Benefi ts and Costs of Policies
SECTION 5
to Reduce Cancer Health Disparities
he assessment of the economic burden of cancer provides a monetary
value of the benefi ts of reducing cancer disparity but this does not provide Tinformation required to assess the cost and benefi ts of various approaches to reduce or eliminate cancer disparities. In this section, an in-depth discussion is provided on the importance of and approaches to assessing the cost-effectiveness of interventions to reduce cancer health disparities.
32 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings
5 .1 Why Economics Matters
Resources available for delivering health care and other services are fi nite. Economic assessments are essential to identifying the burden of cancer (as discussed in sections 3 and 4). In addition, economic evaluations play a key role in determining selection of interventions and policy changes to improve cancer care and reduce cancer health disparities. Specifi cally, economic studies guide two important decisions:
■ Effi cient allocation of resources: Economic analysis allows the comparison of interventions to identify the ones that are the most cost-effective—that is, the interventions that provide the highest level of benefi ts for the resources expended; and,
■ Resource planning: Economic analysis provides information to assess the costs required in various budget periods—critical for the implementation of selected cost-effective interventions.
Cost versus effectiveness comparisons are performed to identify effi cient interventions, and budget impact analyses are performed to facilitate and inform resource planning. These are discussed in detail below.
Comparing Cost and Effectiveness
The alternative scenarios used when comparing two interventions are provided in Figure 8. If the new intervention both saves costs and improves outcomes, it is favored; this principle is called dominance (SE quadrant). If the new alternative is more costly but yields better outcomes (NE quadrant), then additional assessment is required. And the new intervention is only cost-effective if the additional effectiveness justifi es its additional cost.
There are three approaches to simultaneously considering the cost and effectiveness of an intervention: cost-effectiveness analysis, cost-benefi t analysis, and cost-utility analysis. In each of these three approaches, a ratio of the cost divided by the effectiveness units is generated and therefore results are presented as a cost per unit of effectiveness (see Table 5).
FIGURE 8 Cost Effectiveness Plane
New intervention more costly
NW
NE
Existing intervention
New intervention more
dominates
effective, but more costly
New intervention
New intervention
less effective
more effective
New intervention less
New intervention
costly, but less effective
dominates
SW
SE
New intervention less costly
SOURCE: Ramsey, 2004.87
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 33
■ Cost-effectiveness analysis (CEA): Consequences or effects of the intervention are expressed in natural units, such as years of life saved, lives saved, cases detected, cases successfully treated, or some other improvement that is due to the cancer care-related intervention.
■ Cost-benefi t analysis (CBA): Both costs and benefi ts are expressed in monetary terms of net savings or a benefi t-cost ratio. A positive net savings or a benefi t-cost ratio greater than 1 indicates that the intervention saves money.
■ Cost-utility analysis (CUA): Consequences are expressed as the utility or quality of the health outcome. CUA results are generally expressed as cost per QALY gained, recognizing that all life years are not equivalent and taking into account morbidity and HRQL impacts.
The majority of the studies assessing cancer care interventions are based on CUA where the cost per QALY is presented. Due to the chronic nature of the disease process and the substantial impact on HRQL
of the patients, cancer assessments are appropriately focused on years of life adjusted for quality. CUA is overall the most appropriate method for assessing cost-effectiveness of cancer interventions. CEA is sometimes performed instead of CUA because of a lack of information on HRQL impacts. Survival time or mortality rate can be used as the effectiveness measure to calculate the cost-effectiveness ratio.
The Think Tank panel recommendation was to use mortality, since this is a more reliable statistic than survival time. CBAs are rarely performed due to the challenge of quantifying both costs and benefi ts in monetary terms.
Budget Impact Analysis
Critics of the cost-effectiveness approach argue that CEA studies neglect the budget impact of the services or interventions under study, and therefore do not provide adequate information for implementing the interventions.88,89 The budget impact analysis involves the estimation of the cost of providing the selected intervention or health care service to the eligible population. For cancer screening services, the budget impact analysis will include the cost of screening tests, follow-up diagnostic tests, and treatments that will be required. The cost estimate can be projected for each budget period to facilitate decision making and allocation of resources.
