The Costs of Cervical Cancer Treatment with a Social Focus

Abstract

The study of the value creation system in the strategic management of costs associated with diseases shows the need to focus the analysis on the activities that make it up, since they detail all the interrelated actions to achieve efficiency in their treatment, particularly in cervical cancer. The design of its value chain is important in the economic context in which it is created and the agents involved in its achievement, since the user, the provider and the financer of health care have different health, economic and political interests. Quantifying its economic impact on society is relevant for its economic evaluation, reducing uncertainty and optimizing the design of public policies. There are theoretical and methodological weaknesses in the methods for estimating their indirect costs, market imperfections and the postulates of economic theory as their main foundations. The objective of the article is to design the value chain of the disease and the calculation of its costs, which will be specified by highlighting which activities will be considered as contributing value to its treatments and which others will be considered as supporting activities for the beneficiary of its treatments, who will be the patient.

1. Introduction

The International Union Against Cancer diagnoses twelve million people worldwide each year and 7.6 million die from cervical cancer. In Latin America, this disease is the second leading cause of death in women, especially affecting the lower socioeconomic levels [1].

Cervical cancer, or cancer of the cervix, is a disease in which cancerous (malignant) cells are found in the tissues of the cervix. It develops slowly, beginning with a precancerous lesion called dysplasia. The most frequent cause of cervical cancer is the human papillomavirus (HPV), which is transmitted through sexual intercourse [2]. In Ecuador for some years, it has been one of the leading causes of death among women.

This disease, like many others, requires a large expenditure of resources on the part of both state and private health authorities. Managing them within the institutions that provide health services, while respecting their characteristics, becomes an important challenge for this type of organization.

1.1 The direct cost of disease treatment

The cost of treatment of diseases is a partial evaluation within health economic evaluations; these types of studies analyze the direct health and non-health costs generated by these, as well as the indirect costs associated with them [3, 4, 5].

However, after a review of several of these studies, it was determined that there was no standard methodology for the treatment of costs associated with the disease and essentially classifying them in terms of the object of costs—the disease—into direct and indirect [4, 5].

This problem is coupled with the fact that there are two points of view on how to cost illness: one approach taken from the treatment given by accountants, using concepts from management accounting, and another from the vision held by health economists who essentially differ in the treatment that indirect costs receive. However, the authors acknowledge after an extensive literature search that a large majority of these studies use the health economists’ version of the cost of illness [5, 6].

In many studies, direct health costs are estimated by multiplying a vector of quantities of resources consumed by a vector of prices [7, 8]. For this purpose, both vectors are constructed by considering all the inputs used in the care process and the market prices associated with each one, respectively. Among the resources commonly considered, some authors [9, 10] highlight outpatient care, medical consultation, hospitalization costs, medication and laboratory tests, as well as resources consumed in emergency services, nursing homes and home care. However, other authors also consider those resources consumed in rehabilitation and specialized care [11, 12, 13].

Likewise, direct non-health costs include the expenses of patients, relatives, friends and non-profit institutions in terms of payments for transportation, food, hygienization, caregivers, medications and other inputs borne by these agents [14]. In order to value them correctly and obtain satisfactory results in their management, it becomes necessary to broaden the range of analysis, from the formation of their value chain to the information resulting from the calculation of their costs [15, 16, 17].

One of the main problems in cost-of-illness studies is the distribution of indirect costs to direct activities, since most studies on this subject are devoted to adding up independently both direct health and non-health costs and the indirect costs associated with these [4].

In addition to these elements, health care nowadays has become a market where various health care providers are present and compete to obtain a larger number of clients. This strategic competition ranges from having better trained human resources, medical procedures with the latest advances in medical sciences to efficient cost management that provides a target cost necessary to maintain an expected profit margin [4].

Hence, health care institutions must borrow three essential elements from the strategic management of business systems: achieving strategic positioning in health care markets, designing value chains for key factors such as disease and managing their costs efficiently associated with the activities that generate value in their treatments.

