Katrien Kesteloot

Activity-based costing: a practical model for cost calculation in radiotherapy

PURPOSE The activity-based costing method was used to compute radiotherapy costs. This report describes the model developed, the calculated costs, and possible applications for the Leuven radiotherapy department. METHODS AND MATERIALS Activity-based costing is an advanced cost calculation technique that allocates resource costs to products based on activity consumption. In the Leuven model, a complex allocation principle with a large diversity of cost drivers was avoided by introducing an extra allocation step between activity groups and activities. A straightforward principle of time consumption, weighed by some factors of treatment complexity, was used. The model was developed in an iterative way, progressively defining the constituting components (costs, activities, products, and cost drivers). RESULTS Radiotherapy costs are predominantly determined by personnel and equipment cost. Treatment-related activities consume the greatest proportion of the resource costs, with treatment delivery the most important component. This translates into products that have a prolonged total or daily treatment time being the most costly. The model was also used to illustrate the impact of changes in resource costs and in practice patterns. CONCLUSION The presented activity-based costing model is a practical tool to evaluate the actual cost structure of a radiotherapy department and to evaluate possible resource or practice changes.

A typology for provider payment systems in health care

A typology to classify provider payment systems from an incentive point of view is developed. We analyse the way, how these systems can influence provider behaviour and, a fortiori, contribute to attain the general objectives of health care, i.e. quality of care, efficiency and accessibility. The first dimension of the typology indicates whether there is a link between the providers income and his activity. In variable systems, the provider has an ability to influence his earnings, contrary to fixed systems. The second dimension indicates whether the providers payments are related to his actual costs or not. In retrospective systems, the providers own costs are the basis for reimbursement ex post whereas in prospective systems payments are determined ex ante without any link to the real costs of the individual provider. These different characteristics are likely to influence provider behaviour in different ways. Furthermore the most frequently used criteria to determine the providers income are discussed: per service, per diem, per case, per patient and per period. Also a distinction is made between incentives at the level of the individual provider (micro-level) and the sponsor (macro-level). Finally, the potential interactions when several payment systems are used simultaneously are discussed. This typology is useful to classify and compare different types of payment systems as prevailing in different countries, and provides a useful framework for future research of health care payment systems.

A review of the literature on the economics of noncompliance. Room for methodological improvement

Therapeutic noncompliance is a major issue in health care, having important negative consequences for clinical outcome as well as for health-care costs. This paper reviews the literature on the economics of therapeutic noncompliance, identifies methodological shortcomings and formulates recommendations for future economic research in this area. Medication noncompliance was explored more extensively, as the majority of articles dealt exclusively with this aspect of therapy. Eighteen studies were assessed according to their definition and measurement of medication noncompliance, study design, and identification and valuation of costs and outcomes. Very diverse designs and often invalid methods for calculating costs were found. Medication noncompliance is often ill-defined and measured in an inaccurate way. The economic consequences of therapeutic noncompliance have rarely been investigated according to the standard principles of good economic evaluation. Six studies examined both costs and consequences of noncompliance in a cost-outcome description or a cost-benefits, cost-effectiveness or cost-utility analysis. Eight studies dealt with the economic value of compliance-enhancing interventions. In general, studies on the economic consequences of noncompliance lack methodological rigour and fail to meet qualitative standards. There is a clear need for more and better research on the impact of noncompliance, on the cost-effectiveness of interventions and the potential of compliance-enhancing interventions to improve patient outcomes and/or reduce health-care costs.

Palliative radiotherapy practice within Western European countries: impact of the radiotherapy financing system?

PURPOSE To analyze the reimbursement modalities for radiotherapy in the different Western European countries, as well as to investigate if these differences have an impact on the palliative radiotherapy practice for bone metastases. MATERIALS AND METHODS A questionnaire was sent to 565 radiotherapy centres included in the 1997 ESTRO directory. In this questionnaire the reimbursement strategy applied in the different centres was assessed, with respect to the use of a budget (departmental or hospital budget), case payment and/or fee-for-service reimbursement. The differences were analyzed according to country and to type and size of the radiotherapy centre. RESULTS A total of 170 centres (86% of the responders) returned the questionnaire. Most frequent is budget reimbursement: some form of budget reimbursement is found in 69% of the centres, whereas 46% of the centres are partly reimbursed through fee-for-service and 35% through case payment. The larger the department, the more frequent the reimbursement through a budget or a case payment system and the less the importance of fee-for-service reimbursement (chi(2): P=0.0012; logit: P=0.0055). Whereas private centres are almost equally reimbursed by fee-for-service financing as by budget or case payment, radiotherapy departments in university hospitals receive the largest part of their financial resources through a budget or by case payment (83%) (chi(2): P=0.002; logit: P=0.0073). A correlation between the country and the radiotherapy reimbursement system was also demonstrated (P=0.002), radiotherapy centres in Spain, the Netherlands and the United Kingdom being almost entirely reimbursed through a budget and/or case payment and centres in Germany and Switzerland mostly through a fee-for-service system. In budget and case payment financing lower total number of fractions and lower total dose (chi(2): P=0.003; logit: P=0.0120) as well as less shielding blocks (chi(2): P=0.003; logit: P=0.0066) are used. A same tendency is found for the use of isodose calculations and field set-up, but without being statistically significant (P=0.264 and P=0.061 res.). The type of the centre and the reimbursement modality influence the fractionation regimen independently (P=0.0274). This is not the case for the centre size and the reimbursement, which were found to exert correlated effects on the fractionation schedule (P=0.1042). CONCLUSION Reimbursement systems seem to influence radiotherapy practice. One should therefore aim to develop reimbursement criteria that pursue to deliver, not only the best qualitative, but also the most cost-effective treatments to the patients.

