The Economics of Cancer Care

The Economics of Cancer Care

Cancer care is an essential component of all health systems. The economic burden of cancer is considerable and is increasing significantly. According to American Cancer Society Report, the total economic impact of premature death and disability from cancers worldwide was $895 billion in 2008, representing 1.5 percent of the world’s Gross Domestic Product (GDP). This figure increased to approximately $1.16 trillion as per the World Cancer Report 2014 by International Agency for Research on Cancer. Yet, with only limited knowledge available, we are far from analyzing the spendings associated with cancer care. Considering the immense impact of cancer on patients and their families, in terms of physical health and financial health, there is an urgency to identify more evidence about the cost efficacy of cancer care.

The India story

With limited sustained funding and only a few centres of expertise in India, the domestic situation is much worse in comparison to the global scenario. Indian Council of Medical Research (ICMR), in its 2016 projection, said that the total number of new cancer cases is expected to be around 14.5 lakh and the figure is likely to reach nearly 17.3 lakh new cases in 2020. Data also revealed that only 12.5 percent of patients come for treatment in the early stages of the disease. The fact that often cancer is diagnosed only at critical stages adds to the already steep economic burden that the ailment poses on the nation. The situation is worsened when people with a genetic predisposition to cancer, for instance incidence of breast cancer in close relatives, also feel no necessity to get screened.

The cost angle

Sandeep Kothari, Vice Chairman, Bhagwan Mahaveer Cancer Hospital & Research Centre (BMCHRC) says, “Cancer treatment can turn out to be a nightmare in terms of cost. One of the major reasons for this is wide treatment protocols which vary across a broad range, depending upon the site of cancer and the stage at which it is detected.

In a country like India where a majority of cases are reported at the third and fourth stage, the treatment can cause a hole in the pocket as most often, depending on their type and stage of cancer, patients will require more than one form of treatment which leads to increase in cancer treatment cost. Dr. Ninad Katdare, Consultant – Surgical Oncology, Global Hospitals, Mumbai further explains, “Even though numbers of cases are rising at an alarming rate, the per capita income is not increasing proportionately. Nor are the patients from low socio-economic strata able to afford insurance.

A survey done at All India Institute of Medical Sciences (AIIMS) in 2011 among patients with the most prevalent cancers like head and neck, cervix and breast reported that the average monthly per capita income of households was Rs 1749. Half the households had monthly per capita income of less than Rs 1000.” Another expert, Dinesh Madhavan, Director Healthcare Services, HCG Enterprises pointed out a few other factors, including lack of domain specific practice among most centres and minimum focus on innovation which contributes to rising cost of cancer care. He elaborates that due to lack of newer and better indigenous technologies for cancer management, most of it has to be imported, thus increasing dependency and multiplying cost. Zoya Brar, Founder & MD, CORE Diagnostics also highlighted, “The recent years have seen a major leap in developing technologies to screen for and diagnose various cancers. Advances in pathogen detection, imaging and even personalised medicine treatments have unfortunately also added to the rise in the cost of cancer care in the country.”

Moreover, in a nation like ours, insurance penetration is relatively modest and most of the medical aids involve high out-of-pocket expenses. This has a multifold negative impact on the financial situation of any cancer patient adding to the existing loss of productivity due to the disease

Loss of productivity

Although the cost associated with cancer treatment is predominant, another considerable economic impact of cancer is in terms of loss of life and productivity.

Thus, there is an urgent need to come up with effective measures to battle this beast. Fortunately, the multi-faceted nature and the magnitude of the problem has caught the attention of healthcare stakeholders.

Collaborations to conquer cancer

The loss of productivity and life can only be managed by innovation and extensive research, but escalating costs of treatment can definitely be handled through joint efforts put in by multiple sectors. Agreeing with the idea, Madhavan shared that the way forward in cancer lies in meaningful collaborations between public and private enterprises or between private enterprises. The benefit of this and its aggregation will ensure that cancer treatment is addressed appropriately to create better access and outcome that leads to a better quality of life. He opines, “The next few years of collaborative work will need to be in research, centralised physics, innovation, sharing of resources, protocols, data analysis, early detection, precision medicine, empathy and accessibility. If we ensure to work together, the current cancer burden of over 1.2 million plus newly diagnosed cancer patients can be better managed and ensure the quality of life. If not, the burden of these 1.2 million patients and those already under treatment will be a stark reality.”

Empowering the public sector

In 2011, World Bank reported through World development indicators that India spent an estimated 3·9 percent of its gross domestic product (GDP) on healthcare (both public and private funding) and only 21 percent of which was contributed by the public sector. Though the contribution is relatively low, the sector can be revitalised to improve cancer care significantly.

