CANCER DIAGNOSIS AND TREATMENT: A 2021 PROJECTION.

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1 CANCER DIAGNOSIS AND TREATMENT: A 2021 PROJECTION

2 CONTENTS FOREWORD Foreword 3 Preface 4 1. Executive summary 5 2. Introduction: Cancer in the UK 6 3. Understanding UK cancer incidence rates Estimating cancer incidence rates 8 from 2010 to The cost of cancer The cost of cancer diagnosis 9 and treatment in The NHS The private sector The voluntary sector The cost of cancer diagnosis 13 and treatment in Drivers of cancer cost Projecting the cost of cancer Challenges Finding solutions Conclusion Appendix References 22 All publication references are included on page 22 of the report. Professor Karol Sikora Cancer will affect one in three of us. This means no family is left untouched. This report shows that the costs of providing optimal care in Britain will rise by a staggering 62% over the next decade. Cancer provides huge financial challenges to all health care systems. Ironically, the reasons behind this dramatic increase in costs are a cause for celebration. Cancer is predominantly a disease of older people and because of the advances of modern medicine many more are living in good health well beyond retirement. Indeed there are more people alive in the world over 65 today than have ever reached that age in the past. This demographic is set to continue so cancer incidence will inevitably rise. And when cancer does strike we have powerful new technologies available to gradually turn cancer into a chronic, controllable disease like diabetes. Such innovation has already allowed more people with cancer to live longer so markedly increasing the prevalence of the disease in the population. But the rising numbers and the advent of innovation comes with a hefty price tag. Surgery to remove primary tumours coupled with precise imaging has minimised the extent of damage to surrounding normal tissue. The increasing use of robotics and keyhole devices means that long stays in hospital are no longer necessary. Radiotherapy has been revolutionised by a combination of sophisticated imaging and computer driven planning systems which can contour a tumour accurately. Intensity modulated radiotherapy (IMRT) and image guidance (IGRT) with each treatment to ensure correct delivery, is becoming standard practice for treatments aimed to cure. In addition, the molecular revolution has brought an incredible pipeline of new drugs which target receptors and their downstream signalling pathways the molecular cogs that go wrong leading to the abnormal growth patterns that characterise a cancer cell. The era of personalised medicine was heralded by the use of herceptin in breast cancer a decade ago. There are now 700 targeted drugs in the global clinical trial pipeline many with companion diagnostics to guide patient selection. But, over the last six months the average monthly cost of each of the eight cancer drugs approved in the United States was over $10,000. If this trend continues it could bankrupt the healthcare systems of rich countries and never be affordable by the poor. Ultimately there are only three ways to pay for healthcare tax, insurance or cash. Being honest and consistent about what s available from each to a patient and ensuring equitable access is crucial. Inequity abounds less than 15% of radical radiotherapy in Britain is delivered using precise techniques and our new cancer drug spend is still only half that of our near neighbours. As the report states, the challenge is clear. We need to invest more in cancer services. Getting the right treatment to the right patient using new diagnostics will increase the cost effectiveness of our care. Increased efficiency by better utilization of expensive equipment, targeting expensive drugs to those that will really get benefit and keeping patients out of hospital has to be part of our plan. We need to develop further the excellent work of the major cancer charities to make it easier for people to navigate their cancer treatment by making informed choices at every step of the way. Public, private and voluntary providers and payers working together have a vital role in developing innovative strategies to drive access, quality and value for all. Public education on healthy lifestyle change has never been more important to reduce the burden of disease. This report provides an extremely useful scaffold on which to build future strategies to ensure timely and optimal cancer care. Karol Sikora is a Consultant Oncologist at Hammersmith Hospital and Medical Director of Cancer Partners UK. He was formerly Director of the WHO Cancer Programme. Bupa 2011 Research carried out for Bupa by Laing & Buisson 2 3

3 PREFACE 1. Executive Summary Dr Natalie-Jane Macdonald, Managing Director, Bupa Health and Wellbeing People regularly tell us that cancer is one of their greatest health fears. This is probably because few conditions have such a significant impact on the lives of both the person diagnosed with cancer and of those who are close to them. As this report shows, the increase in incidence of cancer in the UK is set to continue apace, mainly driven by our ageing society. However, much work is underway in all of the different sectors involved public, private and voluntary to improve how we reduce the incidence of cancer and improve the health outcomes for those who have cancer. This work has successfully improved survival rates in recent years, in part due to innovations in the products and services that we all use to diagnose and treat cancer. Such