Monday, June 25, 2012

"My Disease Cost More Than Yours": It Really Depends on What is Counted

In the world of those who advocate for individuals who have a particular disease or condition, one thing that is often discussed is how much a disease costs.  In my casual observation as a scientist working with advocates, sometimes it seems like we get into a discusion of "My disease is bigger than your disease!"  Or, more appropriately, "My disease costs more than your disease and therefore deserves more attention."  Not quite like a schoolyard brawl. But definitely a sense of trying to get some attention based on the magnitude of the impact.

How do we measure the magnitude of the impact?  We often talk about direct costs (or how much we spend on medical care) and indirect costs (or measures having to do with productivity).  Sometimes, it is hard enough to measure the direct costs.  Who pays what?  How do we know how much they pay? IIs that is paid what it really costs?  How does the system (in the US or elsewhere) help to make it clear whether there is much of a relationship between what is paid and what it costs?

But that is the easy side.  Measuring lost productivity is even more complicated.  A key question that has been debated in the health economics community is whether to measure the value of the individual's time and the concept of potential productivity (often referred to as the "human capital approach") or whether to measure just the productivity lost by the firm (referred to as the "friction cost approach").

The conceptual model has been discussed in the literature extensively, but there is limited literature comparing estimates using the two approaches for the same disease with the same population.  A recent study by Paul Hanly and colleagues compared the estimates of the productivity cost of breast and prostate cancer using the two approaches.

It is at this point that we see that the numbers that are used by advocates greatly depend on what is being counted.  When counting all productivity costs over a lifetime, breast cancer has a far higher impact per person in Ireland than prostate cancer.  The breast cancer cases are younger, are likely earning more, and live longer with the impact of cancer.  However, with the friction cost approach, the two conditions are responsible for nearly identical productivity losses with prostate cancer having a slightly higher value.

In both cases, the wage is used rather than total compensation.  Total compensation includes things like employer sponsored health insurance premiums, payments to retirement accounts by the employer, etc.  Perhaps these are not issues in Ireland in the same way that they are in the United States, but they do need to be considered.

The next time you see that a given disease is costing a given country some enormous number of billions of dollars per year, be careful to stop and think "what is being counted," what should be counted, and how should we count it?  I find that I'm not ever sure of the answer to the last question.  And while the answer to the first one should be clear from reading a well-written scientific article, it may not be clear from reading a popular press interpretation.  Finally, the answer to the middle question may well depend on the policy context.  Let the user of results beware.  

1 comment:

  1. i read your blog great and nice details. Measuring lost productivity is even more complicated. A key question that has been debated in the health economics community is whether to measure the value of the individual's time and the concept of potential productivity.
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