay is a cost-be-damned viewpoint: As cancer has devastating physical and emotional consequences, many in the cancer care community feel that anything that potentially increases patient survival and enhances quality of life is fully justified, no matter how steep the financial price.
It’s difficult to argue against that reasoning, but Halpern and Shih report that economic considerations need to be factored into the clinical equation. Healthcare budget constraints make it necessary for oncology clinicians to apprise themselves of cost-vs.-benefit considerations related to recent advancements in diagnosis and treatment.
“We’ve seen an increasing interest in the oncology field about these considerations due to development of more expensive interventions,” says Halpern, a senior health scientist with RTI International, a North Carolina-headquartered, independent organization focused on health services and social policy research. “While there have been some very good sources for understanding cost-effectiveness in general, we felt there wasn’t anything specifically directed toward practicing oncologists that provided necessary information within the right context.”
Economic Call to Arms
In response, Halpern worked with Shih, an associate professor in the health services research section of the biostatistics department at the University of Texas M. D. Anderson Cancer Center, to develop a review that would essentially provide a primer that addressed methods relating to costs. To underscore their points, the authors highlighted the high price of new chemotherapeutic treatments, as well as new imaging and radiation therapy techniques. In particular, they point out the following:
• MRI screening for breast cancer costs runs as high as $1,000 per image, or 10 times the cost of screening mammography.
• The price for a PET scan for cancer staging runs as high as $1,800.
• The costs of intensity-modulated radiation therapy (IMRT) to treat prostate cancer equals $48,000 per patient each year.
Commenting on the paper’s message, David C. Beyer, MD, vice president of Arizona Oncology Services Inc, says it poses a challenge to the oncology community. “It addresses issues that, in my opinion, demand a great deal more attention,” says Beyer, who is also a member of the board of directors for the American Society of Therapeutic Radiology and Oncology and the board of chancellors for the American College of Radiation Oncology.
At the same time, Beyer understands why the message has been a long time coming. “The subject can be simply uninteresting or overwhelming for people who are more focused on patient care than costs and health policy, even though many new therapies and techniques have been introduced without the benefit of rigorous cost-benefit analysis,” he says.
As such, the paper provides solid informational background for clinicians not involved in health policy on a daily basis. “For the benefit of the medical community and patients’ best interests, as well as the greater society, I think we need to pay greater attention to economics,” says Beyer.
Chaitanya Divgi, MD, a professor of radiology and the head of the nuclear medicine and clinical molecular imaging section at the Hospital of the University of Pennsylvania, concurs with Beyer’s assessment. But he points out that the publication provides only a review, as it delineates various metrics employed to gauge cancer care economics. Still, he recognizes the paper’s value. “It is a cautionary review designed to increase clinicians’ awareness in two substantial ways: first, how economics plays an increasing role in healthcare decision making and, second, why clinicians making the decisions need to be aware of non-economic parameters such as quality of life that can help determine the economic decisions.”
Why Physicians Should Care
One of Halpern and Shih’s aims was to indicate why oncology clinicians should care about cost and cost-effectiveness, especially as it relates to clinical practice. Their answer includes more than one salient point. For one, they note how most insurance plans increasingly require patients to foot the bill for a significant portion of the medical care they receive. “That portion comes directly out of pocket,” Halpern says.
Individuals without insurance or with only minimal coverage face even higher personal costs. Many patients falling within these parameters can’t afford the optimal treatments their physicians recommend.
“Even when cancer patients have insurance, they may pay tens or even hundreds of thousands of dollars for treatment,” says Halpern. “So we felt it was important for physicians to understand the costs and benefits of different treatment options and pass that knowledge on to their patients.”
Halpern and Shih also believe physicians need to care about the issue because expenditures should be prioritized to determine the most reasonable use of limited healthcare funds, as resources are scarce. On a societal level, they wrote, “There will never be sufficient revenues available to fund all services desired by all members of society. While at some level there may be a desire to provide all possible care for all patients, regardless of whether such care is associated with high costs and little chance of clinical benefit, it is necessary to prioritize expenditures to decide what is the most reasonable use of limited healthcare funds.”
Also, they believe physicians should care about the topic because, with insufficient resources to satisfy everyone, recommended medical treatments must represent reasonable uses of available resources, given the value society puts on the associated outcomes.
Economic Analyses to Implement
The report reviews health economic analysis methods developed to help clinicians evaluate their plans for treating patients. The authors’ review covers basic evaluation components that include the following:
• Study perspective and comparators: A well-designed health economic evaluation must clearly state the study perspective and the competing interventions to be explored, the authors explain.
• Direct and indirect costs: Direct costs quantify the medical (and nonmedical) resources used in direct relation to the medical interventions. Indirect costs relate to less tangible elements such as productivity loss and quantify the time consumed or saved by patients and their caregivers as a result of the interventions.