innovation can only ever be a good thing for patients, but the pressures it places on increasingly stretched resources will also continue to increase. To provide a complete picture of how the cost of treating cancer is set to change in the UK, this report calculates the total cost of cancer diagnosis and treatment in the UK now and in a decade s time. Having been experts in healthcare for over sixty years, Bupa has extensive experience of helping people who have been diagnosed with cancer, who are receiving treatment for it and who are dealing with the after-effects of it. Looking at the cost of cancer over the next decade is important because, for all of us involved in healthcare, innovation will be necessary. Dr Natalie-Jane Macdonald, Managing Director, Bupa Health and Wellbeing Based on the most recently available data, we calculate that 318,000 people were diagnosed with some form of cancer in the UK in This figure equates to an incidence rate of 1 case per 195 people. The total cost of cancer diagnosis and treatment in the UK, incorporating the NHS, the private sector and the voluntary sector, i is estimated at 9.4billion in 2010, the equivalent of an average of 30,000 per person diagnosed with cancer in the UK. The UK s ageing population is likely to see the number of new cancer cases rise by 20% from a level of 318,000 cases per year in 2010 to 383,000 cases per year in Rising incidence levels will increase demand for cancer diagnosis and treatment. This increase, combined with advances in technologies and treatments mean that the total cost to the NHS, the private sector and the voluntary sector for diagnosing and treating cancer is projected to be almost 15.3billion in This figure is the equivalent of an average of 40,000 per person diagnosed with cancer in the UK. Meeting this projection will require a real terms growth of 5.9billion in the UK s overall spending on cancer diagnosis and treatment by 2021, representing a 62% increase on the 2010/11 baseline. In order to meet this increase; o The NHS will need an additional budget of 5.2billion a 65% increase. o The private sector will need an additional 531million also a 65% increase. If we do not address the rising cost of cancer, we are unlikely to be able to afford the desired and expected level of cancer diagnosis and treatment over the next 10 years and beyond. This possibility will mean that the UK s cancer survival rate could fall further behind that of other developed countries. The challenge is clear whilst new resources will need to be directed towards meeting the future cost of cancer diagnosis and treatment in the UK, we also need to find ways to use the resources we have more efficiently. In particular, we need to: I. Find new ways to address the cost of tests and treatments for cancer. II. Change how and where we treat cancer patients and survivors. III. Make it easier for people to navigate their cancer treatment options. o The voluntary sector will need an additional 131million a 22% increase (this percentage is lower as the voluntary sector is not subject to the same technology and treatment costs as the NHS and private sector). i Throughout this report, the term voluntary sector refers to voluntary contributions to independent sector hospices, the vast majority of which are spent on cancer services and in particular, palliative care. 4 5

4 2. Introduction: cancer in the UK 3. Understanding UK cancer incidence rates This report seeks to answer the question of how our health system including the public, private and voluntary sectors will be able to meet the cost of cancer over the next decade. With one in three people developing cancer at some point in their lives 1, this report brings together data from each of these sectors to calculate the current cost of cancer diagnosis and treatment in the UK and projects what that cost is likely to be 10 years from now. In order to make this projection, we have focused solely on cancer diagnosis and treatment costs. For the purpose of this report, cancer diagnosis and treatment is defined as including publicly and privately paid primary, secondary, tertiary and palliative healthcare services delivered by public, private and voluntary sector providers. In addition to figures published by the UK s National Health Service (NHS), we have used claims data from Bupa, as the UK s largest health insurer, and data from the voluntary sector to calculate the total amount that the UK currently spends on diagnosing and treating cancer. We have also projected the cost forward to calculate the total the UK is likely to spend in In order to provide an accurate picture of the current and future cost of cancer, it is important to establish the current incidence rates in the UK. A cancer incidence rate can be defined as the number of new cancer cases occurring in a specified population during a year. Cancer incidence in the UK has increased by more than a quarter (almost 28%) since the 1970s. There was a substantial rise in UK cancer incidence rates between the 1970s 2 and the 1990s but since then rates have stabilised in the first decade of this century, most likely due to improvements in prevention, diagnosis and treatment. It is worth noting that men are more likely to be diagnosed with cancer than women at any given age. ii Figure 1 below highlights the different incidence rates of the 10 most common cancers in the UK. 3 The graph shows that the type of cancer most likely to affect men is prostate cancer, with 37,051 newly diagnosed cases in For women, breast cancer