1.2 The disease treatment value chain

The design of the disease treatment value chain is a novel element in its management. It is recognized as the interrelated double value chain, which links both healthcare and non-healthcare activities in the conception and delivery of value that makes it possible to achieve efficiency in the use of human, technological and material resources, resulting in the improvement of the quality of life of patients or in their definitive cure [6, 18].

The health chain of the disease has as by all the supplies that companies focused or not on health services provide, i.e., medical, primary care and indirect supplies to the health service [6, 19].

Direct health activities are the medical procedures that directly influence the provision of services in the entity, such as outpatient consultations, hospitalization, diagnostic tests, among others. The support activities help the main activities to develop satisfactorily, including the actions carried out by the administrative development department, where the areas of planning, accounting, finance, investment management, human resources management, technological development, purchasing and supply, among others, are grouped together [6, 19].

The non-health value chain of cervical cancer treatment, as for many other diseases, includes all the costs, skills and knowledge that social agents such as family members, friends and non-profit institutions contribute to improving the quality of life of patients afflicted with this disease within a given social environment (14,18] [20, 21, 22]. This disease, it integrates social values, which are nothing more than human values that are part of the social culture such as ethics, morality, solidarity, humanity, survival, etc., with the costs borne by patients, families, friends and social organizations, state prevention policies, the medical culture of the population and ancestral knowledge and with the beneficiaries of the services, the patients.

This value chain is composed of core and support activities linked to the social agents that support the disease. Among the main activities are expenditures for transportation, food, sanitation, payments to caregivers and other activities carried out by families, friends and non-profit institutions involved in improving the quality of life of patients. Support activities include activities that describe the results of policies for the prevention of cervical cancer carried out by health authorities and other social organizations, the activities they develop, the medical culture and the patient-health institution relationship, as well as the ancestral knowledge of the population that has survived from generation to generation regarding the treatment of this ailment [6, 19].

The margin of advantage in the fight against cervical cancer treatments could be understood as the contribution of value generated by all the main activities within its value chain as well as the value that emerges in the relationships between them that should guarantee efficiency in the use of available resources by the social agents as well as the design of policies by the state in terms of decreasing the incidence of this disease on the agents involved [6, 19].

Now, having an adequate design of the value chain, for any process, contributes to developing a cost leadership strategy that allows the achievement of efficiency and savings of all types of resources [23, 24], but which cost system will be the most appropriate to achieve the organization’s strategies?

Traditional systems have the disadvantage of not providing sufficient information for decision-making, they only use quantitative data, they emphasize production or service costs and they use limited criteria for the distribution of indirect costs, which makes it necessary to use other procedures that meet current information needs for management and decision making [6, 23, 24, 25, 26].

To solve these problems, Activity Based Costing (ABC) and Activity Based Management (ABM) have emerged, although their design and application predate the development of the conceptualization of the value chain, the authors agree with the specialists consulted [6, 23, 24, 25, 26, 27, 28, 29] that the analysis of the value chain makes it easier for the organization to define a better structure by activities.

It is necessary to emphasize that the objective of this article is to design the value chain of the disease and the calculation of its costs, so it will be specified in highlighting which activities will be considered as value contributors to their treatments and which others will be considered as support for the beneficiary of their treatments, who will be the patient. In the same way, the procedure to cost their activities and some relevant elements in their illustration in SOLCA Manabí, Portoviejo, Ecuador, is presented.

2. Materials and methods

2.1 Research universe

A retrospective-descriptive cross-sectional study was conducted in 2016, measuring the prevalence of exposure of patients and their expenses associated with cervical cancer, family members, friends and their outcomes (treatment costs) in the period that the study was developed.

A total of 189 records were reviewed, which were all the patients attended in one year, having been necessary the design of an annotation sheet per patient. It should be noted that in the case of SOLCA Manabí, Núcleo de Portoviejo, the patient’s logbook (clinical history) is in a database where the physician updates the information resulting from all the medical procedures undergone by the patient, an element that greatly facilitates the statistical work. In addition, a survey was carried out to determine the costs associated with the disease for 122 people, including 61 patients suffering from cervical cancer, 46 family members and 15 friends.

