Health care providers and financing organizations have become more aware of the resource constraints on the provision of medical services, thus increasing the importance of economic evaluations within the health care industry.[1,2] This has carried over to the evaluation of new, therapeutic strategies for cancer, which have traditionally been evaluated exclusively for safety and clinical efficacy.
The National Cancer Institute (NCI) and the American Society for Clinical Oncology (ASCO) have recognized the growing need for economic information. To address this issue, they held a joint economic workshop in 1996.
The outcome of the workshop was the development of a workbook outlining procedures and guidelines for performing economic evaluations alongside cancer clinical trials.
As a result of these efforts, guidelines and procedures are currently being developed and applied to appropriately evaluate both the economic and clinical impact of new cancer therapies in NCI-sponsored clinical trials.
Within a clinical trial, economic evaluations address the same issues as clinical investigations, but approach them from a different perspective. While the clinical protocol may be concerned with the results of a magnetic resonance imaging (MRI) scan, for example, the economic protocol will be concerned with the number of MRI scans conducted during the study period.
Evaluation of resource utilization data often requires specific assessments that account for the longitudinal nature of economic data.
Costs that can be included in an economic evaluation of cancer care consist of direct medical, direct nonmedical, indirect, and intangible costs.[3]
Direct medical costs represent costs incurred in providing care, such as payment for a chemotherapy agent or for seeing an oncologist.
Direct nonmedical costs represent costs incurred because of illness or the need to seek medical care, and are generally paid out-of-pocket by patients and their families (eg, transportation or hotel stays required for medical treatment, or purchase of cosmetic apparel after disfiguring cancer treatment).
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Indirect costs represent costs not associated with transactions for goods or services, such as morbidity (eg, time lost from work) or mortality (eg, premature death leading to removal from the work force).
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Intangible costs represent the costs of pain, grief, and suffering.
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There are four types of analyses performed in clinical economics: cost-identification, cost-effectiveness, cost-utility, and cost-benefit.
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A cost-identification analysis simply assesses the costs involved in medical care without regard to clinical outcome. Typically, this type of analysis is conducted for procedures or therapies with equivalent clinical efficacy.
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A cost-effectiveness analysis compares both the costs and outcomes of an intervention, with effectiveness measured in any meaningful clinical unit, such as years of life saved or number of toxic side effects prevented.
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When a medical intervention can result in several outcomes, the outcomes can be assessed in terms of patient utility. Utility is a measure of the patient’s preferences for a particular health state or for the outcome of an intervention. A cost-utility analysis compares the costs and benefits of care with the benefits measured as patient utility.
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A cost-benefit analysis compares the cost of a medical intervention with its benefit by measuring costs and benefits in the same units (usually dollars), allowing for calculation of the ratio of dollars spent to dollars saved, or the net cost or net savings.
The necessity of associating monetary values with medical outcomes, such as the cost of a year of life lost or gained, makes a cost-benefit analysis a difficult measure to use for health care evaluation.
Economic analyses may incorporate the concept of perspective in assessment of costs. Costs can be considered from the perspective of the patient (eg, lost work time, travel costs, and copayments); the employer (eg, lost employee productivity, increased insurance premiums); the insurance company (eg, payments for physician visits, hospital stays, clinical procedures, and pharmaceuticals); or society.
The societal perspective takes into account the overall costs of a treatment to society as a whole. By focusing on all costs stemming from the treatment choice, the societal perspective has the advantage of being able to determine true cost savings that accrue to one member of society as a result of employing a specific treatment.
For example, employing a treatment that shortens hospital stays may significantly reduce the costs faced by an insurer, while shifting the financial burden to patients and their caregivers. Use of the societal perspective allows health care decision-makers to explicitly consider these tradeoffs.
Prospective Data Collection
Kevin A. Schulman, MD, MBA, and William L. Boyko, Jr., PharmD
In prospective analyses of the costs of care in clinical trials, the development of economic data as endpoints in the trial begins at the same time the clinical trial is being designed.[4] The initial step is to construct a study design to establish economic endpoints and data collection methods. This involves collaboration with the clinical study investigators and protocol approval from trial sponsors and individual Institutional Review Boards.
Economic case report forms need to be merged with the clinical case report forms. Special consideration must be given to the amount of data requested within the protocol for clinical and economic data, as the workload of the data collection staff is always a concern in these studies.
Final steps involve the generation of a database appropriate for the study, analysis of the data, and dissemination of the study results.
Estimating Costs
Data for the economic arm of the study should be collected during initial inpatient hospitalizations as well as during the follow-up period. In addition to chart review as a data collection means, regular telephone interviews can be conducted to obtain data associated with specific categories of postdischarge resource consumption.
For the hospitalization phase of an economic analysis, costs can be estimated from patient charges on hospital bills. A hospitalwide cost-to-charge ratio can be obtained from the Medicare cost report data, and this information can be used to estimate costs based on patient charges. Data regarding physician visits can be collected and assigned CPT-4 codes, which are then assigned costs using the Medicare fee schedule.[5,6]
For the posthospitalization phase of an economic analysis, costs can be estimated using a variety of methods. Rehospitalization costs can be estimated with the same methods used for initial hospitalization.
Costs for chemotherapy should consider both the cost of the drug as well as physician time. Drug cost can be estimated using pharmaceutical wholesale prices, while physician time can be valued using the Medicare physician fee schedule for chemotherapy administration.[5,7]
Costs of radiation therapy can be estimated based on standard regimens using the Medicare fee schedule and should include both initial cost components and costs associated with weekly radiation therapy team visits.
Costs of transfusions (packed red blood cells, white cells, platelet standard units, platelet apheresed units, fresh frozen plasma, and whole blood) can be estimated based on proprietary cost data from individual hospitals.
Provider costs can be separated into three categories: physicians, nurses, and home health. Physician visit costs can be estimated using the Medicare physician fee schedule. Costs associated with both nurses and home care visits can be estimated by multiplying the length of the visit by the hourly cost for each nurse or service, respectively.[8,9]
Outpatient surgeries and procedures can be estimated by assigning each procedure a CPT-4 code and assigning a relevant cost based upon the Medicare fee schedule.