is the most prevalent with 47,693 newly diagnosed cases in The graph also demonstrates how trends in incidence rates for individual cancers are highly variable, with significant progress having been made in reducing incidence of some cancers whilst others have clearly risen dramatically. For instance, over the last 10 years incidences of: Male prostate cancer increased by 36% whilst male bladder cancer decreased by 30% Female malignant melanoma increased by 54% whilst female bladder cancer decreased by 29% Figure 1. The 10 Most Common Cancers, UK Percentage Change IN Average Incidence Rates, and Finally, the report considers the challenges that all three sectors face in responding to these pressures and proposes recommendations that will help to position our healthcare system to better respond to these challenges over the next decade. ii While the difference in cancer incidence rates between men and women appears to be fairly evenly balanced, when the longer life expectancy of women is factored in, males are found to be significantly more likely to be diagnosed with cancer at any given age. 6 7

5 4. The cost of cancer 3.1. Estimating cancer incidence rates from 2010 to 2021 In this section, we seek to establish UK cancer incidence rates from 2010 to Taking all cancers together, we have conservatively assumed, for the purposes of forward projection, that incidence rates for all age, socio-economic and gender groups will remain broadly unchanged over the next 10 years. However, because cancers occur more frequently amongst older people, the UK s ageing population is likely to lead to an increase in the incidence of cancer as people live longer and are more likely to develop health problems in old age. We have calculated the likely growth of incidence by using the UK s official population growth figures, set against incidence rates across all age groups over the next 10 years. On these assumptions, the number of new cancer cases in 2010 was 318,000. This figure equates to an incidence rate of 1 case per 195 people. The UK s cancer incidence can be expected to increase by almost 2% per year, or an aggregate of 20% over the 10 year period from 2010 to 2021 (See Figure 2). This projection means the UK will face 383,000 new cancer cases in 2021, equating to an incidence rate of 1 case per 175 people The cost of cancer diagnosis and treatment in 2010 This report reveals the complete picture of the cost of cancer diagnosis and treatment in the UK. In order to calculate this, we have included privately funded cancer diagnosis and treatment and the contribution of the voluntary sector, in addition to the overwhelming majority of costs paid for by the NHS. Figure 3. estimated costs of cancer diagnosis and treatment UK 2010 For the purposes of this report, we define cancer diagnosis and treatment as including publicly and privately paid primary, secondary, tertiary and palliative healthcare services delivered by public, private and voluntary sector providers. This figure does not include alternative therapies nor does it include the indirect or human capital costs of cancer generated by sickness absence or premature mortality. Figure 2. Projected numbers of newly diagnosed cases of cancer, excluding non-melanoma skin cancer, iii UK % 400, ,000 Treatment costs 2010 ( millions) NHS 7,992 PRIVATE 818 VOLUNTARY , As detailed in Figure 3, the total cost of cancer diagnosis and treatment in the UK is estimated at 9.4billion in TOTAL 9,412 As shown in Figure 3, the bulk of diagnosis and treatment costs, at just under 8billion is funded by the NHS. By 2021, the UK is expected to face 383,000 new cancer cases per year 818million, a little below 9% of the total, is funded privately, mainly by health insurance and other medical expenses schemes, with a small contribution from self-payment out of patients own pockets. iii It is common for non-melanoma skin cancers to be excluded from cancer statistics primarily because of a lack of data due to the majority of cases being treated at GP surgeries or on an out-patient basis. The remaining 602million is raised from voluntary contributions to independent sector hospices, the vast majority of which is spent on cancer services, and in particular palliative care. 8 9

6 The NHS As shown in Figure 3, the NHS funds just under 85% of cancer diagnosis and treatment in the UK. Whilst the NHS does not provide a routine breakdown of its spending on cancer, a breakdown for the year 2005/06 was estimated in the 2007 Cancer Reform Strategy. 4 (See Figure 4). The NHS spends the largest proportion of its cancer budget on in-patient costs (27%), which includes accommodation, food and basic care. This is followed by surgery (22%) and drugs (18%). Radiotherapy makes up 5% of overall cancer expenditure. Figure 4. estimated NHS expenditure on components of cancer diagnosis and treatment Figure 5. NHS spending on cancer as a proportion of spending allocated to diseases in the Department of Health Programme Budget for England 2003/ /10 Area of spend % 7.5% In-patient costs (excluding surgery) 27% 799m 7.0% Surgery (including inpatient and day case stays) 22% 400m 400m 2,158m 6.5% Drugs (including preparation and administration) Outpatients (including diagnostics) 18% 8% 400m Estimated UK expenditure million % 2003/ / / / / / /10 Screening 5% Radiotherapy 5% Specialist palliative care (exc. voluntary hospices) Other (including GP and community health services) 5% 10% 639m 1,439m 1,758m In England, the NHS budget allocated to diseases grew from 47billion in 2003/04 to 75billion in 2009/10. While UK-wide data is unavailable, Figure 5 illustrates that between 2003/04 and 2009/10 cancer absorbed an increasing share of NHS expenditure in England, growing from 6.8% of all spending allocated to diseases in 2003/04 to 7.3% in 2009/10. iv These increases occurred at a time when NHS spending was growing at a historically unprecedented rate, 5 however increases of this level are unlikely to be funded in the next decade. 6 The NHS funds just under 85% of cancer diagnosis and treatment in the UK iv It is worth noting that between 2003 and 2009, classification of cancer expenditure became more accurate and this could potentially account for some of the difference in recorded levels of spend over this period