Differences in palliative radiotherapy for bone metastases within Western European countries

PURPOSE To evaluate the differences in palliative radiotherapy for painful bone metastases amongst different Western European countries. MATERIALS AND METHODS A questionnaire was sent to 565 radiotherapy centres in 19 Western European countries, based on the 1997 ESTRO directory. In this questionnaire the current local palliative radiotherapy practice for bone metastases was assessed in terms of total dose, fractionation, treatment complexity (use of shielding blocks, frequency of isodose calculations, field set-up) and type of machine used. The differences were analyzed according to the country and to the type and size of radiotherapy centre. RESULTS A total of 205 centres (36%) returned the questionnaire, of which 198 could be further analyzed. The most frequently used antalgic fractionation schedule is 30 Gy in ten daily fractions of 3 Gy (50%), single fractions and conventional 2 Gy fractions being used in a minority of the centres (respectively, 11 and 9%). Most antalgic treatments are performed on a linear accelerator (67% of the centres uses linear accelerators) and 64% of the centres predominantly uses a two-field set-up. The majority of the centres uses shielding blocks and performs isodose calculations in less than 50% of the patients, (respectively, 88 and 81%). There is a correlation between the centre size and the palliative irradiation practice, the largest centres using more hypofractionation (chi(2): P=0.001; logit: P=0. 0003) and a less complex treatment set up as expressed by the use of isodose calculations (chi(2): P=0.027; logit: P=0.0161). There is also a tendency to use less shielding blocks (P=0.177). The same goes for university centres as compared with private centres: university centres use shorter fractionation schedules (chi(2): P=0. 008; logit: P=0.0094), less isodoses (chi(2): P=0.010; logit: P=0. 0115) and somewhat less shielding blocks (P=0.151). Amongst the analyzed countries different tendencies in fractionation (P=0.001) and treatment complexity are observed (use of isodoses: P=0.014, use of shielding blocks: P=0.001). CONCLUSION These data suggest that beside work-load and clinical evidence, country-related factors such as tradition and habits, past teaching, the national organization of health care and reimbursement criteria may influence the local practice.

Comparison of plastic and Orfit® masks for patient head fixation during radiotherapy: Precision and costs

PURPOSE Two widely used immobilization systems for head fixation during radiotherapy treatment for ear-nose-throat (ENT) tumors are evaluated. METHODS AND MATERIALS Masks made of poly vinyl-chloride (plastic) are compared to thermoplastic masks (Orfit) with respect to the accuracy of the treatment setup and the costs. For both types of material, a cut-out (windows corresponding to treatment fields) and a full mask (not cut out) are considered. Forty-three patients treated for ENT tumors were randomized into four groups, to be fixed by one of the following modalities: cut-out plastic mask (12 patients), full plastic mask (11 patients), cut-out Orfit mask (10 patients), and full Orfit mask (10 patients). RESULTS Reproducibility of the treatment setup was assessed by calculating the deviations from the mean value for each individual patient and was demonstrated to be identical for all subgroups: no differences were demonstrated between the plastic (s = 2.1 mm) and the Orfit (s = 2.1 mm) group nor between the cut-out (s = 2.0 mm) and not cut-out (s = 2.1 mm) group. The transfer chain from similar to treatment unit was checked by comparing portal images to their respective simulation image, and no differences between the four subgroups (s = +/- 3.5 mm) could be detected. A methodology was described to compare the costs of both types of masks, and illustrated with the data for a department. It was found that Orfit masks are a cheaper alternative than plastic masks; they require much less investment expenses and the workload and material cost of the first mask for each patient is also lower. Cut-out masks are more expensive than full masks, because of the higher workload and the additional material required for second and third masks that are required in case of field modifications. CONCLUSIONS No substantial difference in patient setup accuracy between both types of masks was detected, and cutting out the masks had no impact on the fixing capabilities. A first Orfit mask will typically be a cheaper alternative than a plastic mask for most departments (lower fixed and variable costs). The higher material cost of the subsequent Orfit masks, compared to the plastic masks, offset the lower investment expenses.

