5 Cost considerations

5 Cost considerations

Cost evidence

5.1 The sponsor presented 1 unpublished economic study set in an English hospital as evidence for the evaluation (Richards and Nnadi 2013), which was submitted to the Committee as academic-in-confidence. The External Assessment Centre judged that the study was relevant to the scope of the evaluation and found no additional relevant studies.

5.2 The sponsor submitted a de novo cost analysis comparing the cost consequences of using the MAGEC system with 1 type of conventional growth rod (Expedium 4.5 Spine System, Depuy Synthes). Costs were modelled from an NHS and personal social services perspective. The population included in the model was children aged 2 to 11 years with severe early-onset scoliosis. The model adopted a cost-minimisation approach based on an assumption of equivalent clinical efficacy between the MAGEC system and conventional growth rods. The model included the cumulative costs associated with initial surgery, device failure and rod lengthenings over a 6-year time horizon.

5.3 The model included 2 clinical parameters: device failure rate and frequency of lengthening. The sponsor used a device failure rate of 0% for both the MAGEC and conventional growth rods in its base-case analysis, based on clinical evidence. Frequency of lengthening was assumed in the model to be 3-monthly for the MAGEC system. Conventional growth rods were assumed to be lengthened every 6 months.

5.4 The sponsor took most of the resource use figures for its model from the study by Richards and Nnadi (2013). The cost of device failure in the sponsor's model was estimated to be around £11,000 less than the cost of initial insertion for both the MAGEC system and conventional growth rods, based on complete replacement of the rods. This cost included device costs and surgical time only and did not take into account other costs incurred such as pre- or post-operative care. A cost per lengthening was also included, based on an average of 2 figures taken from an NHS trust and from Richards and Nnadi (2013) for the MAGEC system and from Richards and Nnadi (2013) only for conventional growth rods. These costs are currently academic-in-confidence and cannot be reported here.

5.5 The sponsor carried out sensitivity analyses by varying the device failure rate. The device failure rate was 0% in the base-case analysis and 8.8% and 17.2% in 2 scenario analyses. All device failures were assumed to occur in the first month only. A third sensitivity analysis was included, using a device failure rate of 8.8% with an additional failure rate for conventional growth rods of 176% per child at month 13, based on a study by Yang et al. (2011). The External Assessment Centre noted that this figure was calculated based on the total number of rod fractures in children experiencing any rod fractures (86 fractures in 49 children), and not the study population as a whole (327 children), which would give an overall rod fracture rate of 15%.

5.6 The results of the sponsor's base case suggested that the MAGEC system was cost saving at 6 years, with a break-even point 39 months after initial insertion. From the sponsor's model, the cost saving for the MAGEC system compared with conventional growth rods at 6 years was £9946. Results of the sensitivity analysis indicated that the model was robust and the MAGEC system remained cost saving over the 6-year time horizon. The month of break-even varied from 28 to 45 and the cost savings ranged from £8109 to £12,984.

5.7 The External Assessment Centre considered that the sponsor's model used an appropriate treatment pathway and captured key aspects of treatment. However, it noted a weakness of the model was the assumption of clinical equivalence between the MAGEC system and conventional growth rods. The External Assessment Centre considered that the available evidence did not support this assumption.

5.8 The External Assessment Centre also considered that many of the inputs to the sponsor's model were incorrect. In some instances it judged that the sponsor had taken the wrong cost from Richards and Nnadi (2013), and in others that the Personal Social Services Research Unit (2012) unit costs of health and social care would have been more accurate. Sensitivity analyses were only carried out on 1 parameter in the sponsor's model and no adverse events other than complete device failure in the first month were considered. The External Assessment Centre considered that the costs for insertion should also be used when device failure occurred. The External Assessment Centre also noted that no discounting was applied in the sponsor's model.

5.9 The External Assessment Centre revised the sponsor's model to address some of the limitations identified:

  • A monthly device failure rate was applied throughout the 6-year time horizon, taken from clinical evidence.

  • Surgical site infections were also included in the model. The infection rate was taken from clinical evidence and included at month 0 for the MAGEC system and as a monthly rate for conventional growth rods to account for lengthening procedures.

  • The difference in the proportion of dual and single rods was introduced into the model for both systems, based on the proportions used in the clinical evidence. Dual rods were assumed to be used in 65% of children with scoliosis and costs were weighted accordingly.

  • A proportional cost for distraction was included at each month to allow for wider sensitivity analysis. Distraction was assumed to take place every 3 months for MAGEC and every 6 months for conventional growth rods.

  • The costs for initial rod insertion and for complete device failure were assumed to be the same. This was calculated as £27,431 for the MAGEC system and £15,270 for conventional growth rods.

  • Costs were discounted by 3.5% in line with the NICE medical technologies evaluation methods guide.

5.10 Results of the base case in the revised model showed that the MAGEC system generated cost savings of £12,077 after 6 years compared with conventional growth rods. The findings showed that the MAGEC system would become cost saving at month 35 after insertion.

5.11 The External Assessment Centre carried out extensive 1- and 2-way sensitivity analyses on most of the model inputs. This included varying: the costs and months between distractions, cost and rate of device failure, costs of insertion and device failure for each system, and costs and rates of infection.