5 .2 Importance of Perspective in Economic Assessment
CEA can be undertaken from a number of different perspectives. The broadest and most comprehensive is the societal perspective, since it encompasses all costs and outcomes impacts. In the societal perspective all costs incurred, including indirect, direct and tangible costs, are included. Analyses performed from the payer perspective or the provider perspective considers a narrower range of costs and effectiveness measures. The fi ndings can differ based on the perspective selected, and therefore is an important methodological decision. The consensus is that all assessments should incorporate the societal perspective. The Panel on Cost-Effectiveness in Health and Medicine, a non-federal panel of experts convened by the U.S.
Public Health Service (PHS), also endorsed this approach.90 If other perspectives need to be considered, these should be used in addition to the societal perspective.
TABLE 5
Comparison of CEA, CBA, and CUA
Approach
Cost Measure
Effectiveness Measure
Ratio
CEA
Dollar
Natural units
Cost per unit life year
(Life years gained)
gained
CBA
Dollar
Dollar
Cost per $1 of benefi t
CUA
Dollar
QALY
Cost per QALY
SOURCE: Gold, et al., 1996 . 23
34 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 5 .3 Calculating Incremental Cost-Effectiveness Ratio
The incremental cost-effectiveness ratio is required to evaluate the cost and benefi ts of the proposed intervention against the “gold standard”. Cost-effectiveness comparisons are most useful when the comparator being considered is the standard care, since this allows the decision maker to consider whether an innova-tion is better than the status quo. If there is no intervention in place, the comparator can be “no intervention.” When comparing two interventions—for instance, programs A and B where program A is more effective but also more costly—this ratio is simply the change in cost divided by the change in effectiveness of program A and B:
Cost Intervention A – Cost Intervention B
_________________________________
Effectiveness – Effectiveness
Intervention A Intervention B
The resulting value is the cost to obtain each unit of increased effectiveness associated with program A.
This incremental cost-effectiveness ratio for program A needs to be compared with the threshold for cost-effectiveness ratios to consider recommending its use. When effectiveness is measured in terms of QALYs, a commonly used threshold for the cost-effectiveness of medical therapies is $50,000 per QALY. A cost-effectiveness ratio above $50,000/QALY is usually considered not to be cost-effective while one below $50,000/QALY is generally accepted to be cost-effective. Rankings can also be made comparing cost-effectiveness ratios of the intervention under study to other health care services, using League tables.91
5 .4 Characteristics of Potentially Cost-Effective Interventions Not all interventions to reduce cancer health disparities will be cost-effective. Interventions that meet one or more of the following criteria are those most likely to be cost-effective:
■ High degree of disparity in targeted group. When there is a substantial disparity that needs to be overcome in the intervention population there is a lower chance of diminishing returns (an increase in cost required to obtain the same level of effectiveness);
■ Highly effective intervention. Such an intervention could be cost-effective even at a high cost; and,
■ Low cost of intervention. A low-cost intervention would potentially be cost-effective even if it was not highly effective, since the cost per unit will be low.
The key driver overall is the disparity that exists in the underlying population—that is, the extent of the benefi ts to be realized. If there are signifi cant benefi ts to be gained from an intervention then even an intervention that is costly can prove to be cost-effective. For example, if minority group X has a mortality rate of 30% while the norm is 5%, then even a costly program can be cost-effective because of the potentially large incremental effectiveness if the mortality for the minority population can be improved to the norm (30%-5%=25% reduction). On the other hand, a mortality rate of 8% for the minority group would only result in a small incremental benefi t (8%–5%= 3% reduction) which may not justify the use of an expensive program. In this later case, the intervention will have to be highly effective and inexpensive to be cost-effective.
