Johan Polder, PhD | Professor in Health Eonomics

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: +0.31 (male); +0.85 (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. top-down method step I: health expenditures step II: providers step III: disease-based indicators step IV: cost of illness Accounting process

12. The Netherlands in the worldShare of health care costs in the GDP (%)

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 diagnosisDistribution ICD-9 chapters (%)

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., 2006)

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…..