In this discussion, I will be analyzing the demand for Mohs micrographic surgery in British Columbia. Mohs micrographic surgery is named after its inventor, Dr. Frederic Mohs, who first described the technique in 1941 (Alai, 2006). It is a unique surgical procedure that removes skin cancer, one tissue layer at a time, using local anaesthesia. Once a cancerous tissue layer is removed from the patient, its edges are marked with colored dyes, and a map of the tissue is created.
The tissue is then frozen, cut into sections using a cryostat, placed onto microscope slides, and stained with special dyes by a Mohs histotechnician. The slides are then carefully examined under the microscope by the Mohs surgeon so that any microscopic roots of the cancer can be accurately identified and mapped. If there are remaining cancer cells on the margin on the tissue then an additional tissue layer is removed (See Figure 1, A. C. M. S, 2002). The process is designed to keep as much healthy skin intact as possible.
Patients are usually in the waiting room for most of the day while their tissue is being processed and “read”. Once the cancer has been removed, the Mohs surgeon will explain options for repair of the wound These include plastic surgery techniques such as stitching the wound together using a side-to-side closure, or using a skin flap or graft. Mohs Surgeons are often plastic surgeons and/or dermatologists that also have completed one to two year American College of Mohs Surgery (ACMS) fellowship training program.
The majority of Mohs cases are performed in private clinics, and there is only one in British Columbia located at The Skin Care Center near Vancouver General Hospital. The clinic has a monopoly in B. C, but there are 11 other clinics in Canada, and dozens in the United States. At the Skin Care Center, there are two full time surgeons, two histotechnicians, and two nurses that treat around forty-five patients per week. The demand for this service is very high with a waitlist of ten months.
Because Mohs surgery combines a very high cure rate with good preservation of normal skin, and is repaired by a plastic surgeon, is it a very valuable product. The customers of this product at The Skin Care Center are British Columbians (>95%), Caucasians (98%), 55% females/45% males, ranging from 19-100 years old with an average age of 64 (The Skin Care Center, 2011). The greatest determinant escalating the demand for Mohs is the increasing age of the population. The chance of developing skin cancer in British Columbia is about 1 in 7, and odds increase with age (BC Cancer Agency, 2011).
According to the ACMS, skin cancer is an “under-recognized epidemic” (Jesitus, 2010). The low supply of Mohs Clinics is unable to keep up with this increasing demand. There is a limited supply of Mohs surgeons in North America, approximately only 1,000 (ACMS, 2011). Like all other developed nations, Canada is experiencing an extraordinary age shift in the population, which is dramatically increasing cancer rates and thus the demand for Mohs. The number of people aged 60 and over is expected to rise by more than half by 2030. (Diffey, 2005) See figure 2. This is courtesy of the baby boom between 1947 and 1966.
Another variable that influences the demand of this product is ethnicities in the population. As mentioned before, The Skin Care Center treats around 98% Caucasian patients. Where a skin cancer, such as melanoma, is relatively uncommon in African Americans, Latinos, and Asians, one in 39 Caucasian men and one in 58 Caucasian women will develop it in their lifetimes (Jemal, 2010). An increase or decrease in Caucasians in BC would affect the demand for Mohs significantly. The price of related goods, or alternative skin cancer treatments, is another demand shifter for Mohs.
Some alternative treatments include; local radiation, prescription topical creams, curettage (remove by scraping/scooping), desiccation (scrape and burn), regular surgery, chemotherapy creams or injections, cryosurgery (deep freezing), and photodynamic therapy (uses a type of light and a light-activated chemical called a photosenzitizer)(Alai, 2006). With regular or traditional surgery, only about 1%-3% of the tumor margins are actually examined, thereby increasing the chances that a small tumor root would be missed and left behind.
Mohs allows for examination of 100% of the tumor margins thereby reducing the chance that tumor cells that will be left behind. The cure rate using Mohs surgery is between 97% and 99. 8% for primary basal cell carcinoma, the most common types of skin cancer ( Mikhail and Mohs, 1991). This rate is much higher than other treatment methods, which increases the value (and demand) of Mohs to patients. When assessing the cost-effectiveness of Mohs surgery there are several factors to consider. Due to the number of specialists involved, as well as the complicated nature of the procedure, it is often more expensive than other treatment methods.