The economic implications of non-adherence after renal transplantation

AbstractBackground: The economic impact of therapeutic non-adherence in chronic diseases has rarely been examined using qualitative standards for economic evaluation. This study illustrates the impact of non-adherence on the cost utility of renal transplantation versus haemodialysis from the societal perspective and examines the scope for adherence-enhancing interventions. Methods: Long-term costs and outcomes in adherent and non-adherent renal transplant patients were simulated in a Markov model. The cost (euros, year 2000 values) and outcome data that were imputed in the model were derived from a prospective study in renal transplantation candidates performed in 2002. Probabilities of adverse events, graft rejection, graft loss and death in adherent and non-adherent renal transplant patients were derived from literature. Results: Compared with dialysis, renal transplantation offers a better outcome in both adherent and non-adherent patients. Lifetime costs after transplantation in the adherent patient group are higher than lifetime dialysis costs and lifetime costs in the non-adherent patient group, mainly because adherent patients live longer after transplantation. Long-term outcomes after transplantation are better for adherent than for non-adherent patients. The mean cost per QALY gained in adherent patients relative to non-adherent patients was €35 021 per QALY (95% CI 26 959, 46 620). Conclusion: Compared with established healthcare interventions, such as haemodialysis, renal transplantation can be considered a cost-effective therapy for patients with end-stage renal disease, even if patients are non-adherent after transplantation. The low incremental cost per QALY calculated in this model for adherent renal transplant patients, suggests there may be scope for adherenceenhancing interventions (provided that such interventions with a sufficiently high effectiveness exist or can be developed). As the findings are based on simulated long-term costs and outcomes, they should not be considered as precise estimates of the impact of non-adherence. This study is rather meant as an illustration of how non-adherence may impact on the results of cost-effectiveness analyses.

Improved management of radiotherapy departments through accurate cost data.

BACKGROUND AND PURPOSE Escalating health care expenses urge governments towards cost containment. More accurate data on the precise costs of health care interventions are needed. We performed an aggregate cost calculation of radiation therapy departments and treatments and discussed the different cost components. MATERIALS AND METHODS The costs of a radiotherapy department were estimated, based on accreditation norms for radiotherapy departments set forth in the Belgian legislation. RESULTS The major cost components of radiotherapy are the cost of buildings and facilities, equipment, medical and non-medical staff, materials and overhead. They respectively represent around 3, 30, 50, 4 and 13% of the total costs, irrespective of the department size. The average cost per patient lowers with increasing department size and optimal utilization of resources. Radiotherapy treatment costs vary in a stepwise fashion: minor variations of patient load do not affect the cost picture significantly due to a small impact of variable costs. With larger increases in patient load however, additional equipment and/or staff will become necessary, resulting in additional semi-fixed costs and an important increase in costs. A sensitivity analysis of these two major cost inputs shows that a decrease in total costs of 12-13% can be obtained by assuming a 20% less than full time availability of personnel; that due to evolving seniority levels, the annual increase in wage costs is estimated to be more than 1%; that by changing the clinical life-time of buildings and equipment with unchanged interest rate, a 5% reduction of total costs and cost per patient can be calculated. More sophisticated equipment will not have a very large impact on the cost (+/-4000 BEF/patient), provided that the additional equipment is adapted to the size of the department. That the recommendations we used, based on the Belgian legislation, are not outrageous is shown by replacing them by the USA Blue book recommendations. Depending on the department size, costs in our model would then increase with 14-36%. CONCLUSION We showed that cost information can be used to analyze the precise financial consequences of changes in routine clinical practice in radiotherapy. Comparing the cost data with the prevailing reimbursement may reveal inconsistencies and stimulate to develop improved financing systems.

Bargained shares in joint ventures among asymmetric partners: Is the matthew effect catalyzing?

The impact of asymmetries between partners on the likelihood of establishing successful research and development and production joint ventures relative to the alternative of own development is assessed analytically. The often empirically observed 50/50 sharing rule in asymmetric alliances is compared to a bargained rule, where asymmetries in absorptive capacity, as well as R&D and production efficiency are explicitly taken into account. Industry settings in which successful asymmetric alliances are more likely to occur are pinpointed. The analysis focuses on the influence of the size and format of these asymmetries, the technological appropriability and complementarity between partners on the incentives for both partners to cooperate as well as to cheat on the venture agreement. The results are compared to a setting where the joint venture is only involved in R&D.

On the design of stable joint ventures

Abstract An analytical model is developed to study the problem of designing stable joint ventures aimed at jointly developing and supplying a new technology. The analysis focuses on the extent to which traditional motives for joint ventures like cost sharing, synergy effects or technological spillovers may shape the incentives for firms to cheat on the arrangement and hence despite larger cooperative benefits, endanger the formation of a stable agreement. The cheating firm, although supplying the contractually specified inputs to the venture, manages to keep its knowhow proprietary while benefiting from the loyal partners know-how through spillovers from the venture. Only if know-how can be kept sufficiently proprietary within the venture, will synergy effects stimulate the formation of a stable joint venture, increasing the profitability of cooperation while at the same time stifling the incentives to cheat. But if know-how becomes difficult to appropriate, synergy effects may increase the incentives to cheat, resulting in no agreement at least when both parties have perfect foresight.