Cost-effectiveness is a multi-faceted indicator that requires assessment of diverse factors over several years — a fact that places it outside the usual time frame of annual budgeting. Brown and Knopf reviewed a number of cost-effectiveness analysis models, developed to evaluate colorectal cancer screening, that incorporated information or estimates about the following five types of model parameters:

1. the epidemiology of population screening, including cancer-specific epidemiology;
2. the natural history of the disease process;
3. performance characteristics, e.g., sensitivity and specificity of tests used for screening;
4. characteristics of the screening program; and
5. the economic cost of services and procedures associated with the screening program, as well as services and procedures associated with disease detection and treatment in the absence of screening.

They concluded that “in general, screening for colorectal cancer appears to be favorably cost effective ... estimates also compare favorably to those for mammography screening.” [ 21 ]

Vernon pointed out that existing analyses of the cost-effectiveness of different colorectal cancer screening procedures identify compliance as a determining factor in the equation. For FOBT alone to be the most cost-effective method, compliance must be 80% to equal the mortality reduction achieved with one-time colonoscopy at 50% compliance or with annual FOBT plus periodic sigmoidoscopy at 60% compliance. If compliance with annual FOBT is less than 50%, it is no longer cost-effective compared with annual FOBT plus periodic sigmoidoscopy or even with one-time colonoscopy. [ 22 ]

Reimbursement: Medicare only began covering colorectal cancer screening for average-risk individuals in 1998. By congressional law, Medicare is directed to pay for FOBT annually and flexible sigmoidoscopy every four years for those at average risk, when ordered by the attending physician. Medicare covers screening colonoscopy once every two years for high-risk patients only. Barium enema may be covered as an alternative to colonoscopy under special circumstances, as determined by the physician.

Reimbursement rates under Medicare and private insurance plans (HMOs and traditional indemnity) vary by type of provider and location within the state, but are almost universally less than the actual charges for colorectal screening tests. While statewide comparison data are not available, Medicare’s reimbursement rates can be less than 30% of the usual fees charged; in no case were reimbursements found to be as high as 50%.

Medicaid legislation authorizes, but does not require, the states to cover colorectal cancer screening under their respective programs. Some states cover the procedures in the context of diagnosis but not as screening. Texas’ Medicaid plan reimburses FOBT, flexible sigmoidoscopy and colonoscopy in varying amounts, depending on the context of each medical case, but at rates that are well below half the usual charges for these procedures.

Commercial health plan providers express interest in positive outcomes as well as concern for financial impacts, but they often see long-term prevention programs as a cost that may not “pay off “ until far into the future, if at all — a perspective that influences their willingness to cover screening procedures. Physicians and facilities providing these services when they are not fully reimbursed must either absorb the uncovered costs or pass them back to their patients. These facts may diminish the frequency and enthusiasm with which colorectal cancer screening is recommended to constituents.

The presence and type of health insurance has been statistically associated with stage at diagnosis, significantly increasing the odds that patients who are uninsured or insured by Medicaid will not have a diagnosis of their colorectal cancer until it is in a late stage. [ 23 ] In addition to screening, the reimbursement structure defines how treatment and supportive services for cancer patients are delivered, both by government programs and by negotiated health plans. Coverage is often limited or not provided at all for symptom control, pain management, treatment for depression and other related needs, as well as for hospice services. Patients who have advanced disease and are near the end of life sometimes must go to acute care facilities or nursing homes [ 24 ] when a hospice would be more appropriate to their needs, and more cost-effective.

Policy Issues: The impact of the change in Medicare policy to reimburse for colorectal cancer screening is being tracked by the American College of Gastroenterology Colorectal Cancer Screening Registry, which has documented an increase in colorectal cancer screening and subsequent cancer detection among asymptomatic patients with no prior history of colorectal neoplasia. [ 25 ] It would be highly desirable if a legislative mandate for colorectal cancer screening, similar to the one now in place for mammography, received broad support in Texas. Such a requirement has been enacted by the Commonwealth of Virginia, effective July 1, 2000, and stipulates that health insurers, HMOs, corporations providing healthcare coverage subscription contracts, their state employees’ health insurance program and the Virginia Medicaid program provide coverage for colorectal cancer screening in accordance with the most recently published recommendations established by the American College of Gastroenterology in consultation with the American Cancer Society. Further, it explicitly states that the coverage cannot be more restrictive than, or separate from, coverage provided for any other illness, condition or disorder. Over the long term, colorectal cancer screening may reduce costs attributable to the care of patients with advanced colorectal cancer, but at present the full financial impact of such a mandate is not known.

Managed care plan providers also amass great amounts of data about utilization patterns and outcomes that would be valuable in improving care and prevention. Incorporating colorectal cancer screening into the Health Plan Employer Data and Information Set List of Measures as an assessment criterion for managed care organizations could serve as a powerful implementation incentive. HEDIS, utilized by the National Committee for Quality Assurance in its accreditation process, provides assessment criteria for Medicaid, Medicare and commercial health plans in effectiveness of care, access/availability of care, use of services, satisfaction with the experience of care and cost. Although voluntary, the program is widely regarded as an objective measure of health plan quality. Screening for breast and cervical cancers is among the measures now in place, and inclusion of colorectal cancer screening has been suggested as a way to influence health plans to begin or increase such coverage.

Cancer patients in the current healthcare reality are sent home from the hospital earlier and sicker, and family members are not as available as in the past to assume caregiving responsibilities at home. Moreover, Medicare has cut back dramatically on reimbursements for home care services, and in recent years a large percentage of home health agencies have gone out of business. Medicaid is only available to the extremely poor, with communities left to find the resources to care for those who are not eligible and have no insurance. Texas is among the twelve states whose combined federal and state Medicaid funding is lowest — in 1996 (when the most recent analysis was done), Texas Medicaid recipients overall received only 80% of the amount spent on average nationally; Texas beneficiaries aged 65 or older received only 72% of the national average. [ 26 ]

Health policy at the state level is thought by many to be the arena where the most knowledgeable, insightful and, in the end, visionary progress can be made to reduce colorectal cancer incidence and deaths.