The Economics of Kidney Failure By Yves Rabeau PhD (MIT) Associate Professor Management Sciences, UQAM for The Kidney Foundation of Canada Quebec

Transcription

1 By Yves Rabeau PhD (MIT) Associate Professor Management Sciences, UQAM for The Kidney Foundation of Canada Quebec Branch Final version November 2, 2012

2 By Yves Rabeau PhD (MIT) 1 Associate Professor Management Sciences, UQAM for The Kidney Foundation of Canada Quebec Branch Summary of key points As populations in the West age and the incidence of diabetes increases, kidney failure is also on the rise. At the same time we are also seeing an increase in the number of visits to nephrologists offices. In addition to hindering the progression of kidney disease, this trend has led to a levelling-off in the number of new kidney failure cases. Whereas the cost of treatment in absolute terms varies between countries, an international comparison of dialysis and kidney transplantation costs has demonstrated that transplants are significantly more economical than dialysis. Kidney transplants cost the healthcare system less, thus freeing up resources that can be put to better use elsewhere within the system. In Quebec, the public healthcare system could save $53,000 per kidney patient per year for the entire lifespan of the transplanted organ. If each of the 1,000 Quebecers currently awaiting a kidney were to receive one from a living donor, the recurrent savings to the healthcare system would be on the order of $53 million per year; over 10 years, costs of some $530 million would be avoided. Once transplanted, kidneys received from living donors tend to survive longer than those from deceased donors. Unfortunately, living donors face a range of expenses that can act as a barrier to donating a kidney. To facilitate and encourage organ donation, the healthcare system needs to cover these expenses. In addition to paying for pre-operatory medical exams and the like, donors may incur costs for travel and accommodation, hospital fees, post-operatory treatments and medications that are not covered by the public healthcare system. In Quebec, most if not all hospital and medication costs are covered by the public system. However, for healthy donors who are active in the workforce, one of the greatest costs incurred is that of income lost during the preop, operatory and post-op recovery period. In Quebec, the hospitalization and recovery period for donors is two months long on average. As such, if donating a kidney requires employees to take a two-month leave of absence, the healthcare system should reimburse donors for salary and benefits lost during that leave. In Quebec, the percentage of transplants involving living donors is low, amounting to less than 20% of transplants, whereas the rate in the rest of Canada is closer to 50%. Clearly, the province has some catching up to do. While the causal relationship between knowing you would be reimbursed for some of the costs involved if you were to donate a kidney and actually deciding to donate has yet to be clearly established, Quebec already reimburses some of the costs incurred by 1 The author wishes to thank Dr. Michel Pâquet, nephrologist at CHUM s Notre-Dame Hospital and Chairman of The Kidney Foundation of Canada s Organ Donation Committee for his invaluable contribution to medical-related questions that appear in the report. 1

3 donors nonetheless. Moreover, the healthcare system needs to do more to promote organ donation upon death. In late 2010, British-Columbia, Manitoba, Ontario and Quebec all implemented a Living Organ Donor Expense Reimbursement Program (LODERP). In Quebec, the program compensates donors for their organ donation by allowing them to submit a reimbursement claim for expenses and lost revenue, subject to eligibility criteria. Expenses covered by the program include costs for travel, accommodation, meals, parking and loss of revenue, up to a maximum eligible reimbursement of $5,715. Moreover, compensation for lost revenue may be requested only once all the donor s other revenue sources have been exhausted vacation, sick days, disability leave and so on. This clause is too restrictive: the reimbursement to compensate for lost revenue should always be provided except in cases where the employer agrees to pay the donor s full salary during the entire intervention period. In fact, reimbursing donors for expenses places minimal strain on the healthcare system, especially in comparison to the relative gains to be made; such a program should therefore not be difficult to fund. Over one year, 100 donors would be reimbursed approximately $600,000 in total; at the same time, the healthcare system would save $5.3 million in costs. In addition to seeing their quality of life increase significantly, donors can return to living a normal life and contributing fully to the economy. In the current context of continuing labour shortages, every experienced worker who returns to his or her job is an invaluable asset to the economy. In the end, this ability to contribute to the workforce brings added value to the economy as a whole. The salary that transplant recipients receive is their contribution to the economy s GDP. The contribution of employees may even be outdone by business owners who are transplant recipients assuming of course that their businesses are profitable as they will return to contributing to both the GDP and to employment numbers as well as investing in their businesses. As an example, the average annual salary for an employee, including benefits, is around $50,000. An estimate based on all the kidney transplants carried out at CHUM in 2010 indicates that approximately 50% of patients who received a transplant were working again within two years. If 1,000 patients unable to work because of kidney failure were to receive a kidney transplant and subsequently return to work full-time, the additional contribution to the GDP related to these jobs would be $50 million. These gains would extend over the 18- to 19- year lifespan of a transplanted kidney from a living donor, this in comparison to 12 years for a deceased donor kidney. The government would no longer need to pay benefits (social assistance, etc.) to transplant recipients who return to work. Furthermore, when transplant recipients do return to work, the government collects income tax revenue on the employees earnings, thereby recovering, albeit indirectly, a portion of the costs of the transplants. Returning to the example involving 1,000 patients who earn an average of $50,000 a year, the Government of Quebec would collect, each year and on a recurrent basis, $8.5 million in income taxes and miscellaneous contributions, while the Government of Canada would collect approximately $8 million in additional revenue. The experience of Canadian Blood Services makes an interesting case for promoting living donations. The result of a partnership between Canadian Blood Services and the provincial transplantation programs launched in 2009, the Living Donor Paired Exchange (LDPE) Registry, which Quebec joined in 2010, was created so that people unable to donate a kidney to a loved one 2

