The economic cost of illness in the Federal Republic of Germany in the year 1980

Possibilities and limits of modelling of long-range economic consequences of air pollution - A case study

Air pollution is the biggest environmental problem in modern societies, causing considerable health damage and requiring substantial financial resources for health care. The goal of the study is to demonstrate the adverse economic consequences of air pollution on example of a small, open Central European country, Hungary, and to provide quantified financial arguments for macroeconomic decision-making for the development of a long-term energy strategy. On the basis of the Cobb-Douglas production function and Solow-Swann model of dynamic economic systems a simple and robust model was constructed to estimate and predict economic losses, caused by the pollution. On base of results it is obvious, that on base of macroeconomic theory and combination of various, publicly available, quality-controlled statistical resources quantifiable models can be constructed to characterise the economic consequences of air pollution, but it should be taken into consideration, that the reliability of economic models considerably depends on their initial parameters and practical validity of assumptions, based on which the underlying economic theories were built. The most important economic burden of air pollution is caused by the loss of working-age population, resulting in a decrease of 4.1-9.4 % a year in Gross Domestic Product (GDP) in the next fifty years. The additional burden of health care costs amounts to 0.1 % of GDP. Reducing air pollution is not only a quality of life improvement but also an investment into the economic development. Notwithstanding of statistical biases it could be proven the importance of combination health economic and econometric methods in preparation of more efficient environmental-related socio-economic decisions.

Social preferences for the inclusion of indirect benefits in the evaluation of publicly funded health services: results from an Australian survey

The inclusion of both monetary and non-monetary indirect benefits in economic evaluations of public health programmes and services can have significant distributive effects between patient groups. As a result, some patients may be advantaged and others disadvantaged for reasons not directly related to health outcomes or (direct) treatment costs. In pluralistic democracies, there is a case for consulting the community on the fairness of policies that have such distributive implications. This paper reports the results of two pilot studies aimed at uncovering the preferences of the Australian public for the inclusion of indirect benefits in the evaluation of services for its national health scheme, Medicare. The initial survey found some support for taking account of non-monetary indirect benefits – for example, the social contribution made by parents of young children and carers of elderly relatives. By contrast, there was little support for giving high taxpayers priority access to general Medicare services, to life-saving organ transplants, or to very costly drugs, despite the indirect social benefits of doing so. However, such support increased significantly in the follow-up study when the outcomes were characterised as certain, identifiable and health related, and the opportunity costs of failing to take account of indirect benefits were made very clear. The follow-up survey provided evidence of public scepticism about the willingness or ability of government to use additional tax receipts for socially beneficial purposes, and/or a preference for programmes and services that focus on health rather than welfare more generally.

[Cost of illness studies as a basis for decision making]

Definitions and methods for cost of illness studies are explained: costs, direct costs, indirect costs, intangible costs, the human capital method and the willingness to pay approach. Devaluing the long-term health benefits from prevention by constant discount rates is questioned. The development and the state of the art of cost of illness studies at a national level in Germany are discussed. As an example the newly developed cost of illness study of the Federal Statistical Office with direct and indirect costs of circulatory diseases is presented. Reasons for the benefit of cost of illness studies for decision making are given in the context of costs of illness and aging.

A cross-national perspective on cost of illness: a comparison of studies from The Netherlands, Australia, Canada, Germany, United Kingdom, and Sweden

All Western health systems are in search of efficiency. Cost of illness (COI) studies can contribute to the efficiency debate by elucidating the relation between health expenditure and health status and population demography. Since the purpose of COI data being summarized in the OECD Health Data publications is to facilitate cross-national comparisons, it is important to assess the comparability. We compared COI data from six countries at macrolevel of total health expenditure and disaggregated the data from four countries to sectors such as hospitals, drugs, health professionals, and residential care. Although the distribution of health expenditure over major diseases showed similar patterns in all countries, overall comparability was bad. We conclude that the current scope of COI studies is bound to national levels because health care systems dominate the magnitude and distribution of health expenditure. Cross-national comparisons may be possible if data and methods are standardized, and COI estimates are made for a common comparable package.

Economic burden of hepatitis C in Canada and the potential impact of prevention. Results from a disease model

This Canadian hepatitis C model estimates economic burden of disease using Markov modeling to predict progression over 11 health states annually from 2001 to 2040. Incidence-based estimates help demonstrate the capability to determine cost-effectiveness of programs to prevent different proportions of incident cases. Benefits of prevention increase linearly with the number of incident cases prevented. The model forecasts annual health care costs for the treatment of HCV-related disease ranging from $103 to $158 million over time. Health care costs attributable to 2001 incidence cohort are forecast at $14.6 million for prevention. The increasing cost of HCV provides a framework for further analysis and implementation of long-term policies aimed at appropriate allocation of resources for health in Canada.

Evaluating the comparability of different grouping schemes for mortality and morbidity

Comparison of mortality and morbidity is a commonly used method in health related studies. The International Classification of Disease (ICD) consists of thousands of codes for classifying cause of death and disease categories. A grouping scheme is needed to cluster related categories into a meaningful and manageable number for comparative purposes. Different kinds of grouping schemes have been used; nevertheless, little is known about the comparability among different grouping schemes. In this study, we compared seven grouping schemes; five for mortality and two for morbidity. We found poor comparability between different grouping schemes. Different schemes covered different ranges of codes. Some schemes used the same title, but included different ranges of codes. Features of newly developed grouping schemes were to group disease categories of similar characteristics across traditional ICD chapters and to group disease categories based on health care needs, instead of those based merely on etiology or organ system. Different grouping schemes were developed to reveal the unique mortality and morbidity pattern of different geographical areas. Different grouping logic was used by different grouping schemes. Therefore, it is difficult to make a good comparison between different schemes. An investigator tabulating the mortality or morbidity figures based on a given grouping scheme should explicitly define the exact ICD codes included. Any user of data derived from different grouping schemes, especially for comparisons between countries, should be cautious about the comparability problems.

