Ablation costs are significantly less than those of transarterial chemoembolization (TACE) and Yttrium-90 (Y-90), according to a comparative cost analysis of the three procedures at a tertiary care centre. These results were presented at the 2019 annual meeting of the Society for Interventional Oncology (SIO; 7–11 June, Boston, USA) by Damir Ljuboja (Harvard Medical School, Boston, USA).
Ljuboja and colleagues used a relatively novel granular costing methodology developed by accounting academic Robert Kaplan (Harvard Business School, Boston, USA), called time-driven, activity-based costing, to estimate and compare the costs of TACE, Y-90 and ablation for the treatment of hepatocellular carcinoma (HCC) in their centre in Boston, USA. According to the investigators, “Only 36% of Medicare patients diagnosed with HCC receive cancer-directed therapy. Among them, TACE is utilised 10 times more frequently than ablation for these patients. Creation of an HCC-based bundled payment model may improve overall treatment utilisation, use of potentially curative treatments, and patient outcomes. However, the true costs of locoregional therapies are poorly understood.”
To gain a more accurate understanding of the costs of locoregional therapies for treating HCC, then, three observers prospectively recorded the utilisation time for staff members and equipment used to treat ten HCC patients with TACE, Y-90, and ablation procedures. Previous cost comparative studies in interventional radiology have determined prices from Medicare reimbursement rates, whereas in this present study, the investigators prospectively calculated the costs themselves. This bottom-up approach was intended to identify sources of variability in costs as well as provide a direct comparison between the expense of treatment modalities.
Ljuboja explained to the SIO audience the time-driven, activity-based costing methodology: “You first take a procedure and develop a process map for it, in which you identify each step from admission to discharge individually. Then, you prospectively measure [the duration of] each of those steps for each individual personnel member involved. For that person you can calculate a capacity cost rate using salary data, which allows you to estimate their clinical viability, usually measured in [US] dollars per minute. Multiply that by the number of minutes used, and you have the cost for that resource.” The costs of equipment and consumable supplies used in each procedure, as well as their number, were also recorded. The summation of all resource costs then gave the investigators the total procedure cost.
“We decided to do this prospectively initially. Small numbers of direct measurements are very time intensive and labour intensive, but it is very accurate”, Ljuboja said of their approach. In addition to this prospective data collection, the investigators then retrospectively looked at the electronic medical record (EMR) to get time stamp data for the same procedures to verify if retrospective data can be used in place of prospective data. The difference between the retrospectively obtained data and the prospectively obtained data was not statistically significant for any of the three procedures, demonstrating that this analysis can be conducted retrospectively, saving time for the researchers. “Once we had validated that methodology”, Ljuboja continued, “we then retrospectively looked at all the cases from 2018”.
They found that total ablation costs, from admission to discharge, were US$3,813. This was 75% of the total cost for TACE (US$5,097) and 18% of the total cost of Y-90 (US$20,745). The cost for an ablation increased to US$4,245 for one versus two lesions treated, and increased again to US$4,461 for three lesions treated with two probes. The cost of TACE increased from US$5,097 to US$5,296 for non-selective (lobar) versus selective TACE.
Breaking these results down, Ljuboja noted that the greatest personnel cost was observed in TACE. “A large function of that was use of the medicine attending and medicine resident, primarily because the patient was admitted overnight. Another notable thing”, he continues, “is the technologist cost for Y-90 procedures. This factors in to both the treatment stage and the planning stage.” Fixed equipment costs were relatively low, “because the length of the procedures is short relative to the timeline on which these items are used”, Ljuboja explained. “For example, a CT scanner depreciates over the course of eight to 10 years, and if you atomise the cost of that CT scanner across that time horizon, then this is a relatively small amount of time we are talking about.”
Consumables were the greatest cost contributor across all three procedures and accounted for 63% of ablation, 57% of TACE, and 91% of Y-90 costs. “Of note”, Ljuboja wrote in his presentation abstract, “each procedure has a single consumable that accounted for a substantial portion of the overall procedure cost, namely ethiodized oil for TACE (30%), Y-90 resin microspheres for Y-90 (81%), and the probe for ablation (41%).”
“The point of these studies is to identify cost levers that we can pull to minimise the cost to overall maximise the way we are spending our money when it comes to following these procedures, so I think from out study we have identified that there are two different approaches that can be taken. One involves the use of alternative labour sources when it is clinically appropriate; the other is using collective bundled agreements with manufacturers to drive down the price of consumables and equipment”, Ljuboja concluded.
Acknowledging that one of limitations of this study is that it was conducted entirely at a single centre, Ljuboja told the SIO attendees that replication of these methods at other institutions will enable the investigators to determine the inter-centre variability in costs of these procedures, and additionally may allow for the creation of a representative national or regional bundled payment model to improve utilisation of locoregional therapies for patients with HCC.
“As a specialty, we are a little bit guilty of navel-gazing—we are looking inwards a bit. What might be really interesting is to extend some of your methodology to other cancer treatments. I mean radiation therapy, some chemotherapies, and immune oncology, because I think it might be quite surprising to the world to see what our true costs are versus some of the things that are done in other specialties”, commented Fred Lee (University of Wisconsin School of Medicine and Public Health, Madison, USA).
“One thing I will say to address that is that this methodology has been used in other specialties in the past,” a commenter responded from the floor, “primarily surgical specialties on the scale of singular events. A good example is total knee replacements, so they isolated that entire care cycle and calculated all the costs. It has been used to some extent in oncologic procedures, primarily in radiation oncology and surgical oncology, but I think in IR it is a relatively new concept, and we are one of the first studies to evaluate [our procedures in this way].”
Ljuboja noted that studies looking into costs often use Medicare reimbursement rates as the base data, and this does not allow the investigator to determine how best to bring costs down. The granularity of the data provided by the methodology in the current study—using the Harvard-derived time-driven, activity-based costing method—enables exactly that. “As the payment landscape in the USA is moving toward alternative payment models—there is already an oncology care model—one of the biggest challenges that comes with that is that if you are asking payers to pay a bundled payment over the lifetime of a patient, you have to understand your true costs in order to actually generate a profit or make sure that your financial enterprise is viable. So this is where that work fits in,” he opined.