4 because of donor-recipient incompatibility could instead engage in an exchange with another donor-recipient pair whose recipient is awaiting a compatible transplant. The LDPE Registry gives Quebec access to a larger pool of potential living organ donors, which could lead to more transplants. Treating kidney failure by means of organ transplantation serves the interests of everyone involved: First and foremost, the interest of patients, whose quality of life improves substantially: their personal lives can finally get back to normal, they can return to full-time employment and they can take part in other activities within their communities The interest of the public healthcare system, which benefits from significantly lower patient treatment costs The interest of medical personnel, who can potentially improve transplantation techniques by performing transplants more regularly, and make sure all of society benefits from their high-level expertise The interest of the economy, as workers and business owners return to the labour market and contribute to the vitality of the economy The interest of governments, which collect income tax revenues and see healthcare costs decline, thus providing them with greater budgetary leeway When it comes to treatments for chronic kidney failure, the healthcare system should be giving priority to organ donation, especially from living donors. Governments must provide the financial resources needed to encourage organ donation, and efforts should be made to facilitate the donation of organs from deceased donors. Moreover, to better inform kidney patients of the benefits of a transplant even before they begin dialysis, they and their loved ones should systematically be encouraged to consider a kidney transplant from a living donor. 3

5 1. Introduction The goal of this report is to demonstrate how kidney failure patients benefit from an organ transplant. Kidney failure is on the rise in many Western countries, as the population ages and diabetes becomes increasingly common. We will begin by giving a brief overview of the kidney failure situation in Canada and other countries with public healthcare plans, such as the United Kingdom and France. We will then turn to the United States, where public and private healthcare systems coexist. After examining the cost incurred by the healthcare system to treat patients with dialysis and comparing that with the cost of kidney transplantation, we present the economics of kidney failure, taking into account much more than just the costs borne by the healthcare system. First, we consider organ availability and how we can make organ donation more common, especially from living donors, as transplanted organs from living donors survive much longer than organs from deceased donors. The second aspect is kidney transplantation s impact on the economy as a whole. Lastly, we present the conclusions of our study. 2. Kidney disease: taking stock of kidney failure today 2.1 Situation in Canada In a recent report entitled Treatment of End-Stage Organ Failure in Canada, 2000 to 2009, the Canadian Institute for Health Information (CIHI) notes that the number of Canadians with endstage renal disease (ESRD) has been on the rise for the past 20 years. However, since 2005, the trend has been slowing and the incidence of the disease appears to be levelling off. 2 This stabilization is at least partly attributable to the fact that, following the onset of kidney failure symptoms, patients are consulting a nephrologist earlier, which helps slow progression of the disease. Diabetes linked to growing obesity rates among Canadians and the aging population is the leading cause of kidney failure. In fact, a third of people with renal failure are diabetic. The fight against kidney failure must therefore start with prevention. This means educating Canadians about the risk factors for diabetes. The CORR annual report estimates that 38,000 Canadians were living with renal failure in 2009, three times the number who were in The sharpest increase was seen among older adults, who accounted for 20% of renal failure cases. In 2009, 5,400 patients were diagnosed with kidney failure, compared with 2,300 in 1990, a clear indication of the extent to which the disease has progressed in Canada. This growth in the incidence of renal failure is exerting strong upward pressure on costs to the healthcare system, as Dr. Louise Moist, nephrologist and associate professor of medicine at the University of Western Ontario, explains: 2 Canadian Organ Replacement Register Annual Report, Treatment of End-Stage Organ Failure in Canada, 2000 to 2009, Canadian Institute for Health Information (CIHI), January

