PharmacoEconomics

, Volume 4, Issue 6, pp 446–454 | Cite as

Indirect Costs in Economic Studies

Confronting the Confusion
  • Marc A. Koopmanschap
  • Frans F. H. Rutten
Review Article

Summary

Indirect costs of disease often constitute a substantial part of estimated costs or savings in economic evaluations of healthcare programmes. The human capital approach is almost unanimously used for estimating indirect costs, defined as production loss due to disease, although a growing number of authors question its validity. This article discusses the relevance of indirect cost estimates for health policy and reviews the current empirical and methodological literature on this issue. It describes several important issues and controversies regarding indirect costs, such as the consequences of short term absence from work for productivity, reduced productivity without absence from work, the influence of unemployment on production loss, the relation between health effects and indirect costs, and the possible medium term macroeconomic consequences of absence from work and disability. It concludes that indirect costs are relevant for health policy, provided that the estimates of indirect costs reflect the real changes in production due to disease, including the production of unpaid labour. Future research should focus on attaining these estimates. Indirect costs in economic evaluations should preferably be presented separately from direct costs, health effects and other study outcomes.

Bibliography

  1. Birenbaum LK, Clarke-Steffen L. Terminal care costs in childhood cancer. Pediatric Nursing 18: 285–288, 1992PubMedGoogle Scholar
  2. Böstman O, Hirvensalo E, Partio E, Törmälä P, Rokkanen P. Impact of the use of absorbable fracture fixation implants on consumption of hospital resources and economic costs. Journal of Trauma 31: 1400–1403, 1991PubMedCrossRefGoogle Scholar
  3. Browne GB, Arpin K, Corey P, Fitch M, Gafni A. Individual correlates of health service utilization and the cost of poor adjustment to chronic illness. Medical Care 28: 43–58, 1990PubMedCrossRefGoogle Scholar
  4. Colditz GA. Economic costs of obesity. American Journal of Clinical Nutrition 55: 503S–507S, 1992PubMedGoogle Scholar
  5. Cushner F, Friedman RJ. Economic impact of total hip arthroplasty. Southern Medical Journal 81: 1379–1381, 1988PubMedCrossRefGoogle Scholar
  6. Daly E, Roche M, Barlow D, Gray A, McPhcrson K, et al. HRT: an analysis of benefits, risks and costs. British Medical Bulletin 48: 368–400, 1992PubMedGoogle Scholar
  7. De Girolamo G. Epidemiology and social costs of low back pain and fibromyalgia. Clinical Journal of Pain 7(Suppl. 1): S1–S7, 1991PubMedGoogle Scholar
  8. Dodson WC, Haney AF. Controlled ovarian hyperstimulation and intrauterine insemination for treatment of infertility. Fertility and Sterility 55: 457–467, 1991PubMedGoogle Scholar
  9. Fahs MC, Markowitz SB, Fischer E, Shapiro J, Landrigan PJ. Health costs of occupational disease in New York State. American Journal of Indistrial Medicine 16: 437–449, 1989CrossRefGoogle Scholar
  10. Fitzgerald JM, Gafni A. A cost-effectiveness analysis of the routine use of isoniazid prophylaxis in patients with a positive mantoux skin test. American Review of Respiratory Disease 142: 848–853, 1990PubMedGoogle Scholar
  11. Frymoyer JW, Cats-Baril WL. An overview of the incidences and costs of low back pain. Othopedic Clinics of North America 22: 263–271, 1991Google Scholar
