This is a guest blog by Taneli Hirvola (M. Sc.), Project Leader at the Boston Consulting Group. He is a Core member of BCG’s Healthcare Practice in the Nordics, and works with leading Healthcare providers, MedTech suppliers and Pharma companies on e.g. Oncolology and Value-Based Healthcare topics.
Most healthcare systems are poor at measuring value – where value is defined as the quality of patient outcome per unit of cost.
Maximizing value-delivered to patients should be a “win-win” where better patient outcomes can be achieved at a lower cost. However, if better patient outcomes would require a higher investment (or the additional short-term cost is easier to quantify than the long-term savings) – the value equation gets more complicated.
Early detection improves outcomes and reduces cost of treatment
Let’s use Colorectal cancer (CRC) treatment as an example to highlight the importance of early detection for both outcomes and cost:
- Survival rate declines dramatically as the disease progresses: 5-year survival for Stage I CRC is ~90% vs only 10% for Stage IV
- An early stage CRC can be ideally treated with a minimally invasive endoscopy at a low cost (less than $5,000 per year) whereas late stage CRC requires multidisciplinary treatment with multiple surgeries, chemotherapy and potentially radiation (only rectal cancer)
Screening is crucial for early detection
Severe symptoms typically emerge at later stages, thus majority of CRC cases are diagnosed at a late stage (III-IV). Different healthcare systems are trying to tackle the dilemma of early detection with different screening strategies.
In the U.S., colonoscopy is the first line screening method for CRC. In fact, 56% of 50-74-year-olds have had a colonoscopy (or sigmoidoscopy) within the last 10 years in the U.S. vs only 13% in the U.K.
In the U.K., stool blood test is the first line screening method – a significantly cheaper test ($1-5 per test) than colonoscopy (~$500 in the UK, up to $5,000 in the U.S.) but also incapable of identifying polyps or earliest stage cases.
Colonoscopy saves lives through lower incidence and higher survival rate
5-year survival rate for CRC patients in the U.S. (64%) and in the U.K. (56%), reveals a dramatic 8 ppt difference. This means that, 22,000 CRC cases and 2,000 deaths could be avoided annually in the U.K. if both incidence and survival could be improved to the U.S. level.
Currently 41,000 new colorectal cancer cases are diagnosed in the U.K. every year i.e. 72 cases per 100,000 population. In the U.S., incidence is only 36 cases per 100,000 population. The low incidence in the U.S. is a result of a 10-year improvement from 51 to 37 per 100,000 population in incidence – at least partially driven by a heavy increase in colonoscopy coverage (from 36% to 56% of 50-74-year olds). The rationale for this is that lesions can be removed in a colonoscopy before they develop into cancer cells.
Preventive care has a price tag – are we ready to invest?
CRC spend of National Health Service (NHS) is approximately £420 million (41,000 cases, and £10,200 per case). Avoiding 22,000 new cases per year at £10,200 per case would give direct savings of £220M, and additional £40M million savings from avoided costly late stage treatment.
Improvement in health outcomes obviously requires additional investment in prevention. This simple CRC example summarizes three typical issues that public health systems face while striving to improve value of care:
- Public health systems operate at constrained budgets – and prevention vs treatment are typically financed from different budgets despite the fact that investment in prevention would ultimately help save in treatment cost
- Financial constraints lead to a discussions of “the value of a life-year gained” – obviously a difficult question to answer
- Finally, even if funding of screening procedures would be solved, in practice implementation of such program would require a significant increase in education of specialists (e.g. gastroenterologists) to do the job
The big question is: Are we ready to invest for better health and long-term savings?
Sources:
OECD Health data 2014-2016
UK Cancer Research – Saving lives, averting cost
National Cancer Institute
Cancer Trends Progress Report 2014 Update
Office for National Statistics (UK)