6 While the number of kidney failure patients has been increasing in Canada, the supply of kidneys available for transplant has not kept pace with the growing demand. Dialysis treatments come at a great cost not only to the health care system but also to the patients quality of life. On average, dialysis patients require treatment in a dialysis centre three times per week, often for four hours per session. 3 In addition to the costs to the healthcare system, we need to consider the economic costs for patients, who spend nearly 1,000 hours a year undergoing treatments, if travel time is taken into account. Moreover, as patients health tends to decline over time, they contribute less, and oftentimes nothing, to the economy. The stagnant rates of kidney donation in comparison to demand means that patients are waiting up to six years for a new kidney. 4 Long wait times increase the risks of cardiovascular complications. In fact, it costs considerably more to treat a patient with dialysis than with a kidney transplant. According to CIHI estimates, the annual per-patient cost of hemodialysis is $60,000. In comparison, the cost of a single kidney transplant is approximately $23, To that we need to add the cost of antirejection drugs, which amount to $6,000 a year. The year the transplant takes place, with all associated costs considered, there appear to be no savings. However, as of the second year, the savings per patient is $53,000 once medications are factored into the equation. As such, compared with hemodialysis, a transplant leads to savings of approximately $250,000 per patient over a five-year period. According to CIHI data, the more than 15,000 patients who received a kidney transplant by 2009 had saved the healthcare system $800 million the year after the operation. In Quebec, some 1,000 people are currently awaiting a kidney transplant. If these people were to receive a kidney today, the healthcare system would save $50 million a year. In conclusion, based on this analysis of the situation in Canada, the economic and financial benefits of kidney transplantation are self-evident. However, as we will show below, this approach grossly underestimates the economic gains associated with kidney transplantation, as the approach fails to take into account the indirect benefits to the economy as a whole. 2.2 International comparisons 3 Number of Canadians living with kidney failure triples over 20 years: Renal transplantation saving millions in dialysis costs. Canadian Institute for Health Information media release. January 20, Available at 4 André Picard, Transplant waiting lists and dialysis costs grow as kidney supply lags behind. The Globe and Mail, January 10, Available at: 5 According to the CIHI, this amount does not include surgeon s fees, which vary from province to province. 5

7 Generally speaking, the kidney transplantation rate varies substantially between countries. 6 Moreover, it is difficult to compare healthcare costs internationally because of the differences between public healthcare systems in different countries and the co-existence, in countries such as the United States, of both private and public systems. Nonetheless, without making direct comparisons of healthcare costs in various countries, comparisons can be made within each country of the relative costs of kidney transplants and dialysis. An evaluation of the costs for certain countries with a similar standard of living as that enjoyed by Canadians demonstrates that kidney transplants are far less costly than dialysis. a) The United Kingdom In the United Kingdom, the National Health Service Blood and Transplant (NHSBT) 7 estimates that kidney transplantation is highly cost-effective. In 2009 in the UK, over 37,800 people had end-stage renal failure, and nearly 21,000 of them were on dialysis. The annual cost for a patient on hospital dialysis is 35,000, while the annual per-patient cost for peritoneal dialysis is 17,500, for an average cost of 30,800. The UK s dialysis budget is approximately 540 million, representing 3% of the NHS s total budget. The estimated cost of a transplant is 17,000, to which is added the cost of antirejection drugs on the order of 500 per year; this means that transplantation leads to avoided costs of 8 25,800 per patient as of the second year, and these savings recur each year over the patient s entire lifetime. This amounts to considerable cost savings. In 2008/2009, 2,497 patients received a kidney transplant, which saved the NHS an estimated 50 million on dialysis treatments. Over a longer period, the cost savings are considerable. With over 23,000 patients having received a kidney transplant in the past few years, the NHS estimates the total savings at over 512,000. It is therefore in the British healthcare system s best interest to facilitate kidney transplantation, which is why the NHSBT has been campaigning, through an organization specializing in organ donation, to encourage the public to donate a kidney. b) France In France in 2008/2009, an estimated 35,000 patients 9 with end-stage renal failure were on dialysis. It is believed that France could see considerable cost savings if kidney transplantation were facilitated as a treatment option for these patients. The average cost of dialysis is estimated to be approximately 65,000 per patient per year, compared with an average of 53,500 for a transplant. The cost of antirejection drugs and other treatments is on the order of 8,000 per year per kidney transplant patient. In the medium term, a transplant leads to 6 Source: 7 Source: 8 British pound or pound sterling, the currency of Great Britain. 9 La bioéthique ne doit pas paralyser les dons et les greffes d organes, LE MONDE, June 10,

