Health Services Research

PV QA 3 - Poster Viewing Q&A 3

TU_38_2975 - Entrepreneurial Prospect of Radiation Therapy Enterprise in Low and Middle-Income Countries

Tuesday, October 23
1:00 PM - 2:30 PM
Location: Innovation Hub, Exhibit Hall 3

Entrepreneurial Prospect of Radiation Therapy Enterprise in Low and Middle-Income Countries
O. C. Irabor1, A. Elzwaway2, and W. Ngwa1,3; 1Dana Farber Cancer Institute, Harvard Medical School, Boston, MA, 2International Campaign for Establishment and Development of Oncology Centers (ICEDOC), Port Said, Egypt, 3University of Massachussets, Lowell, MA

Purpose/Objective(s): The cost of scaling radiotherapy (RT) in Low and Middle-Income Countries LMICs is enormous and will require innovative financing models. A mix of entrepreneurial and global health initiatives collaborating with existing government institutions could be a way forward. However, RT entrepreneurship remains unexplored in many LMIC regions owing to questions about the viability and sustainability of the RT venture. Herein, we analyzed the economic prospect of a basic radiotherapy facility (BRF) established in an LMICs, with an aim to justify an entrepreneurial approach to global radiation oncology.

Materials/Methods: We estimated the cost of establishing a BRF in two major cost components: ‘upfront (capital) cost’ and ‘operational cost, using the IAEA and Lancet Commission estimates, and the IAEA RT Cost Estimator. Using a Cost-Volume-Profit Analysis model, we analyzed for the prospect of a break-even (BE), that is the point at which total cost of establishing and operating the BRF could equal total revenue it generates. We assumed brand new machines, equipment, and building meeting their average functional life, fulfilling their annual delivery capacity, and insured with maintenance plan in place.

Results: It will cost 5 to 6 million US$ to establish a BRF ($5,013,989) for our study. Annual operational cost is about 10% of upfront cost (5.5% - 15%). Based on these projections and economic assumptions, the BE time in years (t) for a BRF is related to the cost charged per RT course (f) and modeled as “t = 5E+06f-1.906 (R-square = 0.99). Also, the percent return on investment (%ROI) as a function of cost per RT course fits the model “%ROI = 0.003f - 2.5101” for a 15-year investment period (e.g., LINAC-based BRF) and “%ROI =0.004f - 3.0604” for a 20-year investment period (e.g., Cobalt based BRF). Which means a BRF able to deliver its annual treatment capacity may be viable at a minimum user-fee (f0) of $840/RT course if LINAC-based and $760/RT course if Cobalt-based.

Conclusion: RT entrepreneurship may be economically viable in some LMICs if managed below a minimal upfront and operational cost, operates at a specified treatment volume and cost, with strategic negotiation that consider the interests of stakeholders in the real world. The cost estimation used in this study is an example of the published data, but not representing the variability in each case and each deal. Moreover, every scientific effort should be done to explore how to reduce the total cost of the course without compromising the outcome, hence, to get better value care. An LMIC specific feasibility study is, however, necessary to fully justify the investment in each country. Such study must focus on the prospect of attaining minimum treatment volume within the region, the capacity for the potential clients to pay the f0 needed for business viability, and other strategies to reduce f0 such as choice of equipment, donations, and public-private partnership.

Author Disclosure: O.C. Irabor: None. W. Ngwa: None.

Omoruyi Irabor, MD, MPH

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