  12. Gerard K, Donaldson C, Maynard AK. The cost of diabetes. Diabetic Medicine 6: 164–170, 1989PubMedCrossRefGoogle Scholar
  13. Gorsky RD, Schwartz E, Dennis D. The mortality, morbidity and economic costs of alcohol abuse in New Hampshire. Preventive Medicine 17: 736–745, 1988PubMedCrossRefGoogle Scholar
  14. Gorsky RD, Schwartz E, Dennis D. The morbidity, mortality, and economic costs of cigarette smoking in New Hampshire. Journal of Community Health 15: 175–183, 1990PubMedCrossRefGoogle Scholar
  15. Goulston KJ, Dent OF, Mant A, Logan J, Ngu M. Use of H2-reccptor antagonists in patients with dyspepsia and heartburn: a cost comparison. Medical Journal Australia 155: 20–26, 1991Google Scholar
  16. Grimm RH. Epidemiology and cost implications of antihypertensive treatment for the prevention of cardiovascular disease. Journal of Human Hypertension 3: 55–61, 1989PubMedGoogle Scholar
  17. Guyer B, Ellers B. Childhood injuries in the United States: mortality, morbidity, and cost. American Journal of Diseases of Children 144: 649–652, 1990PubMedGoogle Scholar
  18. Harlan LC, Harlan WR, Parsons PE. The economic impact of injuries: a major source of medical costs. American Journal of Public Health 80: 453–459, 1990PubMedCrossRefGoogle Scholar
  19. Hatziandreu EL, Koplan JP, Weinstein MC, Caspersen CJ, Warner KE. A cost-effectiveness analysis of exercise as a health promotion activity. American Journal of Public Health 78: 1417–1421, 1988PubMedCrossRefGoogle Scholar
  20. Havas S. Heart disease, cancer and stroke in Maryland. Southern Medical Journal 85: 599–607, 1992PubMedCrossRefGoogle Scholar
  21. Hay JW, Ernst RL. The economic costs of Alzheimer’s disease. American Journal of Public Health 77: 1169–1175, 1987PubMedCrossRefGoogle Scholar
  22. Huang LF, Cartwright WS, Hu TW. The economic cost of senile dementia in the United States, 1985. Public Health Reports 103: 3–7, 1988PubMedGoogle Scholar
  23. Jensen DM. Economic assessment of peptic ulcer disease treatments. Scandinavian Journal of Gastroenterology 23(Suppl. 146): 214–224, 1988CrossRefGoogle Scholar
  24. Jönsson B, Carlsson P. The effects of cimetidine on the cost of ulcer disease in Sweden. Social Science and Medicine 33: 275–282, 1991PubMedCrossRefGoogle Scholar
  25. Jönsson B, Haglund U. Cost-effectiveness of misoprostol in Sweden. Inteinational Journal of Technology Assessment in Health Care 8: 234–244, 1992CrossRefGoogle Scholar
  26. Jönsson B, Horisberger B, Bruguera M, Matter L. Cost-benefit analysis of hepatitis-B vaccination: a computerized decision model for Spain. International Journal of Technology Assessment in Health Care 7: 379–402, 1991PubMedCrossRefGoogle Scholar
  27. Jönsson B, Rehnberg C, Borgquist L, Larsson SE. Locomotion status and costs in destructive rheumatoid arthritis: a comprehensive study of 82 patients from a population of 13000. Acta Orthopaedica Scandinavica 63: 207–212, 1992PubMedCrossRefGoogle Scholar
  28. Krosnick A. Economic impact of type II diabetes mellitus. Primary Care 15: 423–432, 1988PubMedGoogle Scholar
  29. Laupacis A, Labelle R, Goeree R, Caims J. The cost-effectiveness of routine post myocardial infarction exercise stress testing. Canadian Journal of Cardiology 6: 157–163, 1990PubMedGoogle Scholar
  30. Leigh JP, Richardson N, Beck R, Kerr C, Harrington H, et al. Randomized controlled study of a retiree health promotion program. Archives of Internal Medicine 152: 1201–1206, 1992PubMedCrossRefGoogle Scholar