8 estimated savings of 560,000 per patient over a 10-year period. To this we must add the substantial improvement in quality of life for transplant recipients, which translates into a greater ability to contribute to the economy. These results led to vigorous advocacy on the part of a collective called Demain, la Greffe ( Transplantation Tomorrow ) to promote organ donation as a way to significantly increase the number of transplants taking place in France. In 2009, the rate of deceased donors (per million people) in France was 23.2, far greater than the Canadian rate of c) The United States In the United States, US Department of Health and Human Services data, provided through the National Institute of Health and the National Institute of Diabetes and Digestive and Kidney Diseases, was used to assess the extent of kidney disease in that country. An estimated 10% of Americans over 20, accounting for over 20 million people, have chronic kidney disease. 10 In 2008, just under 548,000 people had end-stage renal failure. For 38% of these people, the disease was attributable to diabetes. The rise in obesity rates in the US risks further inflating the number of people with renal failure over the coming years, which will put further financial strain on the Medicare system. Over 382,000 US residents are on dialysis. In 2008, 17,413 kidney transplants took place in the United States, representing only 3% of dialysis patients. The cost of kidney failure treated through dialysis varies throughout the US healthcare system, 11 where both the private and the public sectors deliver healthcare. According to Medicare data, the cost of dialysis in 2003 was approximately $49,000 a year per patient covered by the public healthcare plan. If inflation is factored in, these costs exceed $50,000 today. Also, for the New York region, which is fairly representative of the country as a whole, the cost of a kidney transplant, including surgeon s fees, is estimated at nearly $105,000 for the first year. As of the second year, the annual cost of medication and other treatments is approximately $18,500, so that by the third year, the Medicare system enjoys substantial savings. A University of Maryland study 12 estimated that the cost of a kidney transplant has decreased to the point that, on average, it takes 2.7 years to recover the expense for patients who were previously on dialysis. For patients who do not need to be readmitted to hospital after the operation, the cost of the surgery is recovered in 1.7 years. Therefore, substantial savings are obtained when a kidney transplant is performed. Lastly, it is worth pointing out that the deceased donor rate varies somewhat from region to region, but for the country as a whole, it is estimated at 26.1 per million, which is well above Canada s rate Cost-Effectiveness of Kidney Transplant, Women in Government, Kidney Health Policy Resource Center, splants_000.pdf 12 University of Maryland Medical Center, 13 As indicated by a number of studies, Spain is the country with the Western world s highest deceased donor transplant rate, at 34.4 per million. For an example, see 7