7 The private sector As detailed in Figure 3, the private sector funds 8.7% of cancer diagnosis and treatment in the UK. As in the public system, the share of resources absorbed by cancer has also been rising in the private sector. According to Bupa s own spending data, in 2010 cancer accounted for 16.3% of total spending, an increase from 14.4% in 2005/06. This increase has occurred at more than twice the rate of all other areas of healthcare spend for Bupa insured customers. The largest percentage of cancer spend and the largest driver of increasing spend in this sector over the past 10 years has been cancer drugs. The role of cancer charities in improving cancer diagnosis and treatment According to the Association of Medical Research Charities, charities spent 935million on medical and health research in the UK in 2008/09. 7 Cancer absorbed a third (33%) of this budget and was the largest single recipient of charitable research money; cancer also received 39% of funds allocated to general research. This research, while of significant benefit to cancer patients and their families, is difficult to quantify for the purpose of this report, which focuses on UK cancer diagnosis and treatment costs. More difficult still, is to determine the proportion of the combined budget that cancer charities spend on cancer treatment and diagnosis through support services which are often provided in partnership with the NHS. These include; expert nursing, medical care and emotional/ practical support from the point of diagnosis onwards The voluntary sector The voluntary sector makes a significant contribution to the funding of cancer services through medical research, hospices, social care and general support services for cancer patients and their families. Since we have confined our analysis in the body of this report to diagnosis and treatment costs, spending on medical research is not included in Figure 3. The only voluntary sector item which is included in Figure 3 is the cost of palliative care provided in partnership with the NHS, which is estimated to have been 602million in Macmillan for example uses a significant proportion of its c 135million income to promote the development of cancer services within the NHS. It does this by pump priming or grant aiding the introduction of supportive and innovative forms of care and other facilities, as well as clinical, educational, academic and research-based activities designed to achieve advances and improvements in the range, level and standards of care available to patients. Since we have confined our analysis specifically to cancer diagnosis and treatment costs, beyond the role of hospices in providing palliative care, we have not quantified the role of cancer charities in our projections. However, their important role has undeniably helped to develop better ways of identifying and treating cancer in the UK The cost of cancer diagnosis and treatment in Drivers of cancer cost As detailed in Section 3, the increase in the number of new cancer cases over the next decade will be the main driver for growing underlying demand for cancer diagnosis and treatment in the UK. However, there are three main factors that will influence the growth in costs associated with increased incidence rates: New treatments and technologies New medical technology is one of the principal drivers of cost in healthcare in the UK and across the world. Some technologies such as new drugs and treatments have the potential to reduce treatment costs overall. However, past experience has shown that in practice they have a tendency to increase costs as a consequence of associated research and development, production and testing timelines. In the case of cancer, innovation may include new approaches to early detection, the use of established drugs for new indications, new surgical devices, new methods to deliver radiation treatments and new technologies to diagnose and monitor patients. However, of all the new developments, drugs have experienced the greatest growth in the last decade, due to the increase in the number of cancer drugs that have been approved. We have also witnessed the development of a new wave of treatments which are often referred to as personalised medicines. The cornerstones of personalised medicines are innovations which are designed to target at a molecular level. Personalised medicines require a companion diagnostic test which identifies the specific nature of a tumour. These results can be used to help patients and their consultants make more informed decisions about the best course of treatment on a case by case basis. Personalised medicines are already becoming a reality in the UK and their introduction is being supported by initiatives such as Cancer Research UK s Stratified Medicine Programme. 