Patients that do not do their research may chose alternative methods for this reason. Educated patients would discover that because of the procedure’s high success rate, most patients require only a single surgery. Initially other methods might be less expensive, but they often require additional surgeries and pathology. Non-Mohs treatments have a five year recurrence rates of up to 10-12% and up to 50% recurrence rates for rare skin cancers. With Mohs, you are paying a single fee and getting a better result.
The value of Mohs treatment may also bee seen as higher compared to other treatments because it minimizes the amount of healthy tissue removed, and reduces the impact to the surrounding area. The aesthetic outcome of the surgery is optimized which is very important to most people (the cosmetic surgery aspect of Mohs will be discussed in the next section). In addition, the psychological impact of enduring multiple procedures when cancer recurs can be significant. Patients find it reassuring to know that their cancer has been treated with a single procedure that gives them the highest possible chance of complete cure (ACMS, 2011).
Mohs surgery is relatively inelastic, as changes in price have a relatively small effect on the quantity of the good demanded. It could also be considered a luxury good because of the plastic surgery component that is included. Some cancers may be very simple to remove with alternative, less expensive treatments, and therefore paying more just for the cosmetic appearance makes it a luxury good (as it is not essential). The more expensive service is perceived as better than alternative, less expensive treatments could be related to prestige, status, and perceived quality.
As price increases, rather than substituting with the next best service/treatment, that is available at a lower price, many consumers of certain luxury goods pay more to support their belief that they have purchased the best. It is possible that an increase in price in Mohs could lead to an increased demand because of the value people place on it. An example to support this is the face that often times with facial plastic surgery an increase in price leads to increase in the demand for the procedures. Luxury goods like this have an upward sloping demand curve (Alsarraf, et al.,2002).
Consumers that value their appearance and health are highly unlikely to choose a cheaper treatment option. The increasing popularity of plastic surgery, or vanity, in North America may be a demand driver for Mohs surgery as they are so closely related. The increasing demand for cosmetic procedures in concurrence with Mohs makes them complements of each other. Ageing population, skin cancer rates, proportion of Caucasians in the population, and cosmetic surgery popularity are the most significant demand determinants of Mohs surgery.
Examples of some other less significant variables include sun exposure, education (with regards to UV protection), price of sunscreen, and population income. Due to the value patients see in this product, the price is relatively inelastic and the potential to grow this business in B. C and Canada is enormous. Fig 1. Mohs Surgery Process (A. C. M. S, 2002) Fig 2. The relative numbers of patients presenting with non-melanoma skin cancer. (Diffey, 2005) References: American College of Mohs Surgery. (2002). Mohs Surgery Patient Education. Available: http://www. skincancermohssurgery. org/. Last accessed November 7, 2011.
Alai, N.. (2006). Mohs Surgery. Available: http://www. medicinenet. com/mohs_surgery/article. htm. Last accessed November 8, 2011. Alsarraf, R. et al.. (2002). Cosmetic Surgery Procedures as Luxury Goods. American Facial Pastic Surgery. Vol 4, 105-110. B. C Cancer Agency (2011). Skin Cancer: Non-Melanoma. Available:
http://www. bccancer. bc. ca/PPI/TypesofCancer/SkinNonMelanoma/default. htm. Last accessed November 9, 2011) Diffey, B. L.. (2005). Skin Cancer Incidence and the Aging Population. British Journal of Dermatology. 153 (3), 664-669. Jemal A, Siegel R, Xu J, Ward E. Cancer statistics 2010. CA-Cancer J Clin 2010.
Link. Accessed November 1, 2010 Jesitus, J.. (2010). Mohs Surgeons wrestle with increasing skin cancer rates, scrutiny by insurers. Available: http://www. modernmedicine. com/modernmedicine/Modern+Medicine+Now/Mohs-surgeons-wrestle-with-increasing-skin-cancer-/ArticleStandard/Article/detail/692414. Last accessed November 8,2011. Mikhail, George R. ; Mohs, Frederic Edward (1991). Mohs micrographic surgery. Philadelphia: W. B. Saunders. p. 4. ISBN 978-0-7216-3415-9. Mooney,M.. (2011). Mohs Micrographic Surgery. Available: http://emedicine. medscape. com/article/1125510-overview#a1. Last accessed.