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Variable and fixed costs in NHS radiotherapy; consequences for increasing hypo fractionation
Katie Spencer1, Noemie Defourny2, David Tunstall3
1Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds, United Kingdom; Leeds Cancer Centre, Leeds Teaching Hospitals NHS Trust, United Kingdom.
Summary
Increased use of hypofractionated radiotherapy alters department costs. High fixed costs mean reduced activity increases treatment expenses, impacting reimbursement strategies for radiotherapy services.
Area of Science:
- Oncology
- Health Economics
- Radiotherapy Physics
Background:
- The increasing adoption of hypofractionated radiotherapy regimens presents challenges to departmental operations and cost structures.
- While hypofractionation is anticipated to be cost-effective, substantial fixed costs within departments may hinder the realization of these savings.
- A comprehensive understanding of radiotherapy cost drivers, their fixed nature, and the financial implications of reduced activity is crucial for refining reimbursement policies.
Purpose of the Study:
- To estimate the cost of radiotherapy provision for bone metastases treatment strategies using time-driven activity-based costing.
- To compare these cost estimations with existing reimbursement tariffs within the National Health Service (NHS).
- To analyze the breakdown of costs into fixed, semi-fixed, and variable components and assess the impact of activity reduction and disinvestment.
Main Methods:
- Employed time-driven activity-based costing to estimate costs for five distinct bone metastases radiotherapy treatment strategies.
- Conducted a comparative analysis against NHS reimbursement tariffs.
- Performed sensitivity analyses to identify key cost drivers and evaluate the financial consequences of reduced departmental activity, considering varying disinvestment scenarios.
Main Results:
- Radiotherapy costs for bone metastases ranged from €430.95 (single fraction) to €4240.76 (45 Gy in 25 fractions).
- Provider costs closely matched NHS reimbursement, with stereotactic ablative body radiotherapy (SABR) being a notable exception, exceeding the tariff by 15.3%.
- Fixed and semi-fixed costs (buildings, staff, linear accelerators) constituted a significant portion (66.6-94.5%) of total provider costs, with departmental activity identified as the primary cost driver.
Conclusions:
- Hypofractionation offers a cost-efficient method to manage increasing patient numbers within existing radiotherapy capacity, with reduced patient burden.
- The high proportion of fixed and semi-fixed costs complicates disinvestment, and imbalances between demand and capacity lead to increased treatment costs.
- Current per-fraction reimbursement models may inadvertently discourage the adoption of more cost-efficient hypofractionated treatments.
