1. Johan Polder, PhD | Professor in Health Eonomics
Cost of illness - Framework & Data
“Measuring education and health volume output”
OECD - Paris, June 6th- 7th, 2007

2. An economist knows the price of everything, but the value of nothing.

3. The value of health

5. Health Outcome: Dutch evidence
Infectious diseases
Disability adjusted life expextancy (DALE): +1.7
Costs per DALY avoided: € 3400
Cancer
DALE: (male); (female)
Costs per DALY avoided: € 15,500
Cardiovascular diseases
Life expectancy: +2.3 (male); +3.8 (female)
Costs per DALY avoided: € 2000
Generic efficiency of the health care system
Meerding WJ, Polder JJ, et al., (forthcoming, september 2007)

6. Health output: Cost of illness
Cost of illness (COI) analysis is the main method of providing an overall view on the economic impact of a disease.
Such studies have been used to set priorities for health care policy and describe resource allocations for various diseases.

7. Cost of illness - Approaches - Top-Down Approach Bottom-Up Approach
health expenditures from
National Health Accounts as
a fixed starting point
complete disease
no double counting
comorbidity (partial)
no longitudinal analysis
direct evaluation of patient
specific data
few special diseases
double counting
comorbidity
longitudinal analysis

8. GENERAL Cost of illness (COI): What?
Demographic and epidemiological view on health expenditure
Health expenditure by demand
Direct medical costs only
Break down of health expenditures to patient (or demand) characteristics as:
Disease (categories)
Age
Gender
Function
Financing

9. Cost of illness (COI): Why?
Description
Health expenditure by supply and demand
All combinations
Projection
Forecasts of future health expenditure
Ageing / changing disease patterns
Comparison
Over time: trends in health care costs
Between countries: better understanding of cross-country differences in health care systems and costs (for similar or different demography / epidemiology)

10. General COI: How?
Health care costs are known for each sector and actor
Statistics Netherlands: 80 actors according HP-classification
For each actor utilisation data is retrieved
By diagnosis, age, gender, function, financing
comprehensive registries and studies in the Netherlands (most of them were used, ± 50 major data sources)
Key variables represent equal health care use
contacts, inpatient days, prescriptions, …
some need weighing: hospital interventions, prescribed medicine
Costs are broken down using key variables

11. disease-based indicators
Accounting process
health expenditures
providers
disease-based indicators
step I:
step II:
step III:
step IV:
cost of illness
top-down method

12. The Netherlands in the world Share of health care costs in the GDP (%)
Figure 2.36 shows the
contribution of health care to a number of countries’ gross domestic product since 1975.
The countries have been selected so that the graph shows the entire bandwidth for all OECD countries and also includes the countries surrounding the Netherlands. The United States has the greatest contribution of health care to GDP, at approximately 13%.
Luxembourg’s contribution of more than 6% is not even half as large. The Netherlands is in the middle of the spectrum.

13. Key figures 16 million inhabitants Life expectancy
About 75 for men
About 81 for women
Bismarck-based health care system
Social health insurance
Tax financed care plays a minor role
GDP
About € 30,000 per head of the population
(€ 78,000 per worker)
Health expenditure
About € 3,500 per inhabitant (average)

14. Three perspectives Blue: Dutch health and social care accounts
€ 60 billion
Yellow: Budget Ministry of Health
€ 44 billion
Pink: OECD SHA
€ 45 billion
quite different boundaries

15. Relations between perspectives
Dutch health and social care accounts
Standard: comprehensive; time series available; SHA-based
Dutch Ministry of Health
Minus: prevention, personal expenditures on e.g. over the counter drugs, occupational health, social care
OECD System of Health Accounts
Minus: homes for the elderly, home care, care and provisions for people with mental/intellectual disabilities
Plus: investments

16. Dutch HA versus SHA / figures

17. COI-2003: Costs by provider (€ mln) <OECD definition of costs>

18. COI-2003: costs by disease (€ mln)

19. COI-2003: per capita costs by age & gender (€)

20. COI-2003: population costs by age & gender

21. COI-2003: Gender difference explained (€ mln)

22. COI-2003: by age and diagnosis Distribution ICD-9 chapters (%)
Diagnosis and age
The costs of diseases are strongly interrelated with age. Within nearly all ICD-chapters
most care was used by elderly people (see figure 3). For pregnancy, congenital malformations
and for perinatal complications a different pattern emerged, of course. Pregnancy
related costs for 0-year olds pertain to hospital costs for healthy babies. Similarly,
the costs of infectious diseases have been attributed for a substantial part to the
youngest age groups, among others because of the costs of the National Vaccination
Programme. For diseases of the digestive system, the share of children and adults is
relatively high because of the costs for dental care. For adults this disease category
also includes the costs of acid reducing pharmaceuticals.

23. All results: www.costofillness.nl

24. Drugs: results by diagnosis

25. Drugs: results by age & gender

26. Mental health care: Results by age & gender

27. International comparisons (Report by Heijink R, Polder JJ, et al

28. Curative care: overall picture comparable

29. Long term care: large differences

30. Comparability by age

31. Conclusions Cost of illness studies
value health output
allow for detailed analyses of health expenditure by aspects of supply & demand
can be used for projections & comparisons
Cross-national comparisons should focus on cure
COI-studies reveal the societal value of health care
(Health) economists have learned a lot about value (rather than price), but can learn even more…..