• Time: Time effects are integrated into the evaluation by discounting and inflation. “For studies evaluating costs of a period longer than one year, such as those that follow patients from treatment initiation to death, future costs and outcomes must be ‘discounted,’” the authors wrote, adding that time also factors into economic evaluation for inflation adjustment when calculating the cost of care.
Further, they outline six types of economic evaluations, including the following:
• Cost analysis: This deals only with the cost component of competing interventions, regardless of potential differences in clinical outcomes.
• Cost-minimization analysis: This economic evaluation method helps calculate the least expensive alternative when all considered interventions have equivalent clinical outcomes.
• Cost-benefit analysis: Doing a cost-benefit analysis quantifies both costs and outcomes of competing healthcare interventions in monetary units.
• Cost-effectiveness analysis (CEA): Unlike a cost-benefit analysis, this metric expresses consequences (such as effectiveness, benefits, and outcomes) in a nonmonetary evaluation appropriate for describing an intervention’s desired objectives. These can include survival, progression-free survival, and the rate of complete response or number of adverse events avoided during cancer therapy.
• Cost-utility analysis (CUA): An extension of a CEA, a CUA uses an effectiveness measure (quality-adjusted life year) to address CEA limitations.
• Budget-impact analysis (BIA): Analysts use a BIA to address the issue of affordability, a critical and practical concern for health policy makers, who may not always align with policy recommendations based on CEA or CUA, according to Halpern and Shih. As they indicate, “a growing number of payers, especially those under national health insurance systems, have started requesting BIA in addition to a CEA/CUA to assist decision makers in determining whether the coverage of a new technology recommended by a CEA/CUA might ‘break the bank’ [i.e., exceed available funds], even if the new interventions under consideration are cost-effective. If a new intervention was found to be cost-effective but resulted in a substantial financial burden, payers may elect to decline coverage as the intervention would be unaffordable.”
Cancer Care Community Reaction
Halpern and Shih’s report primarily employs examples related to chemotherapeutic treatments. So can one be forgiven for asking whether it is directly applicable to imaging and radiation therapy?
“Yes,” says Halpern. “Everything addressed in the paper, though most of it applies to biochemical treatments, can apply to imaging. New procedures are always being developed as complements or alternatives to existing procedures. It is important for radiologists and other clinicians to understand and discuss potential benefits associated with more expensive techniques and technology.”
While his response to the paper is generally positive, Beyer has one caveat: To borrow some corporate phraseology, he feels the authors are flying at 30,000 feet, while practicing oncology physicians are working down in the weeds at ground level. “The paper deals with issues on a macroeconomic level,” says Beyer. “It deals with elements that don’t really weigh in at a single medical practice. For those of us working in the trenches and practicing on a daily basis, I’m not so sure that it really changes anything.”
From his own perspective, Beyer has already been fully cognizant of the issues the paper addresses. As he relates, his practice includes a network of radiation oncology facilities. “I’m frequently involved in patient care, and when a patient has a choice between ‘treatment A’ and ‘treatment B’, the best I can do is tell them that ‘A’ might be a bit more expensive than ‘B’ but that ‘B’ could involve more complications. Based on those circumstances, we try and guide a patient toward the best individual decision. The paper takes in a much larger perspective, as it looks at decision trade-offs from a macroeconomic perspective.”
Bayer adds, “I am past president of the American Brachytherapy Society and have been interested in prostate seeds. Clinicians performing the procedure have long recognized that the treatment is far more cost-effective than alternative therapies such as radical surgery and external radiation IMRT. As such, we promote the brachytherapy alternative, and we have always done that as a matter of course—an informal, impromptu analysis.”
But he credits the paper and authors for advancing the larger cost-effective analysis, one that doesn’t simply say one treatment is less expensive than the other. “When addressing economics, the paper talks more than just about direct cost to individual patients,” says Beyer. “It involves intangibles such as lost wages and other things that we don’t think a lot about as we treat patients on the day-to-day basis. And, from where I sit, I am not unhappy to see these kinds of analyses.”
In his reaction, Divgi expresses a caveat echoed by others in the imaging community, but within that complaint is a strong positive. “There is very little in the paper that directly addresses medical imaging of cancer,” he says. “But it does talk about different forms of care that relate to clinicians involved in imaging—for instance, how to address different chemotherapeutic options and their economic implications when they have more or less the same outcome. That mirrors issues critical to imaging clinicians. As imaging-related healthcare costs escalate, it is important to develop paradigms and algorithms that best address how to choose the most appropriate modality while making sure costs don’t go through the roof.”
Moreover, he says that even though the authors’ review takes in a very broad picture, the work is important insofar as the imaging community hasn’t undergone the same kind of surveillance that is depicted. “From an economic perspective, surveillance hasn’t been as extensive as seen in the therapeutic community,” says Divgi.
But he suggests the approach is emerging in the imaging sector, and that is an important development. “The macroeconomic perspective is something we should heed. As imaging moves forward, this is the kind of economic analysis that we will have to apply.”
— Dan Harvey is a freelance writer based in Wilmington, Del., and a frequent contributor to Radiology Today.