Health economics

Health economists study the supply and demand of health care resources and the effect of health services on a population. For example, they investigate:

• the cost, value, effectiveness and benefits of health systems and services
• how healthcare is used, funded and delivered
• how health services affect people’s health outcomes and quality of life

Health economists consider these questions from various angles. For example, a macro-economic or ‘big picture’ analysis might look at national spending decisions over the course of several years. A micro-economic analysis might look at the treatment decisions taken by health professionals in a particular hospital.

Epidemiological research shows that more people are being diagnosed with cancer, but also that more people are surviving cancer. An increasing number of people with cancer also have other serious health problems, such as diabetes, dementia, obesity or high blood pressure.

Health economics analyses how the costs and benefits of these changes affect our healthcare systems and services. For example, some incurable cancers can now be managed as complex, long-term conditions. In the past, people with these cancers might have received a short period of emergency treatment and end-of-life care. Now, they need long-term care and support from their hospital and GP. Health economists help us to understand how our systems need to evolve to meet these changing needs. Do we need to train more GPs? Do we need to budget for people to be given anti-cancer drugs for longer periods?

Macmillan is committed to improving the lives of people affected by cancer. In order to do this, we need to understand the human costs of cancer but also the financial costs. 

Some of the key themes of our work in this area are:

• the relationship between costs and outcomes
• variations in costs and outcomes between and within different types of cancer
• total costs across the pathway
• projected costs after initial treatment has finished 
• the cost-effectiveness of Macmillan interventions.

We use this information to fight for better outcomes for people affected by cancer and to ensure that our supporters’ money is spent in ways that make the biggest difference. 

Macmillan uses health economics evidence to: 

• develop new services and improve existing services 
• inform policy-makers, decision-makers and the wider public about the costs, benefits and outcomes of cancer care 
• persuade others to invest their resources in ways that improve quality of care and quality of life for people affected by cancer. 

For example, we know that post-treatment follow-up care could be improved. People receive individualised care for their specific cancer, but everyone receives one-size-fits-all monitoring after treatment has finished. We know that this isn’t the most cost-effective approach. It also doesn’t deliver the best experience and outcomes for people affected by cancer.

To improve the situation, we helped to develop stratified care pathways for certain types of cancer. Pilot programmes in Northern Ireland show that this more-personalised approach improves health outcomes and reduces stress for patients. It also gives medical staff more time to focus on the people who need them most and reduces unnecessary expenditure.

Health economics provides insight into the costs of cancer for the individual and the wider system. This insight helps decision-makers to allocate resources in ways that meet people’s needs. For example, it enables: 

• national policy-makers to invest in the right skills, equipment and infrastructure for the future 
• local authorities and health commissioners to identify best solutions for the people who live in their area 
• medical professionals to understand the short- and longer-term effects of their decisions about treatment and care.

Health economics also helps us to see beyond ‘big picture’ national health decisions. It shows us that cancer is a significant expense for the NHS, but that it’s also very expensive for people who are affected by cancer. Our research has enabled us to tackle these costs in a variety of ways. For example, Macmillan: 

• successfully campaigned to scrap prescription charges for cancer medications, 
• worked with Nationwide to implement a free, confidential support service for customers who are struggling financially following a cancer diagnosis,  
• campaigned to limit the financial impact of welfare reforms on people affected by cancer, 
• provides around £10 million per annum in direct grants to help people with costs caused by or related to their cancer. 

Current health economics research that is funded, commissioned or conducted by Macmillan includes:

What explains cancer costs in England?

Mauro Laudicella at City University, London, is examining the magnitude and variations of cancer costs across different stages of the disease, geographical areas and pathways of care. He is analysing data from 1.2 million patients to identify the direct hospital costs and economic costs of four of the most common types of cancer in England: breast, colorectal, prostate and lung cancer.

Read an academic journal article on this research [PDF].

Costing the Recovery Package

Optimity Advisors are conducting a cost consequence analysis to understand the wider economic benefits of the Recovery Package. The Recovery Package helps people living with a diagnosis of cancer to prepare for the future and identify their individual concerns and support needs. It has been adopted by the NHS as a priority intervention. The research project is analysing the cost and benefits of the four central elements of the Recovery Package: Holistic Needs Assessments, Treatment Summaries, Cancer Care Reviews, and Health and Wellbeing Events.

Findings from this study will be available in 2016.

Cancer cash crisis: counting the cost of care beyond treatment 

In December 2015, Macmillan published Cancer cash crisis: counting the cost of care beyond treatment. This report explored the cost of long-term care for people with cancer. It brought together analysis from a range of sources including NHS waiting times and budget data, international comparisons of cancer survival, and new findings from three major research studies funded by Macmillan.

Download the Cancer Cash Crisis report [PDF].