8 However, there is currently much debate about how to determine cost effectiveness, when to test patients and how best to develop the infrastructure to support the widespread introduction of personalised medicines in the UK. While still at an early stage of development, this area of intensive activity is likely to give rise to an important funding challenge for cancer diagnosis and treatment over the next decade. An example of personalised medicines in practice - Oncotype DX Available privately in the UK since 2010, Oncotype DX involves extracting RNA (part of the genomic make-up of cells) from a sample of a woman s breast tumour and analysing the activity of 21 genes controlling the behaviour of cancer cells. It provides a recurrence score, which indicates how likely the cancer is to return within 10 years of the initial diagnosis, with the risk being graded as low, intermediate or high. It also calculates how likely an individual is to benefit from chemotherapy following surgery. For Bupa members, Oncotype DX has already proved useful in helping consultants and their patients to determine the likely impact of chemotherapy and therefore whether to undergo treatment. In most cases, where the test has shown that chemotherapy is likely to have minimal effect, patients have opted not to proceed with chemotherapy and have avoided unnecessary interventions. This results in reduced overall treatment spend and an improved experience for patients

8 Access to established treatments The UK benefits from a comprehensive, publicly funded healthcare system. However, there is evidence from Cancer Research UK that some treatments such as radiotherapy are less readily available in some parts of the UK than others. 9 The success of radiotherapy varies from patient to patient and it has been estimated that around 52% of cancer patients are likely to benefit from this form of treatment. Yet in 2005, only 38.2% of cancer patients in the UK were treated using radiotherapy. 10 The government has committed to investing in increasing the UK s radiotherapy capacity and to expand the use of complex radiotherapy treatment. 11 While this increase is likely to have a positive impact on outcomes for cancer patients in the UK, it remains a potential driver of costs in the future. A planned increase in private provision of radiotherapy is expected to increase capacity and related costs for the private sector as well. Public demand Neither the government nor clinicians decide on healthcare priorities and affordability in a vacuum. The general public, spurred on by increasing coverage of healthcare in the media, has undoubtedly become more demanding in recent years. In the new digital age, this trend is likely to continue. Cancer has generated the most intense and specific pressure for additional resources, as reflected in the safety valves that have been put in place. Safety values such as exceptional case review processes and, now, the Cancer Drugs Fund often result in greater proportions of public spending being directed towards cancer Projecting the cost of cancer Projections of the future costs of cancer are necessarily constrained by a number of factors: Uncertainty regarding what will emerge from the research and development pipeline for new diagnostic and treatment methods; What is seen as affordable by public and private purchasers; and How successful funders of healthcare will be in containing costs. We have therefore used the following assumptions to project real term costs for the next 10 years: i) incidence will increase due to the ageing population in Section 3, we have predicted that demand for cancer diagnosis and treatment will increase at a rate of 2% year on year. ii) Technologies and treatments incorporating the drivers of cost listed in Section 4.2.1, we have calculated the effect that new technologies and treatments for cancer have had on healthcare budgets over the last five years and used this to estimate the likely real terms increase in cost that will be experienced over the next decade. We have calculated this residual technologies and treatments factor as having added just under 3.7% per annum to real terms costs over the period 2003/04 to 2010/11 and we have assumed that this rate of increase will continue to apply over the next 10 years. Figure 6. Projections of spending on cancer diagnosis and treatment from 2010 to ,000 15,000 ( MILLIONS) 10,000 5, / / / / / / / / / / /21 SECTOR NHS Private Voluntary 14 15

9 5. Challenges The 10-year forward projections in treatment costs are illustrated in Figure 6 and include a breakdown of the additional resources required for the NHS, private and voluntary sectors. The projections indicate that by 2021, the total cost to the NHS, the private sector and the voluntary sector for treating cancer will be just under 15.3billion. This represents a real terms growth of 5.9billion in the UK s overall spending on cancer diagnosis and treatment by 2021, representing a 62% increase on the 2010/11 baseline (See Figure 7). In order to meet this increase; The NHS will need an additional budget of 5.2billion a 65% increase. The private sector will need an additional 531million also a 65% increase. The voluntary sector will need an additional 131million a 22% increase (this percentage is lower, as the voluntary sector is not subject to the same technology and treatment costs as the NHS and private sector). Figure 7. PRojected increase in cancer diagnosis and treatment spend for all sectors from 2010 to 2021 Treatment costs in 2010 ( millions) Treatment costs in 2021 ( millions) NHS 