Implications of learning effects for hospital costs of new health technologies: The case of intensity modulated radiation therapy

Objectives: The impact of learning effects on the variability of costs of new health technologies in a prospective payment system (PPS) through the case of intensity modulated radiation therapy (IMRT) was studied. Methods: A series of consecutive patients treated in nine medical centers was enrolled in a prospective study. Direct costs were assessed from the perspective of the healthcare providers. We used a two-level model to explain the variability of costs: patients nested within centers. Learning effects at the center level were considered through a fixed effect (the learning curve slope) and a random effect (the initial cost level). Covariates were introduced to explain the patterns of variation in terms of patient characteristics. Results: The mean direct cost of IMRT was €5,962 (range, €2,414–€24,733). Manpower accounted for 53 percent of this cost. Learning effects explained 42 percent of the variance between centers (which was 88 percent of the total variance) and were associated with a substantial decrease in treatment costs. The mean initial treatment direct cost was €6,332 in centers with a previous experience of IMRT, whereas it was €14,192 in centers implementing IMRT for the first time. Including logistics costs and overhead, the full cost of IMRT was €10,916. Average reimbursement was €6,987. Conclusions: Learning effects are a strong confounding factor in the analysis of costs of innovative health technologies involving learning effects. In a PPS, innovative health technology involving learning effects necessitates specific reimbursement mechanisms.