9 This brief overview shows that kidney transplantation is a markedly less costly way to treat kidney failure. Although the available data shows significant cost differences between countries, in all cases society saves considerable sums when patients are treated by means of a kidney transplant. Moreover, patients quality of life improves significantly, allowing them to contribute to the economy and regain a normal family life Situation in Quebec The situation in Quebec mirrors the trend noted elsewhere in Canada: growth in the number of kidney failure cases and an increase in the number of patients awaiting a kidney. In fact, the waiting list is growing by 6.5% every year and today includes nearly 1,000 patients. Also, in light of the lack of available organs, the number of kidney transplants remains relatively low in Quebec. This result, similar to that observed in the countries discussed above, is also explained by the aging population and the rise in the incidence of diabetes. The relatively low transplantation rate is explained by the insufficient number of organ donations. The latter is partly attributable to the lack of resources dedicated to promoting organ donation. And according to the experts, the promotion of organ donation is not considered a priority by the healthcare system. Furthermore, knowledge, coordination and interest are lacking in a number of Quebec s medical centres. According to The Quebec Branch of the Kidney Foundation of Canada, Quebec could take inspiration from countries that are performing much better on this front. For instance, the province could markedly improve the situation by redoubling efforts to raise awareness of the issue and increasing the number of beds and staff dedicated to intensive care, operating room and transplantation services. It could also provide the training and infrastructures needed to identify potential donors at the province s non-teaching hospitals so that these patients are transferred to a tertiary centre to be managed in a more comprehensive manner up until the time an organ becomes available for donation. Also, in Quebec the percentage of transplants involving living donors is low, amounting to less than 20% of transplants, whereas the rate in the rest of Canada is closer to 50%. On average, organs from living donors survive more than six years longer than organs from deceased donors. Consequently, a distinct advantage can be gained, not only for patients, but for the healthcare system and society as a whole, by encouraging live donor kidney donation. In 2010, 14 the proportion of deceased donors per million Quebec residents was 6.4, compared with the Canadian average of Even worse, Quebec s rate declined again in 2011 to 6.0. The financial benefits that kidney transplantation brings to Quebec s healthcare system are similar to those derived in the cases presented above. According to Canadian data, dialysis costs the public healthcare system approximately $60,000 per year per patient. In comparison, the average cost of a kidney transplant is $23,000, to which a further $6,000 a year must be added for 4c a (in French only) 8

10 antirejection drugs. 15 When an organ comes from a living donor, the financial gain period is extended, which is even more beneficial for the healthcare system and for patient well-being. Because the patient s quality of life markedly increases, society enjoys further economic gains that need to be taken into account, as we will show below. Next, the shorter the wait for a transplant, the greater the probability that the transplant will be successful. The corollary of this is that the longer the wait, the more the patient s health will decline, due most commonly to cardiovascular complications that can compromise the patient s suitability for a kidney transplant. And in the end, the complications generate additional costs for the healthcare system on top of those already incurred for dialysis. Simply put, living donor kidney transplants carried out before or shortly after patients go on dialysis represent the ideal situation for the healthcare system, the economy and patient wellbeing. According to the available data, Quebec must therefore establish a strategy that will move the province toward this ideal situation and help it achieve a transplantation rate that compares favourably with the rates in other jurisdictions. 3. The economics of treating kidney failure Financial data from Quebec, as well as from the rest of Canada and other Western countries, clearly show that kidney transplantation leads to significant reductions in healthcare costs while improving patient living conditions and life expectancy. A calculation of the economics of kidney failure treatment must take into account other aspects relating to the supply and demand of organs, such as the economic implications of transplants on patients. Considering that the available medical data demonstrates that kidney transplants involving organs from living donors offer better outcomes than deceased donor transplants, the healthcare system must take the necessary measures to increase the number of living donor transplants. To achieve this goal, the costs incurred by donors need to be factored into the costbenefit analysis. A health policy seeking to encourage and facilitate organ donation by living donors must include reimbursement of the costs donors incur. Knowing that success is better ensured when transplants involve living donor organs and that transplant recipients cost the healthcare system less than those on dialysis, public healthcare systems have a duty to reimburse donors for the eligible expenses they incur. As such, in order that kidney patients be better informed of the benefits of transplantation even before they begin dialysis, they and their loved ones should systematically be encouraged to consider opting for a kidney transplant from a living donor. a) The costs of organ donation: an economic approach Thanks to technological advances made in the 1990s, laparoscopic (keyhole) nephrectomy has greatly simplified kidney removal from a living donor. For example, in the United States, more 15 This CIHI data does not include physicians fees, the cost of medications administered outside the hospital and follow-up costs. 9