7,992 13,191 65% Private 818 1,349 65% Voluntary % TOTAL 9,412 15,273 62% Percentage increase (%) The NHS A massive improvement in efficiency will have to be achieved in order for NHS cancer services to keep pace with demographic pressure (2% per annum growth in cancer incidence rates) and/or pay for new drugs and other medical innovations. Cancer services are not alone in facing this challenge; the NHS Chief Executive s target for the NHS in England is to make a cumulative 20billion in efficiency savings over the period 2010/11 to 2014/15. By 2021, we have estimated that the NHS will need to increase its cancer diagnosis and treatment budget by 65% in order to cover increasing costs. However, the Autumn 2010 Comprehensive Spending Review included the provision for a real terms increase in NHS spending of just 0.4% up to With the UK coalition government reaffirming its commitment to eliminate the UK budget deficit by , any further significant budgetary increases for the health service over this period are unlikely. In order to provide increased provision for cancer, in late 2010, the UK government also announced the creation of a Cancer Drugs Fund. 14 At its launch, the government committed an interim fund of 50million to pay for cancer drugs that are not routinely funded by the NHS. This initial amount has been followed by a 200million fund (per year for three years) commencing in April 2011, however there are currently no plans to extend the Fund beyond The private sector In the private sector, insurers face the similar problem of balancing rising medical inflation with a need to keep premiums as affordable as possible for corporate and individual customers. A report published by Mercer in 2010 assessed corporate health insurance provision and found that rising medical inflation has resulted in the cost of providing healthcare and health-related benefits to employees rising by 4.9% in 2010, on top of rises of 6% in 2009 and 10% in Historically, over several decades, health insurance customers both companies and individuals - have been willing to continue to pay for health insurance despite medical inflation costs running higher than general economy inflation. However, the 2008 recession led to a reduction in health insurance coverage and demand may continue to be fragile until economic conditions improve. Looking forward over the next 10 years, there is the potential for health insurance to contribute a larger share of overall health spending, for cancer and other treatments. However, this possibility depends on a return to economic growth in the short to medium term. The voluntary sector Even though the additional funding requirement will be lower for the voluntary sector than for the private sector or the NHS, voluntary bodies which are dependent on contributions from members of the public will be hard pressed to achieve real terms growth in resources. Particularly over the next three to four years when disposable income growth is expected to be muted at best. Over the next decade, it is estimated that we will need an extra 5.9billion to fund cancer diagnosis and treatment 16 17

10 6. Finding Solutions 7. Conclusion The challenge laid out by the analysis in this report identifies a need for an increase in resources as well as to find new approaches to meet the future cost of cancer in the UK. Below are three approaches which could help address the challenge: I. Find new ways to address the cost of tests and treatments for cancer ensure better national planning for availability of new drugs and technology: More focus should be given to establishing guidelines to determine which of the growing number of new technologies for the detection and treatment of cancer should become generally available. Planning at a national level regarding the introduction and effective pricing of new tests, drugs and technology will be critical to success. integrate companion tests for personalised medicines into care pathways: The success of personalised medicines will depend on timely decisions about the effectiveness of the companion tests which help to determine whether a given treatment is likely to be effective for a given individual. As a greater number of companion tests are developed, they should be made available at a reasonable cost and integrated into the overall diagnostic and treatment pathways at the national and local provider level. Find new ways to bring cancer drugs to market: The government s longer term plan to meet the cost of cancer drugs is to use valuebased pricing of branded drugs. Pending the establishment of this scheme, the government should be open to industry risk-sharing approaches and acceptance of responsibility for outcomes by pharmaceutical companies. II. Change how and where we treat cancer patients and survivors Make out-of-hospital care a standard choice for patients when clinically appropriate: There are a number of opportunities for cancer treatment to be provided more efficiently, these can include: reducing unnecessary emergency admissions, reducing hospital in-patient stays and increasing access to out-of-hospital care. Out-of-hospital treatment such as home chemotherapy has been found to be as safe as hospital based chemotherapy, with high levels of patient satisfaction. 