Newborn Circumcision: An Economic Perspective

Should a policy of newborn prophylactic circumcision be recommended for the newborn male population of Canada? Should taxpayers shoulder the costs of this procedure? In a review article Warner and Strashin¹ claimed that the procedure is good policy for both health and economic reasons. The Fetus and Newborn Committee of the Canadian Paediatric Society has commented on the inadequacy of the data presented by these authors regarding health benefits and risks.² Also, the American Academy of Pediatrics has stated that routine circumcision of the newborn lacks medical justification.³ The purpose of this paper is to examine the evidence for economic benefits resulting from this procedure.

Two steps are required before any medical therapy or surgical procedure can be recommended as good policy. First, the efficacy of the procedure must be established: Does it do more harm than good to those receiving it? The second step — economic evaluation — is usually indicated only for maneuvers of known efficacy.

The economic evaluation involves comparative analysis of the costs and consequences of alternative courses of action. Methods for such evaluation can be found in the works of Weinstein and Stason,⁴, Shepard and Thompson,⁵ and Drummond.⁶

The reality is that, in the near future, scientists are unlikely to resolve the question of the health efficacy of newborn circumcision. However, because the procedure is both widespread and publicly funded in Ontario,⁷ we propose a modified economic analysis to assist in clarifying the conclusions reached by Warner and Strashin. Costs can indicated the minimal, threshold amount of health benefit, measured in dollars, that would justify the procedure on economic grounds. The magnitude of this amount can be compared with benefits of other programs as an estimate of the likelihood of a procedures being cost-beneficial.

Methods

The first step in assessing the cost-benefit of prophylactic circumcision of male infants younger than 10 days is to determine the dollar costs of the procedure to the health care system. We have conservatively assumed no medical or surgical complications in this analysis. We measured costs in all three Hamilton, Ont. hospitals where the procedure is performed (McMaster University Medical Centre, Henderson General Hospital and St. Josephs Hospital).

The cost of physician billings was taken from the 1983 Ontario Health Insurance Plan schedule of benefits for physicians services.⁷

To determine the cost of the nurse assistant, we first estimated the time contributed and then converted the time units into monetary values. Although the amount of time varied from doctor to doctor, each hospital unit agreed that 30 minutes per circumcision represented a reasonable estimate. For each hospital the mean yearly salary of nurses involved in circumcisions was estimated, and benefits (20% to 30%) for 1983 salaries were assessed by the personnel supervisor. An estimate of benefits per hour was then calculated and was added to the mean hourly wage; the sum was divided in half as the cost for 30 minutes.

A list of objects on circumcision trays was obtained from the supplies department of the hospital. Each item was costed by a consultant from American Hospital Supplies, Ltd. The cost of processing, assembling, autoclaving and dispatching, also estimated by the supplies department of each hospital was added. The total cost for each tray was calculated in 1983 dollars.

Costs of space and overhead dedicated to circumcision were calculated (Table 1). The floor space for each procedure room was obtained from either the neonatal unit or the hospital engineering department using data available from an extensive cost-analysis survey carried out in 1978.⁸ This survey supplied total area per hospital, cost of plant operation, cost of housekeeping, cost of building depreciation, and opportunity cost on building depreciation per hospital. The costs were summed for each hospital, and the total figure for the hospital was divided by the total number of circumcisions that actually took place in that procedure room in the fiscal year 1978-79. To convert the 1978 figure to 1983 figures, we employed a Statistics Canada price index.⁹

Results and discussion

The average cost of performing neonatal circumcision varied from $36.55 to $41.82 in the three hospitals, with a mean of $38.32 (Table II).

These cost data can be regarded as generalizable to the Province of Ontario: physician billing, which is more than 50% of the overall cost, is constant, and the costs of the circumcision tray and nursing time are not likely to vary dramatically. The only component that may vary dramatically is the cost of space and the cost of the circumcision procedure room. However, this cost is only 5% to 12% of the total cost. Thus, even if this cost in another locale were twice the amount calculated in Table I, the total cost would be increased only by 5% to 12%. Discussion with hospital administrators suggests that, overall, their time represents no more than 1% of the total cost of the procedure. Because determining the exact cost of their time from hospital records is probably impossible, ad our conclusions would not be changed anyway, we omitted this figures.

 

 

Prophylactic procedures are an investment: the costs occur now and the benefits occur later. Warner and Strashin summarized the benefits of neonatal circumcision as facilitation of penile hygiene, prevention of carcinoma of the penis, decrease in the incidence of sexually transmitted disease, prevention of phimosis, paraphimosis, and balanitis, and prevention of pain, psychologic effects and anesthetic risks associated with later circumcision.