  31. Lenfant C, LaRosa JH, Horan MJ, Passamani ER. Considerations for a national heart attack alert program. Clinical Cardiology 13(8): 9–11, 1990Google Scholar
  32. Levin LA, Jönsson B. Cost-effectiveness of thrombolysis — a randomized study of intravenous rt-PA in suspected myocardial infarction. European Heart Journal 13: 2–8, 1992PubMedGoogle Scholar
  33. Lubeck DP, Yelin EH. A question of value: measuring the impact of chronic disease. Miibank Quarterly 66: 444–464, 1988CrossRefGoogle Scholar
  34. MacKenzie EJ, Morris JA, Smith GS, Fahey M. Acute hospital costs of trauma in the United States: implications for regionalized systems of care. Journal of Trauma 30: 1096–1103, 1990PubMedCrossRefGoogle Scholar
  35. Mellis MG, Peat JK, Bauman AE, Woolcock AJ. The cost of asthma in New South Wales. Medical Journal of Australia 155: 522–528, 1991PubMedGoogle Scholar
  36. Moore DA, Hopkins RS. Assessment of a school exclusion policy during a chickenpox outbreak. American Journal of Epidemiology 133: 1161–1167, 1991PubMedGoogle Scholar
  37. Olivera EM, Pérez Duhalde E, Gagliardino JJ. Costs of temporary and permanent disability induced by diabetes. Diabetes Care 14: 593–596, 1991PubMedCrossRefGoogle Scholar
  38. Olsson G, Levin LA, Rehnqvist N. Economic consequences of postinfarction prophylaxis with -blockers: cost effectiveness of metoprolol. British Medical Journal 294: 339–342, 1987PubMedCrossRefGoogle Scholar
  39. Ozer H, Golomb HM, Zimmerman H, Spiegel RJ. Cost-benefit analysis of interferon Alfa-2b in treatment of hairy cell leukemia. Journal of the National Cancer Institute 81: 594–602, 1989PubMedCrossRefGoogle Scholar
  40. Rutz W, Carlsson P, Knorring von L, Wälinder J. Cost-benefit analysis of an educational program for general practitioners by the Swedish Committee for the prevention and treatment of depression. Acta Psychiatrica Scandinavica 85: 457–464, 1992PubMedCrossRefGoogle Scholar
  41. Ryden LA, Molgaard CA, Bobbitt SL. Benefits of a back care and light duty health promotion program in a hospital setting. Journal of Community Health 13: 222–230, 1988PubMedCrossRefGoogle Scholar
  42. Saywell RM, Woods JR, Holmes GL, Sechrisl ME, Nyhuis AW. Reducing the costs of patient transfers. Journal of Nursing Administration 17: 11–19, 1987PubMedCrossRefGoogle Scholar
  43. Scitovsky AA, Rice DP. Estimates of the direct and indirect costs of acquired immunodeficiency syndrome in the United States. 1985, 1986, and 1991. Public Health Reports 102: 5–17, 1987PubMedGoogle Scholar
  44. Stool SE, Field MJ. The impact of otitis media. Pediatric Infectious Disease Journal 8: S11–S14, 1989PubMedCrossRefGoogle Scholar
  45. Washington AE, Johnson RE, Sanders LL. Chlamydia trachomatis infections in the United States: what arc they costing us? Journal of the American Medical Association 257: 2070–2072, 1987PubMedCrossRefGoogle Scholar
  46. Washington AE, Katz P. Cost of and payment source for pelvic inflammatory disease. Journal of the American Medical Association 266: 2565–2569, 1991PubMedCrossRefGoogle Scholar
  47. Weiss KB, Gergen PJ, Hodgson TA. An economic evaluation of asthma in the United States. New England Journal of Medicine 326: 862–866, 1992PubMedCrossRefGoogle Scholar
  48. Williams AF, Begley CK. The cost of cancer in Texas. Journal of Texas Medicine 88: 62–67, 1992Google Scholar