16 Home healthcare for cancer services has grown rapidly from a small base in recent years, stimulated in part by a VAT advantage, but its use remains patchy across the UK. v Out-of-hospital alternatives such as home chemotherapy should be made a standard choice for patients undergoing both public and private cancer treatment. enable patients to manage their follow-up appointments: Follow-up appointments for cancer survivors are likely to be more beneficial if better tailored to people s individual needs. vi Follow-up appointments in the UK are currently set at regular intervals, which is not an appropriate model for all cancer survivors and can be an inefficient way to monitor for changes. Whilst it might appear a small change, by enabling patients to manage their own follow-up care through information provision and support, commissioners can expect better patient outcomes and improved patient experiences while helping to reduce overall healthcare spend. III. Make it easier for people to navigate their cancer treatment options This report has shown that the UK s ageing population and advances in cancer diagnosis and treatment are likely to increase the cost of cancer over the next decade. This increase amounts to 5.9billion by 2021, a 62% increase on the 2010/11 baseline. In order to maintain or improve cancer outcomes, the public, private and voluntary sectors need to find new resources and to reassess how and where cancer patients can best be treated, to ensure that the available resources are spent in ways that can improve outcomes more efficiently. The awareness of the steep potential increase in the costs associated with diagnosing and treating cancer over the next decade should drive action; at a national level to plan and manage the introduction of new technologies and treatments, at a local level to provide access to alternative settings of care and at an individual level to empower patients to take an increased role in managing their own care. enable patients to transfer between public and private facilities more easily: Since 2008, NHS patients who choose to top-up their healthcare by paying for private treatment alongside their NHS treatment have been able to do so. However, while some top-up products have emerged, the challenge of coordinating care across private and NHS provision has held back their development. Representatives from the public and private sector should work together to help develop new processes and systems that better coordinate the care of cancer patients between NHS and private treatment facilities. v vi vat regulations mean that the NHS pays VAT on drugs administered in hospitals, but drugs administered in people s own homes are zero-rated. The National Cancer Survivorship Initiative (NCSI) has developed a risk stratification process which helps to better identify which care pathway is most suitable for each cancer survivor, based on the level of risk associated with the disease, the treatment and the patient s ability to manage, and therefore what level of professional involvement will be required

11 8. APPENDIX Methodology Bupa commissioned Laing & Buisson to establish the current cost of cancer diagnosis and treatment in the UK and to provide an estimate of how much cancer diagnosis and treatment is likely to cost by Uniquely, this report analyses the combined spending on cancer diagnosis and treatment from the public, private and voluntary sectors to create a complete picture of current and future cancer costs in the UK. The report also considers the possible ways that these costs may be managed and met in the future. It is beyond the scope of this report to discuss in detail the many exciting innovations that promise at a cost to revolutionise cancer diagnosis and treatment. In addition, the report does not attempt to quantify the costs associated with cancer, such as medical research, support services, social care and lost productivity from illness or premature death. Rather, the report focuses solely on cancer diagnosis and treatment costs. Calculating cancer incidence rates in 2010 and 2021 The latest available statistics show that 309,000 people were diagnosed with cancer in the UK in This equates to an incidence rate of 504 cases per 100,000 people. 17 We have therefore calculated the growth of incidence by using the UK s official population growth figures 18, set against current incidence rates across all ages. The findings in this report are broadly consistent with the projections of a recent report commissioned by Cancer Research UK. 19 Calculating the cost of cancer diagnosis and treatment from 2010 to 2021 We have based our projections of real terms costs of cancer diagnosis and treatment over the next 10 years on the following assumptions: i) incidence will increase due to the ageing population using the calculation above, we have estimated that demand for cancer diagnosis and treatment will increase at a rate of 2% year on year. ii) Technologies and treatments incorporating the drivers of cost listed in Section 4.2.1, we have calculated the effect that new technologies and treatments for cancer have had on healthcare budgets over the last five years and used this to estimate the actual real terms increase in cost that will be experienced over the next decade. We have calculated this residual technologies and treatments factor as having added 3.7% per annum to real terms costs over the period 2003/04 to 2010/11. This represents a residual factor after deducting demographic change (+2% per annum) and price inflation (+3.2% per annum) from the average 8.9% per annum increase in cancer costs at current prices over the period. We have assumed that this rate of increase of 3.7% per annum will continue to apply over the next 10 years. Figure 8. Projections of cancer diagnosis and treatment spend year on year from 2010/11 to 2020/21 These estimates are broadly consistent with those in a research paper published by Policy Exchange. 