The most serious disease that neonatal circumcision is claimed to prevent is cancer of the penis. Almost all cases of the disease occur in men older than 50 years.¹⁰ Therefore, for our analysis we used 50 to 60 years as the average age of onset. The incidence of penile carcinoma in this age group is 2/100 000 annually.¹⁰ Using these figures and data on the cost of circumcision, one can easily calculate the minimal magnitude of benefits that would justify, on economic grounds, a recommendation to circumcise male newborns, assuming that the only benefit from circumcision is prevention of cancer of the penis.

 

 

The cost of circumcising 100 000 newborns (without any complications) is just over $3.8 million. Invested at a 4% real interest rate (assuming no inflation), this amount would grow in 50 years to $27.2 million. If neonatal circumcision prevented both expected cases of cancer of the penis in this cohort, the real cost of treatment and foregone earnings for a case of cancer in a 50-year-old man is $103,000. In other words, the break-even amount is more than 100 times the cost of the disease.

Other diseases possibly prevented by circumcision, such as balanitis, paraphimosis and phimosis, are much less serious than penile carcinoma, and the effect of circumcision in terms of cases prevented is unknown.¹ It is not reasonable to expect that the dollar benefits generated by prevention in these cases would approach $13 million.

By comparison, the costs per case detected, diagnosed and treated (prevented) in a phenylketonuria screening program in New York State have been reported to be $38,000. Torrance and Zipursky¹³ have recently reported the total cost of preventing Rh diseae of newborns: antepartum treatment with anti-immunoglobulin was estimated to be $2300 and $5900 for primiparous and multiparous mothers respectively.

Warner and Strashins second economic argument for performing neonatal circumcision is an annual saving of more than $5.3 million for Ontario and more than $18 million for all of Canada by prevention of later therapeutic circumcision for various health problems. (other than carcinoma of the penis). They estimated that the cost of circumcising all newborn boys in the province would be $2.1 million and that the cost of 4627 therapeutic circumcisions performed was $7.4 million. They merely subtracted the former cost from the latter in reaching an estimate of the net benefits. However, they overlooked the fact that the costs of prophylactic surgery occur now and the costs of therapeutic circumcision occur in the future. Future dollar savings must be discounted before they can be compared with present costs. We conclude that the monetary benefits of a policy of circumcising newborns will never exceed the costs and that such a policy cannot be justified on economic grounds.

A complete economic analysis would answer the following questions: Do the total economic benefits of the policy exceed the total costs? If they do is the policy of allocated limited health care resources to the procedure a wise choice. That is, could the resources be more beneficially used in another way. — for example, to promote immunization of children? Our analysis, suggests that such an extensive cost-benefit analysis of circumcision is not warranted and that this procedure is not economically beneficial to the Ontario health care system or the taxpayers who fund the system.

If one considers only the strength of available evidence regarding health benefits and our economic analysis, then the public funding of neonatal circumcision through provincial health insurance programs is a policy of dubious merit. However, one must also consider the value that members of society place on having this service supplied as part of the health care system for reasons other than health or economic benefits.

As health advisers, individual physicians can attempt to rationalize decisions by making new parents aware of the health and economic facts. Both physician and parents should explicitly recognize that their decision about circumcision of a newborn is almost exclusively a choice based on their values and preferences.

The dilemmaa for the public policymaker is more difficult: Should the public pay out of limited resources for a procedure that is of unproved health benefit and almost certainly without economic benefit? Clearly, the answer once again depends on taxpayers values and preferences (once they are fully informed of health benefits and economic costs), which must be balanced against the cost of using resources another way.

The Canadian health care system has goals of equity in access to preferred care, effectiveness in health terms and efficiency in economic terms. On the basis of current information, the equity component of these goals is the only possible justification of publicly funded prophylactic newborn circumcision. To our knowledge this element has not been scientifically measured. We submit that, until demonstrated otherwise, prophylactic neonatal circumcision should be regarded as cosmetic surgery, paid for directly by parents wishing it, and that public health care dollars should be expended on preventive and therapeutic benefits of more certain health or economic benefit.

We are indebted to George Torrance and Michael Boyle for sharing cost data from Hamilton, Ont. hospitals and to Greg Stoddart for providing helpful advice.

Once of us (D.C.) is a recipient of the Ontario Minister of Health Scientist Award.

Reprint requests to Dr. David Cadman, Department of Pediatrics, McMaster University, 1200 Main St. W. Hamilton, Ont. L8N 3Z5

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