5.12 The results of the 1-way sensitivity analysis showed that the cost difference was most sensitive to the cost of and interval between distractions for conventional growth rods. Varying the cost of conventional growth rod distraction to its lowest value, £1133, led to the MAGEC system incurring costs after 6 years. Varying the months between distractions indicated that the MAGEC system would incur costs if the interval between conventional growth rod distractions was 10.2 months or more. Expert advice obtained by the External Assessment Centre was that conventional growth rod lengthening generally occurs at 6-monthly intervals in the NHS and so this would make the MAGEC system likely to be cost saving. In all other scenarios examined, the MAGEC system remained cost saving.

5.13 In the 2-way sensitivity analyses, varying the cost of conventional growth rod lengthening to the lower range of values and increasing the months between distractions caused the MAGEC system to become cost-incurring. This is consistent with results from the 1-way sensitivity analysis. According to the model, if conventional growth rod distractions were carried out every 6 months, the cost of distraction surgery would have to be below £1579 per episode before the MAGEC system incurred costs. Based on clinical advice and cost data, the External Assessment Centre judged that the average cost of distraction surgery was unlikely to be this low in practice.

5.14 Lowering the insertion cost of conventional growth rods and raising it for the MAGEC system caused the MAGEC system to become cost-incurring. However, the External Assessment Centre obtained expert advice which indicated that, in practice, the resource use for initial insertion of MAGEC system rods was likely to be equivalent to that of conventional growth rods. Therefore, it was unlikely that the cost of inserting the MAGEC system would be so much more than the cost of inserting conventional growth rods that it would become cost-incurring. The External Assessment Centre judged it unlikely that the cheapest available conventional growth rods would be used in all instances, also based on clinical expert advice.

5.15 The External Assessment Centre also varied the time horizon for the model in light of advice from 2 clinical experts who stated that the overall treatment time would vary depending on the child's age at the start of treatment and the time to achieve spinal maturity. Furthermore, rods may need replacement if the child's spinal growth exceeds the maximum lengthening capacity of the rods. The External Assessment Centre carried out analysis to explore the impact of replacing rods at different time periods between 3.5 and 5 years after initial insertion. Both systems were assumed to be replaced in the same month. Rod replacement meant that the MAGEC system would become cost saving at around 68 months (5.5–6 years) after initial insertion. If the duration of treatment was longer, the cumulative cost savings would increase over time. The findings also suggested that the MAGEC system would generate cost savings if used to replace conventional growth rods in children with more than 35 months of growth potential remaining. The External Assessment Centre judged that based on clinical and economic evidence and clinical expert advice, the typical length of treatment using growth rods is likely to be 35 months or longer. This indicates that the MAGEC system would be cost saving when compared with conventional growth rods, as in the base case.

5.16 The External Assessment Centre concluded that many of the uncertainties around the model inputs had been addressed in the sensitivity analysis and that the results of the base case were robust. The External Assessment Centre also noted that the results from the revised model were similar to the sponsor's base case despite revisions to many of the inputs. However, the External Assessment Centre acknowledged that the model assumed clinical equivalence between the MAGEC system and conventional growth rods when the available clinical evidence could not inform this assumption. It also noted that many of the model costs were taken from 1 unpublished study (Richards and Nnadi 2013), which may not be generalisable because this study was set in a single centre.

Committee considerations

5.17 The Committee noted that the revisions to the model prepared by the External Assessment Centre relied on costs from 1 unpublished study. However, the Committee considered that the extensive sensitivity analyses conducted by the External Assessment Centre and the expert advice it sought, addressed many of the uncertainties in the economic evidence. The Committee judged the findings from these revisions to be sufficiently robust to allow a decision to be made and concluded that cost savings were likely to be realised in practice.

5.18 The Committee heard expert advice that the frequency of distractions using the MAGEC system may increase in future as clinical use of the product develops. The External Assessment Centre therefore recalculated the findings from the revised model using a 6-week distraction interval and concluded that even with more frequent distractions, the MAGEC system would still generate cost savings of more than £7000 over the 6-year time horizon.

5.19 The Committee considered the impact of the potential reduction in spinal cord monitoring during rod lengthening procedures (see section 4.5), which had not been considered in the sponsor's model. The External Assessment Centre investigated the use of spinal cord monitoring in conventional rod lengthenings and found variation in practice, with some centres using it routinely and others not using it at all. It also found that the modality of spinal cord monitoring varied. Through a review of the available literature, the External Assessment Centre identified a range of spinal cord monitoring costs. It subsequently incorporated these costs in the revised model for all conventional growth rod lengthenings. It found that not using spinal cord monitoring for MAGEC system rod lengthenings would generate cost savings of £13,170 per child over the 6-year time horizon if spinal cord monitoring cost £120 per lengthening procedure (the lowest cost identified), or £15,327 per child if it cost £343 per lengthening procedure (the highest cost identified). The Committee concluded that the base-case saving of around £12,077 per child after 6 years was likely to be conservative because it did not include the impact of these costs.

5.20 The Committee noted that it may not be cost saving to use the MAGEC system in older children with less than 35 months' growth potential, because the system is estimated to become cost saving only after about 35 months. The Committee judged that use of the system in older children would need careful patient selection, with consideration of individual circumstances and benefits.

  • National Institute for Health and Care Excellence (NICE)