The cost of hepatitis C and the cost-effectiveness of its prevention

Hepatitis C infection is an emerging problem in public health and is now the most common blood-borne infection. The virus imposes a significant personal and social burden on those infected, as well as substantial costs to the health care system. In this paper we report an estimate of the costs of hepatitis C and consider the role such information might play in determining an appropriate preventive strategy. Preventing a single case of HCV would release resources valued Aus $6000 and Aus $19,000, depending on whether production loses were included. This information can be used to derive cost-effectiveness thresholds for any preventive activity, but is not in itself necessary in determining health priorities. Information on the marginal cost-effectiveness of preventive methods is both necessary and sufficient.

Production gains from health care: what should be included in cost-effectiveness analyses?

Recent literature has been concerned with the correct measurement of the 'indirect costs and benefits' of health care as well as the issue of including these items in economic evaluations. This article considers the question of which 'indirect benefits' to include in cost effectiveness analysis and cost utility analysis. Within the context of a collectively financed health scheme the relevant issues include not only the size of the net resource costs of providing health care but also which costs and benefits the society is prepared to consider in its assessment of health services. The strong preference for 'equal access for equal need' implies that some production gains may have to be disregarded in the social welfare function. We introduce the notion of socially relevant and socially irrelevant production gains. The analysis suggests that the magnitude of the socially relevant part of the production gains may vary between countries as it depends, first, upon differences in patients' potential contributions to the rest of society (tax rates), and second, the strength of preferences for equity.

Burden of illness estimates for priority setting: a debate revisited

This paper returns to the debate in this journal about a decade ago on the value of cost of illness (COI) and burden of illness (BOI) estimates in priority setting. Concern is expressed that there has been a resurgence of interest in calculating and using BOI estimates in such priority setting. It is especially concerning that this interest seems to have support from both the World Bank and the World Health Organisation (WHO) (although perhaps less so recently from the latter). It is argued that in terms of priorities for health services, BOI calculations are irrelevant except possibly in the context of some (less than ideal) concept of need in support of equity. If the need basis for equity is set in terms of 'capacity to benefit', then BOI calculations become even less relevant. There is an argument for some research funding being prioritised in terms of BOI but only when it is genuinely the case that there is total ignorance, beyond the size of the problem, about a particular policy or disease area. Such a level of ignorance will happen very seldom and then some fairly approximate estimates of BOI will suffice. It is better to concentrate in priority setting on estimating the costs and benefits of marginal changes than devoting scarce analytical resources to superfluous estimates of BOI.

Costs of mental illness in Britain

Cost of illness studies are a growing area of literature without a common methodology and their usefulness has been debated over the years. A short review carried out of the British studies on mental health revealed differences which originate from three main areas: the epidemiological evidence on prevalence, service contact data and the unit costs employed. This paper outlines the differences found in a number of these studies and we develop a worked example using information from the studies to illustrate the issues of concern. We conclude that the area is problematic in two fashions. Firstly, the results are highly sensitive to epidemiological data and assumptions on costs. Secondly, the assumptions on costs and use of services must always be made explicit.

Current and future costs of cancer

Cancer costs in the Netherlands amounted to 4.8% of health care costs in 1988. For five cancer types, and a sixth group covering all other malignancies, costs were broken down by age, sex and disease phase. They showed a remarkably similar pattern of medical consumption. Costs were linked to observed incidence, mortality and estimated prevalence, together allowing for prediction of future costs of cancer. In 2020, as a result of ageing, cancer costs will have increased much more rapidly than total health care costs, in particular for cancer of the lung and prostate. Colorectal cancer costs were predicted for epidemiological scenarios. Our model shows that an increase in future prevalence may bear quite different cost implications. If it is due to higher incidence, the costs will increase substantially. If due to survival improvement, the increase will be less prominent. Simply extrapolating costs based on future prevalence or mortality may produce serious errors.

Assessing the economic burden of injuries due to accidents: methodological problems illustrated with some examples from the literature

This paper provides a survey of methodological problems encountered in an assessment of the economic consequences of accidents in The Netherlands. A sound epidemiological basis for such calculations appears to be lacking due to inadequate data-registration systems. We also discuss some studies of the economic costs of injuries due to accidents for other countries, which have used either a prevalence or an incidence-based approach. It is highlighted that they may be helpful in indicating the relative economic burden posed on society but that they cannot guide priority setting in health care resource allocation. Economic evaluation studies using incidence-based scenario comparisons may be more promising in that respect.

Cost of illness studies: no aid to decision making: Reply to Shiell et al. (Health Policy, 8 (1987) 317-323)

Efficient resource allocation in health care requires adequate techniques of collective decision making. In a recent article Shiell, Gerard and Donaldson (Health Policy 8 (1987) 317-323) claim that cost of illness studies only confuse, mask and mislead, while cost-benefit analysis provides the relevant framework for decisions in health care. We do not agree with their naive approach to decision making in health care. In comparing the two alternative methods, their respective importance for decision making becomes apparent. None of the two techniques may be considered as the one and only means to ultimately solving the problem of efficient resource allocation in health care. Yet, both techniques can provide relevant information on which policy makers can base their decisions in health care.