11 living donor transplants than deceased donor transplants were performed in Nevertheless, despite advances in technology, donating a kidney remains a major operation, the many costs of which must still be assumed by the donor. An international study has shown that these costs tend to be underestimated. 17 The authors conclusion: Donors incur many types of costs attributable to kidney donation and the total costs are certainly higher than previously reported. To guide informed consent and fair reimbursement policies, further data on all relevant costs, preferably from a detailed prospective multi-centre cohort study, are required. More research clearly needs to be done in order to paint a complete picture of the costs associated with living donations. A health policy seeking to facilitate living organ donation must therefore begin by assessing the costs incurred by donors. Here is one potential framework we are proposing. The costs incurred include: Pre-operatory examination costs not covered by the public healthcare system Travel, parking and accommodation costs as well as hospital fees when applicable Post-operatory treatments and medication costs that are not covered by the public healthcare system However, for healthy, working donors, one of the greatest costs incurred is that of income lost during the pre-op, operatory and post-op recovery period. (If the donor is a retiree whose only source of revenue is a pension, the lost income is low or nil.) In Quebec, the hospitalization and recovery period for donors is two months long on average. The healthcare sector should reimburse the salary and benefits (such as the employee s contribution to the company s pension plan) donors lose out on while they are on leave. Because the dollar values vary considerably from one donor to the next, a complete assessment of each donor s specific situation would need to be carried out. 18 Yet these costs would be offset relatively quickly, considering the savings that the healthcare system enjoys following the transplant. Moreover, the transplant recipient s economic contribution, which we describe below, increases government revenues. The question that naturally arises in this process is the following: If a clearly defined program for the reimbursement of lost income and benefits is in place, can we safely assume that human altruism will lead to more living donations? While the question is less relevant when the donation is between relatives or close friends, it is particularly pertinent when it comes to donating to a complete stranger. 16 See: Bradley H Collins, MD, in Medscape reference, overview#aw2aab6b3, August Katherine S. Clarke, Scott Klarenbach, Sorina Vlaicu, Robert C. Yang, Amit X. Garg, The direct and indirect economic costs incurred by living kidney donors a systematic review, Oxford Journals Medicine Nephrology Dialysis Transplantation, Volume 21, Issue 7, For reference, the latest Statistics Canada figures establish the average salary at close to $900 a week. A two-month absence would therefore lead to lost income of $7,200 plus benefits. 10

12 b) The reimbursement of costs associated with living donation: current practice Given the advantages of living donor kidney transplants, Quebec and other Canadian provinces reimburse donor expenses on presentation of supporting documents. Hence, the Quebec Department of Health and Social Services action plan for organ donation and transplantation underscored the importance of supporting and encouraging living donation. Canadian provinces including Quebec have already launched such reimbursement programs: British Columbia implemented a reimbursement program in 2006: 50% of donors took advantage of the program and their requests for reimbursement amounted to 20% of the maximum eligible amount of $5,500. As a result of all the measures put in place in BC to encourage living donation, including the reimbursement program, the number of donors increased by 32% during the program s first year and a further 11% the following year. In only a few years, the program will have existed for long enough to provide a representative sample that can be used to determine the cost of the reimbursement program. In April 2008, Ontario launched its own expense reimbursement program. Manitoba announced in 2008 that it, too, would be moving forward with an expense reimbursement program for living donors. Announced in November 2010, Quebec s Reimbursement Program for Living Donors (RPLD) compensates donors for expenses linked to the donation process. 19 Donors may seek reimbursement for expenses incurred and for loss of revenue, provided that certain eligibility criteria are met. Expenses covered by the program include travel, accommodation, meals, parking and loss of revenue, up to a maximum eligible reimbursement of $5,715. For 100 donors, this program would cost a maximum of $570,000 per year, whereas the healthcare system would save $5.3 million. 20 Even if the costs of managing the system are factored in, the savings remain substantial. Without a doubt, the programs launched in Canada to financially compensate living donors, if only partly, are a step in the right direction. However, the imposition of a ceiling on reimbursable expenses may constitute a hindrance, especially if we are seeking to increase the number of healthy donors, including among those earning a good living. Lost income can easily surpass Quebec s eligible expense ceiling of $5,715, especially if we are talking about a two-month convalescence period. Moreover, in Quebec, compensation for lost revenue may only be requested once all the donor s other revenue sources have been exhausted vacation, sick days, disability leave, etc. This clause is too restrictive: donors should always be reimbursed for lost revenue except in cases where the donor s employer agrees to pay the donor s full salary during the entire intervention period or if the donor is retired. In fact, the financial gains for the For this calculation, the savings per patient is $40,000, the same amount presented above in the section about Quebec. 11

