Variable and fixed costs in NHS radiotherapy; consequences for increasing hypo fractionation

Abstract

Background/Purpose

The increased use of hypofractionated radiotherapy changes department activity. While expected to be cost-effective, departments’ fixed costs may impede savings. Understanding radiotherapy’s cost-drivers, to what extent these are fixed and consequences of reducing activity can help to inform reimbursement strategies.

Material/Methods

We estimate the cost of radiotherapy provision, using time-driven activity-based costing, for five bone metastases treatment strategies, in a large NHS provider. We compare these estimations to reimbursement tariff and assess their breakdown by cost types: fixed (buildings), semi-fixed (staff, linear accelerators) and variable (materials) costs. Sensitivity analyses assess the cost-drivers and impact of reducing departmental activity on the costs of remaining treatments, with varying disinvestment assumptions.

Results

The estimated radiotherapy cost for bone metastases ranges from 430.95€ (single fraction) to 4240.76€ (45 Gy in 25#). Provider costs align closely with NHS reimbursement, except for the stereotactic ablative body radiotherapy (SABR) strategy (tariff exceeding by 15.3%). Semi-fixed staff costs account for 28.1–39.7% and fixed/semi-fixed equipment/space costs 38.5–54.8% of provider costs. Departmental activity is the biggest cost-driver; reduction in activity increasing cost, predominantly in fractionated treatments. Decommissioning linear accelerators ameliorates this, although can only be realised at equipment capacity thresholds.

Conclusion

Hypofractionation is less burdensome to patients and long-term offers a cost-efficient mechanism to treat an increasing number of patients within existing capacity. As a large majority of treatment costs are fixed/semi-fixed, disinvestment is complex, within the life expectancy of a linac, imbalances between demand and capacity will result in higher treatment costs. With a per-fraction reimbursement, this may disincentivise delivery of hypofractionated treatments.