Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study

BACKGROUND

Productivity costs result from loss of paid and unpaid work and replacements due to morbidity and mortality. They are usually assessed in health economic evaluations with human capital method (HCM) or friction cost method (FCM). The methodology for estimating lost productivity is an area of considerable debate.

OBJECTIVE

To compare traditional and adjusted HCM and FCM productivity cost estimates among young stroke patients.

METHODS

The Northern Finland Birth Cohort 1966 was followed until the age of 50 to identify all 339 stroke patients whose productivity costs were estimated with traditional, occupation-specific and adjusted HCM and FCM models by using detailed, national register-based data on care, disability, mortality, education, taxation and labour market.

RESULTS

Compared to traditional HCM, taking into account occupational class, national unemployment rate, disability-free life expectancy and decline in work ability, the productivity cost estimate decreased by a third, from €255,960 to €166,050. When traditional FCM was adjusted for occupational class and national unemployment rate, the estimate more than doubled from €3,040 to €7,020. HCM was more sensitive to adjustments for discount rate and wage growth rate than FCM.

CONCLUSIONS

This study highlights the importance of adjustments of HCM and FCM. Routine register-based data can be used for accurate productivity cost estimates of health shocks.

The impact of firms' adjustments on the indirect cost of illness

Illness-related absenteeism reduces firms' output, an effect referred to as indirect cost (IC) and often included in cost-of-illness or cost-effectiveness (of health technologies) studies. The companies may foresee this effect and modify hiring or contracting policies. We present a model allowing the estimation of IC with such adjustments. We show that the risk of illness does not change the general shape and properties of the (expected) marginal productivity function. We apply our model to several illustrative examples and show that firm's adjustments impact IC in an ambiguous way, depending on detailed company/market characteristics: in some cases the company reduces the employment (further increasing IC), in another-the opposite happens. Contrary to previous findings, teamwork and shortfall penalties may reduce IC in some settings. Our analysis highlights that IC should be split into the result of companies preparing for and actually experiencing sick leaves.