2.2 The cervical cancer value chain

The cervical cancer treatment value chain consists of two chains that complement each other (Figure 1): a health chain and a non-health chain. The two chains are linked together and show the activities that add value to the treatments for the disease.

Figure 1.

Value chain of cervical cancer treatments in SOLCA, Manabí. Source: Adapted from Michel Potter from his book “Competitive Advantage” [30].

2.2.1 Health care value chain for cervical cancer treatments

First, the design of the chain required a representation of each link in the process using the relevant techniques for this case, such as a bibliographic study and the expertise of the working group or other specialists when necessary to define the hierarchies of the processes, especially the disease protocol.

Following the sequence of the tasks described above, the input of the chain is composed of both state and private companies, mainly from the province of Manabí and its neighbor Guayas, mainly from its capital Guayaquil, which provides primary care medical supplies for the health service, companies such as Simed, Magnamedical, Sumelab, Ecuador Overseas, among others.

To define the main activities, outpatient consultations, hospitalization and clinical laboratory were established, including DNA testing for Human Papilloma Virus (HPV), vaginal autotomy, Papanicolaou screening (Pap smear), among others; and oncological medical procedures such as radiotherapy and chemotherapy.

Among the support activities are the actions carried out by the administrative development department, which includes the areas of planning, accounting, finance, investment management, human resources administration, technological development, purchasing and supply, among others.

The output of the health value chain is the interrelationships of the main activities (outpatient consultations, hospitalization, diagnostic tests and medical procedures for oncology patients) with their support activities (administrative, logistic, etc.) that allow an advantage in the application of the treatment for the improvement of the quality of life of patients with cervical cancer. The beneficiaries of the healthcare value chain are the patients with this type of ailment.

2.2.2 Non-healthcare value chain of cervical cancer treatments

The inputs of the cervical cancer non-health value chain were defined by social values prevalent in society such as love of family, solidarity and humanity.

The main activities in the cervical cancer non-health value chain were essentially defined by food, sanitation, transportation, caregivers and drugs.

Support activities were identified with the medical culture acquired by patients, family and friends, as well as with the result of the prevention policies of the health authorities against cervical cancer; and, with the ancestral knowledge transmitted from generation to generation that favors the improvement of health.

2.3 Procedure

The procedure for calculating the health and non-health costs that determined the total cost of cervical cancer treatments was based on the financial statements of the selected entity and the expenses of its patients, family members and friends associated with their treatments.

The following tasks were carried out to determine the health costs of treatment:

1. Select the key direct and indirect areas of responsibility or sub-areas of health services.

2. Make the secondary distribution of indirect costs from the support areas to the direct areas in the provision of health services, selecting the appropriate basis for their allocation.

3. Calculate the rates of indirect expenses of the direct areas to the provision of services.

4. Calculate the unit costs of medical procedures.

   • The total number in each area of responsibility or key sub-area with its total allocated costs was taken.

   • The corresponding distribution coefficient or other appropriate method was determined and multiplied by the number of specific procedures to obtain their unit costs.

   • The unit costs were multiplied by the units of measure (cost drivers) for each activity per patient.

5. Calculate sanitary costs for each direct activity.

6. Determine the costs by health stages of cervical cancer.

7. Calculate the total health care costs of cervical cancer treatments.

8. Calculate the average unit health costs per patient.

The following steps were taken to determine non-health costs:

1. Develop and apply a questionnaire to obtain the information necessary to determine the costs of direct non-health activities:

   • Make a selection of the patients, family members and/or friends involved in the selected time period.

   • Collect the information needed to prepare the questionnaire.

   • Prepare and apply the questionnaire to calculate the costs of non-health activities.

2. Calculate non-health costs for each direct activity designed.

   • Calculate the non-health costs of each direct activity per respondent.

3. Calculate the coefficient of salaries of patients, relatives and friends involved in the research and indirect non-health expenses.

   • Obtain the salary of patients, relatives and friends.