References

  1. BIPE. The economics of ulcers in France, Neuilly, Seine Cedex, 1978Google Scholar
  2. Commonwealth of Australia. Guidelines for the pharmaceutical industry on preparation of submissions to the Pharmaceutical Benefits Advisory Committee: including submissions involving economic analyses. Department of Health, Housing and Community Services, Woden (ACT), 1990Google Scholar
  3. Culyer AJ. The normative economics of health care finance and provision. In McGuire et al. (Eds) Providing health care: the economics of alternative systems of finance and delivery, pp. 65–99, Oxford University Press, Oxford, 1991Google Scholar
  4. de Koning J, Tuyl FAWM. The relation between labour time, production and employment (in Dutch). Netherlands Economic Institute, Rotterdam, 1984Google Scholar
  5. Detsky A. Guidelines for economic analysis of pharmaceutical products: a draft document for Ontario and Canada. PharmacoEconomies 3: 354–361, 1993CrossRefGoogle Scholar
  6. Drummond MF. Australian guidelines for cost-effectiveness studies of pharmaceuticals: the thin end of the boomerang? Centre for Health Economics Discussion Paper No. 88, University of York, York, 1991Google Scholar
  7. Drummond MF. Cost-of-illness studies: a major headache? PharmacoEconomics 2: 1–4, 1992PubMedCrossRefGoogle Scholar
  8. Drummond MF, Stoddart GL, Torrance GW. Methods for the economic evaluation of health care programmes, pp. 78–79, Oxford University Press, Oxford, 1987Google Scholar
  9. Fitzgerald JM, Gafni A. A cost-effectiveness analysis of the routine use of isoniazid prophylaxis in patients with a positive mantoux skin test. American Review of Respiratory Disease 142: R48–853, 1990Google Scholar
  10. Gerard K, Donaldson C, Maynard AK. The cost of diabetes. Diabetic Medicine 6: 164–170, 1989PubMedCrossRefGoogle Scholar
  11. Henry DA. The Australian guidelines for subsidisation of pharmaceuticals. PharmacoEconomics 2: 422–424, 1992PubMedCrossRefGoogle Scholar
  12. Jönsson B, Horisberger B, Bruguera M, Matter L. Cost-benefit analysis of hepatitis-B vaccination: a computerized decision model for Spain. International Journal of Technology Assessment in Health Care 7: 379–402, 1991PubMedCrossRefGoogle Scholar
  13. Koopmanschap MA, van Ineveld BM. Towards a new approach for estimating indirect costs of disease. Social Science and Medicine 34: 1005–1010, 1992PubMedCrossRefGoogle Scholar
  14. Levin L.A, Jönsson B. Cost-effectiveness of thrombolysis — a randomized study of intravenous rt-PA in suspected myocardial infarction. European Heart Journal 13: 2–8, 1992PubMedGoogle Scholar
  15. Lindgren B. Costs of illness in Sweden 1964–1975, p. 31, Liber, Lund, 1981Google Scholar
  16. McGuire A, Henderson J, Mooney G. The economics of health care: an introductory text, pp. 84–86, Rotitledge & Kegan Paul, London, 1988Google Scholar
  17. Ontario Ministry of Health. Guidelines for preparation of economic analysis to be included in submission to Drug Programs Branch for listing in the Ontario Drag Benefit Formulary/Comparative Drug Index. ((pages?)) Ministry of Health, Toronto, 1991Google Scholar
  18. Osterhaus JT, Guttcnnan DL, Plachetka JR. Healthcare resource and lost labour costs of migraine headache in the US. PharmacoEconomics 2: 67–76, 1992PubMedCrossRefGoogle Scholar
  19. Ours J van, Ridder G. Cyclical variation in vacancy durations and vacancy flows, an empirical analysis. European Economic Review 35: 1143–1155, 1991CrossRefGoogle Scholar
  20. Russell LB. Is prevention better than cure? p. 36, Brookings Institution, Washington, 1986Google Scholar
  21. Shiell A, Gerard K, Donaldson C. Cost of illness studies: an aid to decision-making? Health Policy 8: 317–323, 1987CrossRefGoogle Scholar
  22. Williams A. Economics of coronary artery bypass grafting. British Medical Journal 291: 326–329, 1985PubMedCrossRefGoogle Scholar
  23. Wright K. The economics of informal care of the elderly. Centre for Health Economics Discussion Paper No. 23. University of York, York, 1987Google Scholar

Copyright information

© Adis International Limited 1993

Authors and Affiliations

  • Marc A. Koopmanschap
    • 1
  • Frans F. H. Rutten
    • 1
  1. 1.Institute for Medical Technology AssessmentErasmus University RotterdamRotterdamThe Netherlands

Personalised recommendations