On the positive side, the Government of India has instigated some commendable initiatives, for instance the National Cancer Grid (NCG). NCG, funded by the Government of India through the Department of Atomic Energy, is amongst the largest cancer networks in the world. It aims to work towards uniform standards of care by adopting evidence-based management guidelines, which are implementable across these centres. Dr Katdare also added, “This plan is to bring parity of cancer treatment in various tiers of the society and provide uniform cancer in all parts of the country. The public domain in the form of the regional cancer centres like Tata Memorial Hospital, WCI Adyar, RCC Trivandrum, etc are also doing great work. They are also establishing many other branches of Tata Memorial Hospital in various parts of the country.”

Other central schemes to financially support specific population groups include Health Minister’s Cancer Patient Fund (HMCPF) is for patients living below the poverty line; Health Minister’s Discretionary Grants to assist poor patients and Central Government Health Scheme (CGHS) for retired Central Government employees & dependents. Even railways offers completely free travel to cancer patients and air concession of 50 percent is offered to patients traveling for treatment. Kothari also highlights, “Medicines used for the treatment of cancer are highly expensive and it is extremely difficult for many patients to afford them.

In addition to opening exclusive cancer centres across states, the Health Ministry is also planning to reduce the cost of expensive medicines, while putting the least pressure on pharma companies in terms of the price margins. This model will result in the government’s own retail system for cancer drugs, like the Jan Aushadhi stores, where generic medicines are sold at much lower prices compared to the branded ones. This way the government plans to ensure availability of quality medicines at affordable prices to all’. Also, the government has decided to extend CGHS kind of model to other cancer patients as well.” V Thiyagarajan, MD, India Home Health Care also informed about the recent developments saying, “Niti Aayog recently has collaborated up with state governments with an aim to improve healthcare delivery. There has been a push for state governments to rely on public-private partnerships (PPP) to gather funds for public health. Consequently, there are increasing number of initiatives being brought about with an aim to improve infrastructure and increase awareness to ensure early detection of cancer.”

Though the government is putting in all these efforts through initiatives and schemes, there is still a long way to go. Dr. Katdare suggested, “The government needs to improve the amount provided for treatments in the government schemes like MJPJAY in Maharashtra, which will make the option economically more viable to private hospitals and increase the uptake of these schemes in private hospital, thus increasing the amount of patients who can be treated in these hospitals.” Dr. Vikas Goswami, Senior Consultant, Dept of Medical Oncology, Fortis Hospital pointed out, “The biggest public sector contribution should be to increase universal insurance for cancer care and increasing the GDP in healthcare.”

The role of the private sector

India has come a long way from where it was two decades ago. But many challenges are yet to be addressed. The private sector, being a vibrant force, accounts for 82 percent of the total $30.5 billion health sector expenditures in 2003 according to one reported survey. Taking into consideration the share held by the sector, the role of the private sector is very crucial. Kothari highlights, “In the private sector, many not for profit organizations like the Indian Cancer Society, Mumbai and Cancer Care Wing managed by Bhagwan Mahaveer Cancer Hospital & Research Centre, Jaipur are working towards spreading awareness, detection and cure of those who are affected with the disease. These not-for-profit organisations conducts early cancer detection camps especially for underprivileged and also provides funds for the treatment.

As per its latest Annual Report, BMCHRC has spent approximately 2.4 crores in the last financial year on the treatment of those patients who can’t afford treatment and belongs to the weaker section of society. Similarly, Indian Cancer Society has spent around 87.13 crores on the treatment as per its Annual Report of 2016-17. These initiatives are good but there is a dire need that other private players also joins in and create a pool which can be used for the treatment of cancer affected patients.

Learnings from the globe

In the US, total healthcare expenditure is pegged at $3.3 trillion and is more than 15 per cent of its GDP in 2016. Back in 2010, cancer care only constituted $124 billion dollars. Similarly, in the UK, the NHS reported that the total cancer care expenditure was around 5-6 percent of total health spending. While many argue that increasing care treatment costs could become responsible for increasing healthcare spending, it would be unwise to deny that such spending has resulted in better infrastructure and access to better treatment methods. As each country has its own legal hurdles and policies for healthcare, strategies to tackle cancer vary greatly. With the number of uncertainties surrounding India’s healthcare ecosystem, a top-down approach is needed where the government intervenes at every level to work towards improving infrastructure and more importantly, making such facilities more accessible.