13 healthcare system are such that reimbursing donors for expenses places minimal strain on the system and should not be difficult to fund. And once again, this does not take into account the benefits to the economy that we discuss immediately below. c) Economic gains The healthcare system As mentioned above, the public healthcare system would save $53,000 per kidney patient per year for the entire lifespan of the transplanted organ. If the 1,000 Quebecers currently awaiting a kidney were to receive an organ from a living donor, the recurrent savings to the healthcare system would be on the order of $53 million per year; over 10 years, some $530 million in expenditures would be avoided. The funds allocated to supporting donors, as presented above, would be negligible in comparison to the gains to the healthcare system. These substantial savings could be applied elsewhere in the healthcare system, which costs more to support every year. From the perspective of public healthcare managers, kidney transplant patients should be a priority, considering the achievable savings to be had and the resulting financial resources that would be freed up. Moreover, we must also consider that by increasing the number of transplants, we are developing high-level expertise among healthcare professionals who, thanks to their greater experience, could help improve transplantation techniques. Reintegrating kidney transplant patients into economic life Some dialysis patients are unable to contribute to the labour market and as a result, they receive government benefits. Those who are employed often hold only part-time jobs. And because of gradually declining health, some gainfully employed patients on transplant waiting lists may find themselves less able to perform their duties and eventually having to give up their jobs. Consequently, with a few exceptions, people awaiting a kidney are less productive than healthy individuals. However, once they receive a transplant, patients see their lives improve significantly. What s more, it is estimated that 50% of transplant recipients are able to return to the workforce. 21 In the current context of continuing labour shortages, experienced workers who can return to their jobs are invaluable assets to the economy. The salary that transplant recipients receive constitutes their contribution to the economy s GDP. The contribution of employees may even be outdone by business owners who are transplant recipients assuming of course that their businesses are profitable as they will return to contributing to the GDP and to employment as well as investing in their businesses. The government would no longer need to pay benefits (social assistance, etc.) to transplant recipients. Moreover, when they return to work, the government collects income tax on their earnings, thereby recovering, albeit indirectly, a portion of the costs of the organ transplants. These impacts constitute an additional financial incentive to facilitate organ donation. As an example, the average annual salary for an employee, including benefits, is around $50,000. If 1,000 patients unable to work were to receive a kidney transplant and subsequently return to full-time employment, the additional benefit to the GDP related to these jobs would be $50 million. The Government of Quebec would therefore collect, each year and on a recurrent 21 Op.cit., reference 1. 12

14 basis, $8.5 million in income taxes and miscellaneous contributions, while the Government of Canada would collect approximately $8 million in additional revenue. These gains would extend over at least 10 years, the average lifespan of a transplanted kidney. Consumer spending In addition to the above, transplant recipients returning to full-time employment and a more normal life will spend their revenue as consumers, again contributing positively to economic vitality. In the case of business owners, their companies may spend more and make investments to modernize equipment or expand operations. If we assume that the 1,000 transplant recipients cited above obtained employment and that their disposable income amounts to 10% of after-tax earnings, these people would inject some $30 million in expenditures into the Quebec economy. Of course, this would not all be new money, as patients awaiting a kidney continue to spend money in order to provide for themselves, but given the significantly higher income of transplant patients, the net impact would be considerable. Again, the government collects higher revenues on expenditures made by these people or businesses, an increase that would not occur had these patients remained unemployed. With 1,000 people returning to a normal life, the economic impact would be significant. Other considerations We have analyzed the economic gains and costs of living donation. In this case, the medical and economic benefits are greater than the benefits afforded by the donation of organs from deceased donors. Outcomes with respect to the kidneys filtration system, the transplanted organ s survival and patient life expectancy are all better with living donation. Nonetheless, the healthcare system should also promote organ donation upon death and ensure that these organs reach the hospitals with kidney waiting lists. The healthcare system needs to commit promptly to spending the funds needed to take all the actions described above. As we have demonstrated, kidney transplants, even from deceased donors, substantially reduce healthcare costs by eliminating dialysis treatments for transplant recipients, who also see their quality of life improve significantly. Hence, although the economic gains are the same as those described for living donor transplant patients, due to the shorter lifespan of organs from deceased donors, the period of recurring economic gains will be shorter. In the end, kidney transplantation, regardless of the donor type, remains the least costly solution for the healthcare system and the best option for patient quality of life and health. To summarize the economic and financial data, we have created the following table containing the calculations presented in the report. The following assumptions were adopted in creating the table: We assume that 100 living donor transplants take place every year and that over a 10-year period, we arrive at a total of 1,000 patients. 22 We present results for years 1, 2, 3 22 This hypothesis is supported by Quebec s transplantation specialists. 13