5 .5 Provider Incentives and Barriers to Change
The cost-effectiveness of a given intervention needs to be considered in the context of the budget impact to the payer. Short-term cost impacts versus long-term benefi ts can hinder coverage for preventive and screening services, since many insurers only insure patients for a short period of time. Under this scenario, costs are immediate and measurable while the savings are long-term and hard to measure.92 Therefore, payers may be unwilling to cover high-cost preventive services whose benefi ts may not be realized by the insurer. Insurers are often reluctant to pay for screening for diseases that are not likely to present until someone else covers the patient. As an illustration, HMOs may be reluctant to pay for colonoscopy screening for people aged 50 to 55 because these individuals are more likely to get colon cancer after age 65, when they will be covered by Medicare.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 35
Recommendations
SECTION 6
and Research Agenda
lthough health care disparities in cancer have been clearly documented, there is still a need to further understand the complex, multifaceted Anature of these disparities. The participants addressed the economic consequences of cancer health disparities and made numerous recommendations of cost-effective interventions for eliminating them. The recommendations are summarized below in two subsections—research and policy.
36 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings
6.1 Research Recommendations
The Think Tank participants recommended seven specifi c areas where additional research is needed in order to direct future initiatives aimed at eliminating disparities.
1. Focus on cancers with modifi able attributes and fund prospective clinical trials to evaluate primary prevention strategies. There was consensus that resources and effort should be focused on those cancers that are highly preventable and curable: lung cancer through primary prevention activities aimed at smoking prevention and cessation; cervical and colon cancer through both primary prevention and secondary prevention (screening); and breast cancer through secondary prevention only. Colon, breast, and lung cancer are also among the cancers with the highest economic burden. Targeted interventions to promote primary and secondary prevention of these priority cancers may help ensure that limited resources are expended on the most benefi cial activities. In addition, the interventions should be targeted at groups that have the highest need (e.g., high incidence of lung cancer, low screening rates for colon, breast, and cervical cancer), since these interventions are most likely to have a high impact in reducing cancer health disparities and prove to be cost-effective.
2. Study processes to develop improved data sources. Better data are required to analyze both outcomes and cost assessments. Databases that allow for comprehensive assessments of disparities in outcome and their cost impacts for younger (under 65 years) and older (over 65 years) patients are required.
Specifi cally, there are limited data on individuals younger than 65 years and an urgent need to develop better data sources for this population. In addition, the scope and timeliness of data collection within cancer registries and other sources should be enhanced, with particular attention to indicators of socioeconomic status (e.g., education level and income). This would allow future analyses of disparities to sort out more decisively the association of racial/ethnic variables and SES on observed differentials in the receipt of cancer care, health outcomes, and costs. A number of efforts are currently underway to improve the quality of cancer data available including the NCI-Department of Veterans Affairs Cancer Care Outcomes Research and Surveillance Consortium (CanCORS), NCI’s HMO
Cancer Research Network, NCI’s Prostate Cancer Outcomes Study (PCOS), and CDC’s Pattern of Care (PoC) studies. A joint, national-level effort—involving the NCI, CDC, Agency for Healthcare Research and Quality (AHRQ) and other major cancer organizations such as the American Cancer Society, the American College of Surgeons’ Commission on Cancer, and the American Society of Clinical Oncology—is necessary to build an enduring, ever-improving cancer data infrastructure.
3. Develop better methods and tools to measure disparities. Although studies have been performed to understand cancer health disparities, it is a complex fi eld with overlapping sets of determinants (such as race, sex, education, etc.) and this poses signifi cant challenges in developing an appropriate defi nition of disparity. Additional research is required to develop methods to assess the role of these overlapping determinants. Some promising initial work in this area has been sponsored by NCI.2
4. Assess geographic variation and other factors that result in disparities. Additional research, both qualitative and quantitative, should be conducted at the community and neighborhood levels to identify factors that lead to differences in cancer health disparities, and studies need to be initiated to analyze interventions that can reduce the disparities in a cost-effective manner. The availability of health care infrastructure to perform timely diagnosis and offer optimal cancer treatments at high-quality health care centers should be assessed. Currently available databases should be better utilized to assess these geographic variations and, in the future, the datasets to be developed under research recommendation #2, can be used to further enhance our understanding of these geographic factors.
