Cost-Benefit Analysis of Corneal Transplant

Date Posted : September 9, 2013

Corneal transplant has restored vision to hundreds of thousands of people in the U.S. and abroad. The surgical procedure not only restores vision, but also relieves pain and suffering caused by injured and diseased cornea. While the transplant procedure is usually completed within an hour, its positive impact can last a lifetime. In addition to restoration of sight, corneal transplant avoids higher medical cost, opportunity cost of lost productivity, and potential long term care cost, all by eliminating blindness or major visual impairment. Therefore, in this study, using private and Medicare claims data, combined with evidence from the most recent literature, we compare the cost and benefit of corneal transplant. This cost-benefit analysis shows that the net lifetime benefit of the procedure is overwhelmingly greater than the costs of the procedure.

In evaluating costs and benefits of corneal transplant, we examine the medical cost associated with corneal transplantation procedure, which includes the cost of the procedure itself and the cost of care associated with the transplant for three months before and a year after the surgery. We estimate a per-patient average cost of corneal transplant of $16,500; this reflects all related expenses, including corneal tissue, surgeon and anesthesia services, facility costs, pre-operative care, and related services for a year after the transplant.

Because transplantation is the treatment of last resort for those suffering from corneal disease or injury, when evaluating benefits, we consider blindness as the alternative to corneal transplant procedure. Therefore, we use costs of blindness as a proxy for the benefits of corneal transplant, and we assume that the benefits will remain with the patient for the remainder of his or her life. Direct medical costs attributed to blindness include medical care and long term care; these average $77,000 over the course of a person’s life.

Indirect benefits include avoided cost of lost productivity incurred by the patients due to their reduced income and by their caregiver(s) due to provision of informal care. We estimate that an average person whose vision has been restored through a corneal transplant procedure will avoid about $214,000 in indirect costs over the course of his or her life . This analysis assumes a uniform retirement at age 65, and thus may understate the true cost of lost productivity. The Census Bureau found that 31% of people aged 65-69, and over 16% of all Americans over 65, continued to work in 2010. Furthermore, as corneal transplantation avoids cost due to reduced earnings, it also avoids income tax losses to the government and transfer payments funded by tax receipts. We estimate net benefit of corneal transplant by comparing the cost of corneal transplant with the total of direct and indirect costs avoided. Since we use real dollars to estimate the NPV of costs that are projected over a lifetime, it is not surprising that those in the age group of 40-64 have the highest net positive economic impact of corneal transplant. This group incurs the largest per-person loss of productivity due to low vision, because of its higher per-person earned income.

Although the net benefit of corneal transplantation for those aged 65 and above is smaller than that in the younger age groups, the benefits associated with providing access to corneal transplant procedures for the oldest age group cannot be ignored. Since 75% of all patients that receive corneal transplant are of age 65 and older and 83% of all Medicare beneficiaries are in this age group, the net direct medical benefit of $67,500 shows the potential for significant savings for Medicare if blindness is avoided.

The literature shows that, based on direct medical costs, eye disorders as a group of conditions are the fifth costliest to the U.S. economy after heart disease, cancer, emotional disorders and pulmonary conditions. While not all eye disorders can be prevented or cured by corneal transplant, the significant net societal benefit of those that can be impacted demonstrates the importance of this sight-saving surgery to the patients, their families, and society. Total societal net benefit of corneal transplant, calculated by combining the number of patients projected to receive corneal transplant procedures in 2013 with the estimated lifetime net benefit of these procedures, is estimated to be nearly $6 billion.

In this report, Cost-Benefit Analysis of Corneal Transplant, we observe that the economic benefit of corneal transplant surpasses the cost by more than five-to-one among the Medicare population and nearly 18-to-one among younger patients. The high net benefit of corneal transplant, demonstrates the importance of this procedure, which not only restores sight for the patient, improves his or her functionality and quality of life, but also provides great economic benefit to the patient, the family, and to society.

Client Area: Associations
Expertise Area: Chronic Disease / Cost of Illness

share

"Throughout the engagement, Lewin consultants listened to us and delivered superb analyses and thoughtful guidance–not canned solutions.
— NONPROFIT HEALTH SYSTEM