Cost-Effectiveness of Early-Stage Lung Cancer Adjuvant Treatments in Practice Using Instrumental Variable Estimates
- Presenter:
Chair: John Rizzo; Discussant: James Henderson Mon June 5, 2006 10:45-12:15 Room 213
Rationale: Treatment “effectiveness” is generally defined as the effect of a treatment used in practice. Yet the usual approach in cost-effectiveness analysis is to use treatment efficacy and cost estimates from controlled trials to estimate what should be called “cost-efficacy” ratios. In an earlier paper (Journal of Econometrics,vol (77), 1997, pp 39-64) McClellan and Newhouse proposed using instrumental variable (IV) methods to estimate treatment effectiveness and treatment cost in practice to estimate true cost-effectiveness ratios. We apply their approach here. Our cost-effectiveness ratio estimates are from Medicare’s perspective and can help policy-makers judge whether treatments are over or underused in practice.
Objectives: To estimate cost-effectiveness ratios for adjuvant treatments (first course chemotherapy and radiation therapy after surgery) in practice for patients with non-small cell early-stage lung cancer (ESLC).
Methodology: We used patients with ESLC that had surgery for tumor removal in the SEER-Medicare linked database, 1992-1999 and assessed whether patients had adjuvant chemotherapy and radiation after surgery. Outcomes measured for each patient were three-year survival and total three-year Medicare reimbursements post surgery. Separate but identically specified instrumental variable models were estimated for each outcome variable. Both treatment variables (chemotherapy and radiation) were specified separately in each model. Instruments included local area (50-mile radius around patient residence) treatment rates over the period 1992-1999 and local patient concentration indices among essential providers (medical oncologists, radiation treatment centers). All models controlled for tumor stage, grade and site, patient age, gender, and race, and the socioeconomic characteristics of the patient’s zipcode. Models were re-estimated with different instrument specifications to assess the robustness of the estimates. Cost-effectiveness ratios were estimated as the ratio of the treatment-specific IV three-year cost estimate to the treatment-specific IV three-year survival estimate.
Results: Instruments had statistically significant effects on the choice of each treatment. Using IV analysis, adjuvant chemotherapy had positive and statistically significant effects on three-year survival and Medicare reimbursements. The statistical significance of these estimates varied somewhat with the instrument specification but the effects remained positive. No statistically significant relationships were found between adjuvant radiation and three-year survival or three-year Medicare reimbursements. Using different instrument specifications we found three-year adjuvant chemotherapy cost-effectiveness ratios ranging from $37,854 to $113,829.
Conclusions: Using the rationale within McClellan and Newhouse, our estimates suggest that increasing the rate of adjuvant chemotherapy for ESLC patients would cost Medicare between $37,854 to $113,829 for each additional three years of life saved. If a year of human life is valued around $75,000, these results suggeste that adjuvant chemotherapy was underused for ESLC patients. As radiation therapy did not increase three year survival this suggests that radiation treatment was potentially overused.
Disclosure Information: This research was supported by a grant from the National Cancer Institute.