5. Include cost-effectiveness assessments in clinical trials and other intervention studies that address disparities. The collection of economic data should be systematically included in clinical trials or any other type of studies when such data will contribute to answering meaningful research hypotheses that have policy relevance. There is currently a gap in our knowledge of whether resource use and costs vary Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 37
systematically across population groups. The collection of such information is critical to performing cost-effectiveness assessments that provide valid and reliable estimates. Efforts should be made to include SES so issues surrounding disparities can be studied.
6. Identify changes in the health care delivery system that can reduce the economic burden of cancer health disparities. Research is needed to identify which types of inequalities within the health care delivery system that, if corrected or eliminated, can have the most impact in reducing disparities. This research would assess which interventions—primary prevention, screening, treatment, or surveillance after curative treatment—may provide the most cost-effective approaches to eliminating cancer health disparities.
7. Initiate studies to quantify uncompensated cancer care. Reliable data and accurate methods to assess the economic costs of uncompensated care are lacking. Research should be undertaken to evaluate alternate methods and to develop data sources that can yield valid estimates. Capturing this information in a reliable manner would provide a more complete assessment of the burden of cancer and provide policy makers with information to guide funding decisions.
6.2 Policy Recommendations
Based on what is currently known about cancer disparities and their determinants, the Think Tank participants offered specifi c recommendations for developing policies at the federal, state, and community levels to eliminate cancer health disparities. We summarize these under fi ve broad categories: improving and expanding insurance coverage; ensuring adequate payment for cancer care; reducing geographic disparities through community-level initiatives; eliminating health care network disconnects; and promoting primary prevention.
1. Improve and expand current insurance coverage. The uninsured are at higher risk for being diagnosed with cancers at late stages and are less likely to obtain optimal treatments. Expansion of coverage and improvement in the quality of coverage are required especially for those with cancer or suspicious fi ndings suggesting cancer (such as the Breast and Cervical Cancer Prevention and Treatment Act of 2000). The specifi c recommendations related to expansion of insurance coverage are as follows:
■ Providing insurance coverage to the uninsured;
■ Studying the impact of out-of-pocket costs, especially for low-income individuals, on cancer related care;
■ Reforming public health programs to offer long-term coverage for low-income adults, including changing eligibility to be based on income rather than welfare categories. Medicaid enrollment tends to be sporadic and this discontinuity needs to be eliminated to improve access and timely diagnosis of cancers; and,
■ Modifi ng the Medicare waiting period for patients under 65 years with cancer to qualify for Medicare disability coverage while undergoing treatment (it is currently 12 months). CMS and NCI should initiate a demonstration project to assess approaches to decreasing the waiting period.
2. Sponsor health policy research to assess the impact of cancer payments on quality of care. The Think Tank participants discussed the importance of performing rigorous studies to understand whether current payment policies infl uence treatment patterns or the quality of cancer care received. In addition, studies are required to assess whether there are payment policy-related differences in process and outcome measures among population groups. Specifi c recommendations include:
■ Formulating collaborative study with NCI and CMS input to assess impact of payment policies on cancer health disparities; and
■ Sponsoring additional studies through grant funding (issue an RFA) to explore the impact of payment policies and cancer health disparities.