   • Calculate the salary coefficients of patients, relatives and friends.

   • Calculate non-health indirect costs.

4. Define cost drivers to allocate non-health indirect costs.

   • Define the cost drivers for each of the direct non-health activities.

5. Distribute indirect costs to direct non-health activities.

6. Estimate the non-health costs of cervical cancer treatments.

7. Calculation of total and unit costs of cervical cancer treatments.

In addition, as a relevant element, the cost per stage of the treatment of the disease is shown, taking into account the approved protocols [31].

• Stage 0 (In situ): In situ cases with carcinomas that are cured only with the cone leep and periodic check-ups, do not require further treatment for cure.

• Stage 1: The disease is limited to the cervix only.

• Stage 2: It goes beyond the cervix, but does not affect the pelvic wall or the lower third of the vagina.

• Stage 3: There is an incidence in the pelvic wall and/or involvement of the lower third of the vagina and/or causes hydroureteronephrosis or renal failure.

• Stage 4: There is already metastasis or involvement of other organs such as bladder, rectum, lung, liver and brain.

It is important to note that the study was approved by SOLCA’s Board of Directors, which determined its scope and the time horizon of the research. Its results were discussed and are presented below.

3. Results

As indicated above, the costs of cervical cancer treatments at SOLCA Manabí, Portoviejo, Ecuador, were calculated taking into account the expenses incurred by the entity in one year. The following tables (Tables 1–3) present the calculations derived from the application of the procedure. The total health care cost for the treatments was US$ 1,296,510.27, while the average unit cost per patient attended was US$ 6859.84.

Total sanitary costs
Direct activities	Costs
Outpatient	56.369,92
Hospitalization	1′170.742,70
Clinical laboratory	54.413,24
Other oncologic procedures	14.984,41
Total health care costs	1′296.510,27

Table 1.

Total health cost per activity of cervical cancer treatments.

Total unit sanitary costs
Direct activities	Costs
Outpatient	298,25
Hospitalization	6.164,41
Clinical laboratory	287,90
Other oncologic procedures	78,28
Total sanitary average unit costs	6.859,84

Table 2.

Average unit health cost per activity of cervical cancer treatments.

Direct activities	Stage 0	Stage 1	Stage 2	Stage 3	Stage 4	Costs
Outpatient	14.360,30	2.188,24	2.598,53	15.299,17	25.929,48	56.369,92
Hospitalization	31.429,65	4.789,28	21.671,97	415.773,00	697.078,80	1′170.742,70
Clinical laboratory	20.210,87	4.637,19	10.405,93	12.978,53	6.180,72	54.413,24
Other oncologic procedures	3.817,30	581,68	690,75	4.066,92	5.827,76	14.984,41
Total costs per treatment stage	69.818,12	12.196,39	35.367,18	448.117,82	731.010,76	1′296.510,27

Table 3.

Cost by stages of health activities in the treatment of cervical cancer.

The activities that generated the most expenses were hospitalization and outpatient consultation, respectively, while the activity that generated the least expenses was other oncological procedures.

Another element to highlight is that the stages of treatment that generated the most expenses were stages 3 and 4, which shows that these are the stages where most resources are allocated to treatment.

Tables 4–8 presents the calculations derived from the application of the procedure for non-health costs. The total non-health cost for the treatments was US$1,586,736.60, while the average non-health unit cost per patient attended was US$ 8395.43.

Main activities	Costs
Feeding	833.562,67
Transportation	114.074,67
Hygienization	116.162,47
Caregivers	48.605,83
Medications	202.270,83
Laboratories	247.336,17
Total	1′562.012,63

Table 4.

Direct non-health activities costs.

Activities	Activity-based cost drivers	Cost drivers
Feeding	Times of food consumption	1.157
Transportation	Times of transportation utilization	541
Hygienization	Number of toilets	10.411
Caregivers	Number of care	554
Medications	Number of doses	305
Laboratories	Number of tests	1.032

Table 5.

Non-sanitary cost drivers.

