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.

Keywords: Cost; Economics; Hypofractionation; Radiotherapy; Time-driven activity-based costing.