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Johan Polder, PhD | Professor in Health Eonomics

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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:

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…..

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