Direct non-sanitary activities costs
Main activities	Costs	%	Indirect expenses	Cost drivers	Fees
Feeding	833.562,67	0,533,646,559	13.193,86	1.157	11,4,035,104
Transportation	114.074,67	0,073030566	1.805,61	541	33,375,3331
Hygienization	116.162,47	0,074367175	1.838,65	10.411	0,17,660,665
Caregivers	48.605,83	0,031117439	769,35	554	13,887,1234
Medications	202.270,83	0,129,493,724	3.201,60	305	10,4,970,458
Laboratories	247.336,17	0,158,344,537	3.914,91	1.032	37,935,1315
Total	1′562.012,63	1,00	24.723,97

Table 6.

Distribution of indirect non-health care expenses.

Main activities	Costs	Indirect expenses	Total direct non-health activities
Feeding	833.562,67	13.193,86	846.756,53
Transportation	114.074,67	1.805,61	115.880,27
Hygienization	116.162,47	1.838,65	118.001,12
Caregivers	48.605,83	769,35	49.375,18
Medications	202.270,83	3.201,60	205.472,43
Laboratories	247.336,17	3.914,91	251.251,07
Total	1′562.012,63	24.723,97	1′586.736,60

Table 7.

Total non-sanitary costs.

Main activities	Total direct non-health activities	Number of patients	Unit Cost
Feeding	846.756,53	189	4.480,19
Transportation	115.880,27	189	613,12
Hygienization	118.001,12	189	624,34
Caregivers	49.375,18	189	261,24
Medications	205.472,43	189	1.087,16
Laboratories	251.251,07	189	1.329,37
Total	1′586.736,60	189	8.395,43

Table 8.

Average non-sanitary unit costs per patient.

Once the health and non-health costs have been calculated, the tables (Tables 9 and 10) show the average total and unit costs for cervical cancer treatments. The total cost of treatments was US$2′883.246,87, while the average unit cost per patient treated was US$15.255,27.

Total sanitary costs	Total non-sanitary costs	Total disease costs
1′296.510,27	1′586.736,60	2′883.246,87

Table 9.

Total costs of cervical cancer treatments.

Total disease costs	Total patients	Unit costs of disease
2′883.246,87	189	15.255,27

Table 10.

Average unit costs for cervical cancer treatment.

4. Discussion

The research determines the total and unit costs of cervical cancer treatment at SOLCA Manabí, Portoviejo, Ecuador. An essential element in the management of the costs associated with the treatment of the disease was the use of the value chain in its design, which made it possible to associate it with the activities that, according to its protocol, allow it to cope with the disease.

Although there are many studies that calculate the direct costs of the treatment of diseases in health institutions, those that use the tools of strategic cost management are limited. This is a novel approach within these types of studies since it is based on the idea that health services are provided in a healthcare market where there are several agents such as private, state or non-profit entities that compete for them.

Health services have a fundamental characteristic, which is that their ethical content of trying to save or maintain the quality of life of patients, regardless of the resources allocated to their treatment, should be the guiding principle. However, this ethical conflict is threatened in many cases by whether or not to provide patients with the necessary resources if they do not have health insurance to cover them.

This article is not intended to stir up controversy about health systems in many countries, but to show the tools of cost management to enable the efficiency of many providers of these services. Health is no stranger to the realities of the treatment of expenditures in many sectors of the economy and the calculation of the costs of their products or services. Traditional cost systems tend to overestimate or underestimate the costs of their products or services due to the defective treatment of the indirect costs associated with them. By managing them by activities, it is possible to correct them according to their cost generators, which make them more competitive, no matter the market where they are developed.

In the particular case of health services in the treatment of cervical cancer in SOLCA Manabí, Portoviejo, Ecuador, they have a particular treatment since it is a non-profit service provider. This does not mean that it does not need to make profits to invest in maintaining and increasing the quality of the services it provides. To this end, it charges the various insurances established in the Ecuadorian financial system the corresponding amounts according to the Tariff of benefits for the national health system approved by the Ministry of Public Health of Ecuador [32], so SOLCA, since it does not set the prices of the services, control of its costs will be objective in order to obtain the profit it requires, as shown in Figure 2.