– V ThiyagarajanMD, India Home Health Care

As per the report of Euro Pancreatic Cancer Index (EPCI) 2014, published by the Sweden-based research organisation Health Consumer Powerhouse (HCP)-Netherlands comes out top with 879 of a possible 1,000 points, followed by Denmark (872), France (812), Ireland (807) and the UK in fifth position. Reason for this is very high quality of cancer research. In Finland, there is a long tradition of collecting samples in bio – banks, which makes genetic information readily accessible. These samples can be linked to comprehensive digital databases of donor health data, which benefits cancer research enormously. Bio-bank samples can be used, for instance, to examine the molecular features of cancer cells in order to find out which treatment works best for different types of cancer. With the help of this model, Finland, which was way behind many other European countries in cancer treatment, has come a long way and is now leading in cancer research and treatment. This research model proved a boon for the patients who were in distress due to higher cost of treatment.

In a country like India where health insurance system is still in its initial phases of popularity, majority of patients settle their bills in cash. The research model adopted by countries like Finland can help enormously in reducing the treatment cost. More and more researches lead to better and cheap methods of treatment. Also, doctors/ clinicians, with the help of research papers, can identify the problem at the right stage leading to lesser diagnostics and investigations.

– Sandeep KothariVice Chairman – Bhagwan Mahaveer Cancer Hospital & Research Centre (BMCHRC)

Most countries that are ranked by WHO in the top 15 countries in health care rankings either follow the Bismarck or the Beveridge Model. Hence, they find themselves rated so since both of them follow a policy that falls under taxation, National Health Service, mandatory Insurance and public and private service with public taking the lead. India is a highly populated country with a WHO rating below 150. So it will need to study these models to find out how the public enterprise and the private enterprise have worked together to ensure better care and quality of life.  Any country that has an over dependency on private health is bound to suffer and so is the case with public health dependency. There needs to be a fine balance between these two like the Yin and Yang.

– Dinesh MadhavanDirector Healthcare Services – HCG Enterprises

Dr. Katdare also adds that trust aided private hospitals need to be regularised and a regular audit of number of patients treated by them needs to be done. This will improve the amount of patients treated. Additionally, a certain percentage can be earmarked for super- specialties where treatment is costly like cancer and also as part of Corporate Social Responsibility for treatment of poorer patients. For eg. In global hospital, we have created affordable packages for cancer surgery wherein the in and out package for an uncomplicated stay is almost 30 percent less than the a-la-carte charges.

Suresh Ramu, Co-founder & CEO, Cytecare Hospitals mentioned about another important segment,” Diagnostics sector plays an integral element in providing cost efficiency during both diagnosis and treatment. There is a need to diagnose effectively with limited set of diagnostic tests rapidly so as to start the accurate treatment immediately. And even though there are vast innovations in the technology which can reduce the burden of the disease through precision and quality, these personalised treatments are expensive and frontloads the cost involved. Governance of care is an important aspect through which the cost of treatment can be reduced. We have deployed a multi-disciplinary tumor board which reviews all the patient treatments, and the plan of treatment is evaluated against the global standard to prevent recurrence. If the recurrence of the disease is minimalised or managed, it could bring substantial reduction in the cost of cancer care.”

Ramping up insurance

Despite these improvements, one major lag remains in the insurance sector, with India’s current insurance penetration rate standing at 3.42 percent, which is far below the global average of 6.2 percent. Moreover, cancer insurance, being a novel form of coverage, is a relatively new trend in the insurance industry. Even though it aims to mitigate the cost of cancer treatment, the market share is very less.

Rakesh Wadhwa, CMO and EVP – Strategy & Retail Assurance, Future Generali India Life Insurance Company informed, “Insurance works on the fundamental principle of pooling of risk. With pooling of risk comes the effect of economies of scale. A large insured population shall provide an opportunity for providing health care for masses at an affordable cost. A large insured population shall also help health care providers to provide quality health care at multiple locations.” He further suggests, “Considering the population size, economic profile and limitation of healthcare infrastructure, In my opinion, we need a system which is mix of government support and active participation from private healthcare providers.  The government can come with universal health insurance scheme for all citizens covering major critical illnesses. The base level of cover can be provided free for people in economically weaker section of the society. The insurance companies can provide a top-up cover insurance to citizens charging affordable premiums and ensuring quality health care.”

Examining the industry perspective, it is evident that the nation is far from achieving affordability and accessibility when it comes to chronic diseases like cancer. Having said that, we sure are on the path and bringing in cost efficiency, but requires effort from all stakeholders, be it government, hospitals, pharma companies or the insurance sector. Considering India’s vast population, crowdfunding may also soon be identified as one of the key measures that can be put to use manage cost of cancer treatment. Contribution towards building a pool could substantially reduce the economic burden of cancer. With Government aiming to bring down the cost of entire healthcare delivery system and cancer being a major concern on the list, we hope to soon reach the affordable cancer care in India.