Real cost of surgery: what are we missing?

Few will disagree that surgery is expensive. Major surgery costs more than minor surgery, and procedures such as oesophagectomy are very expensive. An oesophagectomy can occupy an operating theatre all day, patients require intensive care support, and major complications are common. In this issue, Browning et al. report the cost of surgery for oesophageal cancer, confirm its high cost, and show that complications increase cost. Their conclusion that minimizing complications will reduce cost is sound. However, the cost of oesophagectomy is not limited to inpatient costs. Other factors contributing to cost include preoperative workup, chemotherapy and/or radiotherapy before or after surgery, and the impact of time off work for patients and carers. In Australia, the Medical Services Advisory Committee requires supporting economic evidence before it will approve new health funding from public money. This requires formal health economic analysis, which generally involves comparing courses of action that integrate cost and outcomes to determine overall value. Different economic analyses might be undertaken, with analyses differing according to the outcome measured. The most common analyses are cost-effectiveness and cost-utility. In cost-effectiveness analysis outcomes are measured in natural units of effect, which are typically clinically focused, for example, the number of cancers prevented by screening. This analysis compares interventions with similar types of effect to maximize efficiency within a fixed budget. Alternatively, cost-utility analysis expresses outcomes as qualityadjusted life years (QALY), a generic outcome that combines the quantity of life (survival) attributed to an intervention and the value (utility) individuals placed on that life. QALYs allow outcomes to be compared across disparate conditions and programmes. Other less common types of analysis are cost minimization, cost consequence, and cost–benefit analysis. The basic steps of economic analysis include identification, measurement, and valuation of (i) costs and (ii) outcomes, and then (iii) comparison of costs and outcomes for the alternatives. The range of included costs and outcomes is determined by the perspective of the analysis. The perspective is determined by ‘who’ is asking the question, and ‘why’—that is, the purpose of the evaluation. Common perspectives include the societal perspective where all costs and outcomes to society are considered, irrespective of who incurs or receives them. This includes the direct cost of receiving care, and the indirect costs incurred by patients and their families in giving and receiving health care. The health system perspective on the other hand includes only direct costs incurred by the health care system such as the cost of a hospital encounter. When considering oesophagectomy, and taking a societal perspective, the direct costs include the costs incurred at the hospital level, as well as diagnostic tests or procedures beforehand and for follow-up, and also any preoperative chemotherapy and/or radiotherapy. Additionally, indirect costs include the cost of transport, lost work hours for patients and their carers, and additional out-of-pocket fees for tests and procedures. In this issue, Browning et al. provide the hospital-level cost associated with the different outcomes following oesophagectomy (with and without complications). This cost analysis is but one component of a full cost-effectiveness/utility analysis. In a previous Australian study that determined health care resource use for oesophageal cancer, Gordon et al. demonstrated that for patients undergoing oesophagectomy for cancer, surgery contributed 66.4% of the treatment cost, with neoadjuvant therapies and workup accounting for the other third. If undertaking a cost-effectiveness analysis to compare different approaches to oesophagectomy (e.g. open vs. thoracoscopic or robotic) or comparing oesophagectomy to non-surgical management with chemoradiotherapy alone, the measurement of outcome is straightforward, and can be a long-term clinical outcome such as survival, or short term outcomes such as length of stay, complications, or readmission. For cost-utility analysis, however, where the outcome measure is a QALY, this requires additional quality of life data to be collected using appropriate multi-attribute utility instruments/ measures (e.g. EQ-5D-5L SF-6D and AQoL-4D). Data for utilities and survival are then combined to calculate the QALY using the quality-adjusted survival analysis (QASA) method. The costs and outcomes of each alternative are summed to generate the total cost and outcomes for each strategy. The ratio of the difference in costs and outcomes is calculated as the incremental cost-effectiveness ratio (ICER). Most cost-effectiveness evidence submitted in Australia applies an ICER threshold of A$50 000 per QALY. Interventions with an ICER below this value are considered cost-effective, and those above are not and may not be supported for public funding. However, no study has assessed the cost-effectiveness of different treatment strategies for the management of oesophageal cancer, including oesophagectomy, in Australia. Browning et al.’s assessment of hospital cost for patients undergoing oesophagectomy is an initial step towards determining the cost-effectiveness of surgery for oesophageal cancer and identifying strategies that might deliver a better outcome. To adequately determine cost-effectiveness, all treatment strategies need to be identified and differences in incremental costs and outcomes between strategies should be compared by calculating the ICER. Costs that are outside the hospital admission for surgery also need to be included. As health care resources are limited, government and health insurers increasingly want to ensure they fund value. As health economic analysis drives the decision-making of funders, surgeons need to engage with health economists to evaluate what we do to better influence this decision-making.