Figure 2.

Target costs in SOLCA.

It is important to clarify that, although the purpose of the research is not to design a tool to achieve a target cost, it can serve as a basis to achieve it, adapting to the realities of the environment of SOLCA Manabí, Núcleo de Portoviejo in setting the necessary utility for the quality of its services. Hence, the authors agree with Capasso [33] he states that the target cost “is not a costing methodology, it is a management tool that allows ordering, adapting and assembling the activities of the organization and its consequent costs to achieve a level of profitability in accordance with the objectives set by the management”.

In the same way, this procedure would serve as a basis for the control of the resources involved in cervical cancer treatments, since it would make it possible to detect deviations both in the costs of materials, personnel salaries and others directly or indirectly involved between their plan—the result that paid for the research—and the actual record in subsequent periods. The causes of these deviations should be detected and corrected to help achieve the organization’s goals [19].

On the other hand, the calculation of non-health costs links health service providers with society, since its purpose is to assess the impact caused by the disease on patients, their families and other social agents. This will make it possible to articulate state policies that minimize the impact of the disease on the patients directly involved, not only for the health service providers but also for society as a whole [19].

To achieve an analysis of the results of non-health costs, the authors refer to the National Survey of Urban and Rural Household Income and Expenditures of Ecuador (ENIGHUR) where household expenditures are described for various items such as food and transportation, among others [34]. However, the last survey conducted was in 2011–2012 [35], well before the study presented here, so it was not possible to contrast the results of the research. The aim was to analyze the incidence of household expenses with those highlighted in the care of patients with cervical cancer.

But yes, with the data available in 2011–2012, it can be confirmed that since that date, food expenses have been the most relevant in Ecuadorian households with 24.40%, showing an increase in relation to previous studies [34], which reaffirms the authors’ proposal. Hence, the results of non-health costs provide SOLCA Manabí, Núcleo de Portoviejo and the State, through its institutions, with a basis for assessing the impact of the disease on a relevant social sector such as women as essential members of Ecuadorian households.

5. Conclusions

Cervical cancer is a disease with a severe impact on the quality of life of the patients who suffer from it in many cases. The disease manifests itself with the appearance of cancerous (malignant) cells in the tissues of the cervix. It develops slowly, beginning with a precancerous lesion called dysplasia. The most common cause of cervical cancer is the human papillomavirus (HPV), which is transmitted through sexual intercourse. Cervical cancer can also impose a financial burden on healthcare systems. Although there are many studies that estimate the costs of treating disease in healthcare institutions, few use strategic cost management to determine these costs. This is a novel approach within these types of studies since it is based on the idea that the provision of health services is provided in a healthcare market where there are various agents such as private, state or non-profit entities that compete for it. In the same way, the inclusion of the non-health component in the costing methodology values the importance of the expenses of patients, their families and friends in achieving the quality of life of the patient with this ailment. It also provides relevant information for health authorities to propose state policies that minimize the impact of the disease on society through public policies. This study is an example of applying these tools in SOLCA Manabí, Portoviejo, Ecuador, which is trying to make the calculation of costs associated with cervical cancer treatments more efficient.

Acknowledgments

The authors thank the authorities of SOLCA for their support and the students of the Universidad Técnica de Manabí for their collaboration in the collection of data on the patients affected by this disease.

Conflict of interest

The authors declare that there are no conflicts of interest.

Authors’ contributions

Johanna Melissa Aguayo Joza: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.

Carlos Javier Más López: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.

Guido Enrique Terán Mogro: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.

Luis Santiago Quiroz Fernández: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.

Shirley Elizabeth Pizarro Anchundia: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.

Amy Melissa Loor Aguayo: Participated in the drafting and translation of the paper.

Joan Manuel Loor Aguayo: Participated in the study and analysis of the conceptual elements related to the Introduction and Methodology. Contributed to the evaluation and discussion of the research results. Collaborated in the conclusions and bibliographical references.