20 However, the Policy Exchange paper also includes the indirect human capital costs of absence from work and premature mortality due to cancer in the UK. It does not, however, include privately funded cancer treatment. Projection graphs o Figure 2: Projected numbers of newly diagnosed cases of cancer, excluding nonmelanoma skin cancer, UK These projections were calculated by applying age specific cancer incidence rates from Cancer Research UK to the Office for National Statistics 2008 principal projection of UK population by five year age band. o Figure 3: Estimated costs of cancer diagnosis and treatment, UK 2010 NHS spend was calculated using the Department of Health programme budgeting figure of 5.86billion for England 2009/10 21 and was adjusted to include estimate of GP costs pro rata with other expenditure heads, extrapolated to 2010/11 and further extrapolated to UK population. Cost of cancer diagnosis and treatment ( millions) YEAR 2010/ / / /4 2014/ / / / / / /21 NHS 7,992 8,444 8,910 9,389 9,884 10,394 10,920 11,462 12,021 12,597 13,191 Voluntary PRIVATE ,011 1,063 1,117 1,172 1,230 1,289 1,349 TOTAL 9,412 9,922 10,447 10,987 11,546 12,121 12,714 13,325 13,956 14,605 15,273 Private sector spend was estimated from data provided by Bupa (which has over 40% of the UK health insurance market) combined with Laing & Buisson market information. Private sector spending includes private funding from UK medical insurance and other medical expenses schemes and private self-payment. In the absence of the availability of other private health insurers information, in this report we have taken Bupa spending statistics as representative of the UK health insurance market. Voluntary sector (hospice) spend was estimated by using National Audit Office 22 research which found that expenditure by independent sector hospices in England was 500million in 2006/07. This figure has been reduced by 26% to exclude double counting from PCT payments to hospices, extrapolated to the UK pro rata with population and projected forward to o Figure 4: Estimated NHS expenditure on components of cancer diagnosis and treatment The cost of cancer as a percentage of NHS overall spending was taken from the Cancer Reform Strategy This is the most recent estimation as the breakdown was not included in the Strategy for Cancer report published in The estimated NHS expenditure on cancer in 2010 was calculated by applying these percentages to the total NHS spend on cancer diagnosis and treatment as per our estimates detailed above

12 9. REFERENCES 1 Sasieni PD, Shelton J, Ormiston-Smith N, Thomson CS, Silcocks PB. What is the lifetime risk of developing cancer?: The effect of adjusting for multiple primaries. British Journal of Cancer 2011; 105(3): p Cancer Research UK. The Lifetime Risk of Cancer, Great Britain, cancerresearchuk.org/cancerstats/incidence/risk/ 3 Cancer Research UK. Cancer incidence for common cancers - UK statistics cancerresearchuk.org/cancerstats/incidence/ commoncancers/ 4 Department of Health. Cancer Reform Strategy, 2007: p en/publicationsandstatistics/publications/ PublicationsPolicyAndGuidance/DH_ Department of Health. Programme Budgeting estimated England level gross expenditure for all programmes and subcategories for all years collected, 2003/ /10 uk/prod_consum_dh/groups/dh_digitalassets/@ dh/@en/documents/digitalasset/dh_ xls 6 HM Treasury. Spending Review, October completereport.pdf 7 Association of Medical Research Charities. Challenge for Government, May Cancer Research UK. Stratified Medicine Programme, accessed June cancerresearchuk.org/research/research-strategy/ our-progress/stratified-medicine-programme/ 9 Cancer Research UK. Achieving a world class radiotherapy service across the UK, July Catherine Foot and Tony Harrison. Kings Fund and Cancer Research UK, How to improve cancer survival: Explaining England s relatively poor rates, Report to ministers from National Radiotherapy Advisory Group, Department of Health. Radiotherapy: Developing a world class service for England, HM Treasury. Spending Review, October completereport.pdf 13 HM Treasury. Autumn Statement, November pdf 14 Department of Health. The Cancer Drugs Fund: Guidance to support operation of the Cancer Drugs Fund in , 24th March Mercer. Pan-European Employers Health Benefits Issues Survey, Bazian. Bazian Review, Chemotherapy at Home, Commissioned by Bupa, Cancer Research UK. All Malignant Neoplasms Excluding Non-Melanoma Skin Cancer, Number of New Cases, Crude and European Age- Standardised Incidence Rates per 100,000 Population, UK, org/cancerstats/incidence/all-cancers-combined/ 18 Office for National Statistics. National population projections, population/population-change/populationprojections/index.html 19 Mistry M, Parkin DM, Ahmad AS and Sasieni P. Cancer incidence in the United Kingdom: projections to the year British Journal of Cancer 2011;105:p Henry Featherstone & Lilly Whitham. Policy Exchange, The Cost of Cancer: research note February Department of Health. Programme Budgeting estimated England level gross expenditure for all programmes and subcategories for all years collected, 2003/ /10 uk/prod_consum_dh/groups/dh_digitalassets/@ dh/@en/documents/digitalasset/dh_ xls 22 National Audit Office, End of Life Care, The Stationery Office, Department of Health. Improving Outcomes: A Strategy for Cancer, January

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