Is the price of cancer treatment falling?
- Presenter:
Chair: Randall Ellis; Discussant: Tzu-chun Kuo Mon June 5, 2006 17:15-18:45 Room 235
Rationale: Cancer care represents one of the most costly sectors of the medical care. Rapidly rising costs form medical care pose a crisis of “sustainability” of publicly funded health care systems. With rapidly evolving medical technology, it is unclear whether price increases or greater utilization is responsible for more of the increase in health care system costs.
Objectives: The goal of the study is to assess the impact of changing technology for cancer treatments on health care costs to distinguish price changes from quality/quantity changes.
Methodology: We estimate two types of price indexes: a service price index (SPI) that reflects the price of particular treatments over time, and a cost-of-living index (COLI) which measures an outcome-adjusted cost of treating a specific health problem and reflects price variations by discounting any technological/quality effects. The two indexes are estimated for the period 1995/96 and 2001/02 by combining data on cancer patients admitted to hospitals participating in the Ontario Case Costing Initiative (OCCI) with death data from the Canadian Cancer Registry (CCR).
Results: Hospital cost per patient increased slightly in Ontario for lung, breast, prostate and colorectal cancer. The SPI rose at an average annual rate of 2.0%. However, taking into account health outcomes from better health care technology, it is clear that the price of cancer treatment is falling rapidly. The COLI fell by 9.2% annually. Although cancer prevalence is increasing, more effective treatments are helping to hold costs down.
Conclusions: Recognition of the cost drivers in the total medical cost is important, as policy implications would vary. Given that cost increases are attributable to the wider use of more effective treatments there is a net social benefit associated with the expenditure increase. This study supports the growing international evidence that costs of care for some diseases are falling.