15 and 10 in order to illustrate the behaviour of the data over time. The Year 10 data describes the benefits per 1,000 transplant recipients. The per-patient amount saved by the healthcare system as a result of a transplant is $53,000. We assume that $5,000 was given to each donor to cover expenses, so that the net gain is $48,000. The following year, the cost avoided by the healthcare system is $53,000 for each of the 100 patients who underwent a transplant the previous year and $48,000 for the 100 new transplant patients. In Year 11, if the number of transplant patients remains stable at 1,000, reimbursements of donor expenses become zero and the healthcare system avoids costs of $53,000 per patient. The patient s return to the labour market contributes $50,000 to the GDP in the form of a salary. Due to the wide range of possible scenarios that could be envisaged, no data is presented for the case of a business owner who returns to work. As such, the results must be considered conservative. Moreover, based on the data provided by experts in the field of kidney transplantation, we assume that 50% of patients who receive a transplant return to full-time work. If more than 50% of patients return to the labour market, the economic impact will increase accordingly. Again, our calculation is a conservative one. To simplify the presentation, we assume that the benefits to the healthcare system of transplantation for 100 patients materialize the year the surgery takes place. The economic impact of patients return to work is also felt the same year. In reality, the point in time at which benefits are realized varies from patient to patient, and taking each individual patient into account would merely complicate the presentation without contributing significant data to our analysis. As at the 10th year, we obtain the total value of the benefits for 1,000 patients. We have not included the economic impact of consumer spending by patients who have returned to work, as doing so would require other hypotheses on the additional value of these expenses, considering that patients are consumers even before receiving a transplant. Again, the data is conservative. 14

16 Summary table ECONOMIC AND FINANCIAL SPIN-OFFS OF LIVING DONATION Year Cumulative number of transplants Net savings to the public healthcare system* , GDP resulting from a return to the labour market* Income tax revenues* - Government of Quebec Government of Canada Financial total - Government of Quebec* 56.7 * In millions of dollars 4. Promoting living donation The experience of Canadian Blood Services makes an interesting case for promoting living donations. Since it was created in 2009, the Living Donor Paired Exchange (LDPE) Registry has made over 140 kidney transplants possible. The result of a partnership between Canadian Blood Services and the different provincial organ donation programs, the LDPE Registry enables incompatible donor-recipient pairs to be coupled with other pairs in the same situation in order to establish compatible donor-recipient pairs for kidney transplantation. The transplants that the LDPE Registry has made possible have already saved the public healthcare system $5 million by avoiding the $50,000 annual per-patient cost of dialysis in the participating provinces. The Registry s efficacy can be largely attributed to non-designated donors who signed up as individuals so that they could donate a kidney to a compatible recipient. The LDPE Registry is 15

17 the first Canadian Blood Services organ and tissue donation initiative. The organization also recently presented an exhaustive strategic plan 23 to the provincial and federal governments on behalf of stakeholders working in the field of organ donation. The plan, currently being studied by the governments, makes 25 recommendations aimed at increasing the numbers of donors and organ transplants in Canada. Today, the LDPE Registry continues to grow, an optimistic sign for the coming years. Quebec joined the Registry in late 2010 and now benefits from a larger pool of potential kidney donors. Coordination of efforts between medical centres and organizations such as Canadian Blood Services can also foster increased organ donation. Beyond the fundamental issue of patient quality of life and survival, and as our study has shown, kidney transplantation generates considerable financial and economic benefits. 5. Conclusions Treating kidney failure by means of organ transplantation serves the interests of all stakeholders: Firstly, the interest of patients, whose quality of life improves substantially: their personal lives can finally return to normal, they can return to full-time employment and they can take part in other activities within their communities The interest of the public healthcare system, which benefits from significantly lower patient treatment costs The interest of medical personnel, who can make sure all of society benefits from their high-level expertise and can potentially improve transplantation techniques by performing transplants more regularly The interest of the economy, as workers and business owners return to the labour market and contribute to the vitality of the economy The interest of governments, which collect income tax revenues and reduce healthcare costs, thus providing them with greater budgetary leeway The promotion of organ donation, especially from living donors, must become one of the healthcare system s priorities, one that should receive support from the government, which must provide the necessary financial means to mount campaigns promoting organ donation. 23 Op.cit., reference