HEALTHCARE SYSTEMS AND CANCER TREATMENT DECISION-MAKING
How do healthcare systems make decisions about new treatments? Suppose a new treatment costs £30,000 and improves survival by 6 months, from 12 to 18 months. What is the real cost of providing this treatment?
- £30,000 minus the treatment it replaces
- £30,000 minus the treatment it replaces and minus any consequent savings in other supportive care
There is no correct answer – it depends on who is paying for what. Answer 1 is the cost to the patient if the treatment is not reimbursed by the healthcare system. This is sometimes the case in the UK where the NHS sets limits on which drugs it will buy. The old standard of care will be covered but not the new drug. Increasingly, it is also a problem for patients in insurance-based systems where the extra drug falls outside the reimbursement package covered by the insurance. Answer 2 is the price to a hospital providing specialist care where the hospital budget per patient is fixed (as happens in hospitals in the NHS and some managed-care systems in the USA). Answer 3 is the price to the organization funding the totality of the patient’s care: this may be the state via structures like the NHS or an insurance company. This then raises the further question of what exactly is included in the associated costs. For example, terminal care costs will probably be similar whenever a patient dies. However, if the survival time is longer, as in the example, they may then fall in a different financial year to the drug costs – how long must costs be deferred to count as savings? This is particularly the case with treatments which increase the cure rate, for which such costs may be postponed for many years. Again, there is no single simple answer to such questions – different healthcare systems tend to resolve these dilemmas in different ways. It is worth examining the sort of methodologies used by public health specialists and insurance companies in making these decisions on whether to fund a particular treatment.
A frequently used method is to estimate the cost per year of extra life generated by the new treatment. A correction for the overall quality of that life is often also applied. The aim is to produce a measure known as a quality-adjusted life year (QALY). For example, a treatment that prolonged your life by a year but at a 50% reduction in quality would be costed as 0.5 QALY. This sounds very neat, and it allows purchasers of healthcare to compare a drug therapy that prolongs life by 3 months with a hip replacement which improves quality of life with no effect on life expectancy. For well-established treatments such as surgery and radiotherapy, patients are frequently cured, and thus this cost is spread over a large number of life years gained. Thus, although major surgery is expensive, it has a very low cost per QALY in most cases. In contrast, new drugs that prolong survival by relatively modest amounts in end-stage disease often have a very high cost/QALY.