WTP?

In 2006, the cost of cancer care in the United States was over $100 billion. Since then, several new drugs have entered the “market” that carry price tags of $30K and upward (often for a benefit that some would consider, well, questionable). Avastin, approved for lung cancer, can cost $100,000 per year. In other words, the cost is continuing to rise.

To cope with the high cost of treating cancer, many insurers are employing cost-sharing strategies. That is, raising out-of-pocket expenses. For esteemed oncologist Neal Meropol, who recently took a sabbatical in order to study the economics of cancer care, the increasing amounts of money that patients are shelling out toward their care raises an obvious question: to what extent are cancer patients willing to consider value as they think about treatment decisions?

A few months ago, Meropol and colleagues published the results of a survey they conducted to answer this very question. According to Meropol, the survey found that “patients can actually place a dollar threshold on what they were willing to pay for a particular benefit.”

The study surveyed 60 patients, mostly female and mostly under age 65. Just over half were employed full-time. Here’s a sample question:

Now imagine you have a cancer that is not curable. Your doctor has recommended chemotherapy to relieve symptoms and help you live longer. Your doctor has offered you the choice of taking one medicine, or two medicines combined. Chemotherapy H when taken alone helps 15% (15 of 100 patients) live two years. This means that if 100 patients like you take this chemotherapy, 15 will be alive at 2 years. Combination Chemotherapy H plus Chemotherapy I helps 23% (23 of 100) patients live two years. This means that if 100 patients like you take these two medicines together, 23 will be alive at 2 years. … Chemotherapy H is fully covered by your insurance. However, if you choose Combination Chemotherapy H plus I, you will have a co-payment each time you receive treatment. Considering all of the financial resources available to you, as well as your current expenses, what is the highest co-payment you will be willing to pay ever three weeks you receive Combination Chemotherapy H plus I?

It’s probably not surprising that the percentage of patients willing to pay for a particular treatment was directly related to the presumed benefit of that treatment. But breaking down that willingness into exact numbers provides a fascinating look into that consideration. For example, 22% of patients surveyed were willing to pay (WTP) a higher co-payment for a median survival of 11 months, whereas 56% said they would pay the same amount for 20 months. Twice the benefit equals, roughly, twice the willingness.

WTP was also tied to employment. Again, the point may be obvious, but it forces to the surface the stark reality about the connection between the benefit of one’s care and the thickness of one’s wallet. For a treatment with a 2-year survival rate of 34%, 81% of employed patients were willing to do the higher co-pay versus 44% of unemployed patients.

Meropol his colleague, Yu-Ning Wong, of Fox Chase Cancer Center, have begun a follow-up survey that integrates side effects into the considerations. And hopefully the survey will cover a larger and more diverse population of cancer patients. But even these initial findings have important implications. As Meropol explains, insurance coverage should be tied to the value of a drug, not the cost. “The prices set by the pharmaceutical industry are based on our society’s willingness to pay,” says Meropol. Most of that cost is covered by insurance plans. But increased cost-sharing is discouraging the use of all expensive medications, even the truly beneficial ones. The long-term solution, says Meropol, is to structure out-of-pocket costs around benefit, not price tag: a treatment with a modest benefit will cost more than a treatment is curative. In addition, says Meropol, “the physician community [needs to] avoid the use of treatments for which there is little evidence of benefit.”

Of course, collecting that evidence is not so easy. That’s where the ASCO Cost of Care Task Force comes in. ASCO—the American Society of Clinical Oncology, the field’s largest organization—is currently developing tools to help doctors understand the comparative costs and benefits of various regimens for treating any particular type of cancer. But the work is slow going and has yet to yield any tangible materials for doctors to refer to in their daily practice.

Still, establishing the fact that patients are able to (1) distinguish value among treatment options and (2) coolly evaluate their willingness to pay for a given benefit (that is, a certain number of months added to their lives) could provide a useful next step in understanding how to integrate cost considerations into care.

image courtesy of http://www.flickr.com/photos/kbrookes/4526653278/sizes/m/in/photostream/.

Related Posts Plugin for WordPress, Blogger...
This entry was posted in cancer, drug cost and tagged , , , , , , , . Bookmark the permalink.

One Response to WTP?

  1. Steven says:

    ““The prices set by the pharmaceutical industry are based on our society’s willingness to pay,” says Meropol.”
    .. and boy are we ever ready to pay through the nose just to stretch out our lives, despite the quality of that life being less-than-stellar.

    What I’m missing from the stated question is the projected time left on this planet in the first place. Presumably if I told the doctor that I wouldn’t take any treatment, I wouldn’t die on the spot. I’d say that would weigh into the decision as well.

    For example, if the doctor gives me another 3 months for sure, but 6 months at best, without treatment – while with treatment I may or may not gain some additional months – then I might find that 3 months is plenty of time to deal with affairs, say goodbye to my loved ones, and arrange for a peaceful death in whatever time I do have left.

    On the other hand, if he tells me that I’ve got 2 weeks at most, I wouldn’t mind paying for the chance (whatever the percentage would work out as – presuming non-linear distribution) for an additional 10 weeks. But after that, I’d once again arrange for a peaceful death and leave the many tens of thousands of Dollars (well, Euros in my case) if not more, to my loved ones / charity where hopefully it would find much better use than trying to prolong my life.

    When it’s my time to go, it’s my time to go, regardless of financial means.

    That said, it’s ridiculous that these treatments – and medical care in general – cost as much as they do in the first place.. and there seems to be no end in sight as to the rise in cost.