38 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 3. Reduce geographic differences through community-level interventions. There are substantial inequalities in both cancer incidence and mortality by geographic location. These disparities are best addressed through interventions at the community level as interventions can be tailored to match communities’
needs. Examples of interventions include:
■ Creating community-based participatory education, training, and research among underserved populations. These networks can help improve access and provide the cancer services required to eliminate the disparities;
■ Using lessons learnt from research recommendation #4, foster community-based interventions in locations the target audience frequents—for instance, at schools, churches, and other community gathering places (supermarkets, barber shops, salons);
■ Encouraging health policy research and researchers at the community level;
■ Conducting research to assess the effectiveness of using cancer survivors in the community to serve as advisors/navigators so that individuals receive information on cancer care services from someone they trust; and,
■ Developing initiatives to ensure that providers receive high-quality training and that offer incentives to promote the availability of minority health care providers in the community. Ensuring that providers understand the culture and speak the languages prevalent in the community is essential for providing optimal cancer care services. The standard of care can also be improved by ensuring that providers maintain evidence-based quality standards.
4. Eliminate health care network disconnects. For minority populations and disadvantaged community groups, system barriers in the form of fragmentation of care can lead to sustained disparities in cancer care services. Interventions to improve the connection between various entities in the health care delivery process (primary care physicians, specialists, surgeons, etc.) and adoption of measures to ensure that individuals receive the services required will greatly reduce cancer disparities. Several interventions can be adopted to eliminate health care network disconnects:
■ Introduce patient “navigators” to the community. These navigators will assist patients with cancer and their families through the services, programs, and resources in the community. The goal of the navigator is to ensure that patients receive timely and appropriate care. The patient navigator can assist patients and their families by arranging fi nancial support, securing transportation to health care providers and arranging child care, identifying and scheduling appointments with culturally-sensitive caregivers who can communicate with the patient, and coordinating care among providers. However, studies are needed to evaluate a number of issues related to the effectiveness, cost, and cost-effectiveness of navigation for specifi cally defi ned populations.
■ Foster formal arrangements between primary care or community health centers and high-quality hospitals. This will ensure that all cancer patients can be referred to appropriate health centers to receive services required. These can be achieved through targeted delivery system interventions: (a) Establishing PBRNs to encourage providers working together to do research in a community setting. These initiatives will lead to increased understanding of the potential health care disconnects and community-specifi c needs to improve the cancer care provided. Demonstration projects to test the impact of these networks on reducing cancer health disparities should be conducted.
Such a demonstration could, for instance, be conducted through the Primary Care (PBRNs) and Integrated Delivery System Research Networks (IDSRNs) funded by AHRQ. Assessments of these networks offer the opportunity to collect and analyze the impact of indirect costs to patients.
(b) Creating linkages between community cancer centers and high-quality medical centers to ensure that residents receive good follow-up care. Often, cancer patients from disadvantaged communities do not have access to quality cancer care. Establishing relationships with accredited cancer care centers may ensure the availability of high-quality services and may help recruit minorities to participate in clinical trials.
Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings 39
5. Promote primary prevention. Promote primary prevention for cancer sites where evidence exists supporting primary preventions. Primary prevention activities targeted at smoking, diet, exercise, hepatitis vaccine, and HPV vaccine can be highly effective in reducing overall cancer health disparities. To be successful, these interventions must:
■ Target communities where disparities exist;
■ Focus on cost-effective interventions such as smoking prevention and cessation; and
■ Impact both demand and supply level factors whenever possible. For example, foster a reduction in youth smoking with stronger school-based education programs (demand-side) and stricter enforce-ment of laws banning sales to minors (supply side).
A number of specifi c next steps were identifi ed for NCI to implement based on the list of research areas and recommendations. First, convene a panel of experts to identify a detailed process to improve both the epidemiological and cost data available to study and assess measures to reduce cancer health disparities.
Second, sponsor studies to develop better methods to measure cancer health disparities and evaluate costs associated with cancer health disparities. Third, include cost-effectiveness assessments in any clinical trials or interventions sponsored by NCI to reduce cancer health disparities. Fourth, coordinate activities with other federal agencies to implement initiatives to reduce cancer health disparities.
40 Economic Costs of Cancer Health Disparities: Summary of Meeting Proceedings Re