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Understanding the costs and benefits of investing in cancer

Posted by: , Posted on: - Categories: Chief Knowledge Officer

1 stethoscope

Understanding the costs associated with cancer is vital in order that resources are used for maximum effect.

And investing in prevention and early intervention is critical if we are going to reduce the emotional and physical impact of cancer on individuals, families, friends and those that care for people with cancer.

Calculating the health care and wider costs of cancer - as well as assessing the cost-effectiveness of prevention, early intervention and treatment - is a fundamental challenge faced by decision makers across the health and social care system.

The costs of cancer can be felt at an individual level: work by Macmillan has shown that most (83%) cancer patients incur an average cost of £570 per month as a result of their illness.

It can also be felt in the national economy: Oxford University estimate the cost of cancer to the economy is £7.6 billion a year due to premature deaths and time taken off work.

Costs and the health system

The Independent Cancer Taskforce Report (ICTR) set out the need for there to be clearer accountability of spend on cancer and emphasised the need for action in prevention and early diagnosis to reduce the longer term burden on the health system.

It says: “The National Audit Office has estimated cancer services cost the NHS approximately £6.7bn per annum in 2012/13. The Five Year Forward View projections indicate that this will grow by about 9% a year, implying a total of £13bn by 2020/21.”

Recommendation 95 in the strategy specifically asks that: “NHS England and Public Health England should work with Monitor and other bodies to consider how to develop better health economic evaluation of new service models and interventions.”

We have a dedicated health economics team that commissions work to assess the economic impact of prevention and early intervention, and an example of this is recent work on bowel cancer in direct response to Taskforce Recommendation 95.

This work has summarised the available cost-effectiveness evidence.  Cost-effectiveness is a key concept in health economics and is concerned with the value we get from the money spent – where value is often expressed in terms of improving both survival and quality of life.

For instance if we invested resources in the best possible way in bowel cancer then we would see improvements in survival, and also improvements in the quality of life of individuals who are staged earlier and therefore do not suffer the more unpleasant effects of treatment that could potentially be avoided.

This is why a ‘return on investment’ (RoI) type approach has been followed in this work: how do we make sure that resources are invested in such a way that we achieve health gains at the same time as avoiding health care and other system costs further down the line.

Bowel cancer

As an organisation, PHE does an enormous amount of work on the prevention and early diagnosis of bowel (also known as colorectal) cancer.

Earlier this year the PHE Cancer Board produced a Health Matters: improving the prevention and diagnosis of bowel cancer which highlighted bowel cancer as the second most common cause of cancer death in England behind lung cancer.

Crucially, the earlier bowel cancer is detected the better the survival rate.  Earlier diagnosis also increases the odds of treatment success, resulting in fewer complications and better quality of life.

In 2013 only 9% of bowel cancers were detected through screening; while 24% were picked up through emergency presentation at a point when bowel cancer is much more likely to be at a later stage and harder to treat.

In June 2016 it was agreed that the Faecal Immunochemical Test (FIT) will become the primary test for bowel cancer (ICTR recommendation 11).

FIT is a better version of the current screening test and has been estimated will increase screening uptake by around 10%; meaning an additional 200,000 people could be tested each year.

Bowel cancer and cost-effective interventions

The evidence is that early diagnosis will not only save lives but can also be very cost-effective.

Bringing together our expertise in prevention, early diagnosis and health economics - and working in partnership with the Department of Health, NHS England, Cancer Research UK and MacMillan Cancer Support, the PHE Cancer Board has now delivered its first tool to support ICTR recommendation 95.

This user-friendly tool enables organisations at a local level to estimate the costs and benefits of improving outcomes in bowel cancer and to make the business case for appropriate investment to improve early detection.

The tool’s output can help local commissioners to answer:

  • How is my Clinical Commissioning Group (CCG) performing today?
  • What is the health gain associated with earlier bowel cancer intervention?
  • What is the economic impact associated with earlier bowel cancer intervention?

The tool uses the CCG’s own data to estimate the benefits (in terms of fewer late presentations) that could accrue over time from diagnosing people earlier.

The primary goal is to diagnose more people at an earlier stage to avoid a later diagnosis in the future.

The final output of the tool is a calculation of economic impact (summarised as the cost difference between intervening or carrying on with ‘business as usual’) and estimated health benefit (number of late diagnoses translated into quality adjusted life years gained from earlier diagnosis).

The tool is accompanied by a report which brings together what is known about the costs of colorectal cancer across the care pathway, linking to NHS England work on defining the optimal care pathway that aims to ‘shift the curve’ towards earlier detection and diagnosis.

Nene CCG

For instance, the RoI tool indicates that Nene CCG commissions services for a relatively large population (around 700,000 people) in Northamptonshire.

In 2013, Nene diagnosed 405 new bowel cancer cases and spent nearly £3 million on treating these patients in its 2013-2014 programme budget.

Patients in Nene had a 74% one-year survival rate, and each year Nene performs about 4,500 colonoscopies.

Nene performs better than the average CCG in terms of having a low percentage of people waiting more than four weeks for a colonoscopy but is in the bottom quartile with regards to the one-year survival rate metric.


The distribution of GP endorsement letters together with enhanced leaflets can increase the screening uptake rate by 12%.

For Nene, that means an additional 6,383 patients are screened, an additional 319 get colonoscopies, and an additional 16 people are diagnosed with CRC each year.

The intervention itself costs £53,000 (the cost of mailing letters to the population eligible for screening) and additional diagnostics and screening total around £241,000.

The combined costs of diagnostics and treatment after the intervention add around £310,000 annually to system costs compared with taking no action, in the first couple of years after the intervention.

Even after the cost reductions of fewer late presentations kick in, the system still pays approximately £142,000 more annually than if it did nothing (in Year 10).

For that £142,000 however, Nene patients are receiving a significant quality return in terms of health gain.

By year 10, five fewer people each year are being diagnosed with stage 4 colorectal cancer, which has only a 7% five-year survival rate.

The intervention is estimated to cost only £950 per healthy life year gained, a highly cost-effective result.

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