Understanding the costs of asthma: the next step

Kevin B. Weiss, MD; Sean D. Sullivan, PhD

Canadian Medical Association Journal 1996; 154: 841-843


Dr. Weiss is director of the Center for Health Services Research, Rush Primary Care Institute, Rush System for Health, Chicago, Ill. Dr. Sullivan is assistant professor in the Department of Pharmacy, University of Washington, Seattle, Wash.
Paper reprints of the full text may be obtained from: Dr. Kevin B. Weiss, Center for Health Services Research, Rush Primary Care Institute, Rush-Presbyterian-St. Luke's Medical Center, 1653 W Congress Pkwy., Chicago IL 60612-3833; fax 312 432-1915

Abstract

The authors comment on Dr. Murray Krahn and associates' findings on the direct and indirect costs of asthma in Canada in 1990 (see pages 821 to 831 of this issue [full text]). They believe this study is the most meticulous of recent cost-of-illness analyses of the economic burden of asthma. They argue that although Krahn and associates' study is a useful addition to the economic literature on this common disorder, the cost-of-illness method of analysis cannot address the question of the relative costs and benefits of specific interventions. The next task in improving the management of asthma is therefore to undertake studies that will allow clinical and administrative decision-makers to assess the relative cost-effectiveness of a range of available treatments.

Introduction

As societal demand for cost-effectiveness in the delivery of health care increases, so does the need to characterize medical resource allocation and the burden of disease, particularly with respect to common chronic illnesses. Rice[1] suggested a cost-of-illness method for estimating average annual burden of disease by assessing and quantifying the direct costs of medical treatment, the indirect costs of lost productivity and the intangible costs of pain, suffering and impairment. This method has been extended to encompass incidence-based estimates of lifetime burden of disease.[2] At present the cost-of- illness method remains fundamental in the depiction of burden of disease from a societal perspective. In this issue (see pages 821 to 831 [full text]) Dr. Murray Krahn and associates report on the economic burden of asthma. Their study makes a useful contribution to the economic literature on this common illness, but it leaves unanswered many pivotal questions related to the definition of cost-effectiveness in asthma care.

Studies of the economic burden of asthma began to emerge in the 1970s.[3,4] Although informative, these early studies focused on the impact on patients and their families rather than on society and did not adhere to many of the basic principles of cost-of-illness methodology. Recently, a review was published of several international assessments of the economic burden of asthma.[5] These studies viewed costs from a societal perspective while attempting to adhere closely to the principles of cost-of-illness analysis -- all with varying degrees of success.[6] The study by Krahn and associates is the most meticulous of the recent analyses. The authors take the precaution of including the more transparent and comprehensive contributors to direct costs (e.g., nursing services, ambulance use, drugs and devices, outpatient diagnostic tests and research) than previous asthma cost studies have done. Also, multiple and overlapping data sources were used to provide ranges rather than single-point estimates for many key medical costs.

The authors estimate that the average annual costs of asthma in Canada totalled between $504 and $648 million in 1990. Although this seems large in absolute terms, international comparison reveals that the average annual per capita costs in Canada -- $19.06 -- are notably lower than those in several other industrialized countries, including Australia ($32.33), Sweden ($47.26), the United Kingdom ($36.48) and the United States ($29.99).[6] (These figures are based on US dollars, using the US-Canadian exchange rate [US$1 = Cdn$1.167] used by Krahn and associates.) The relatively low average annual per capita costs in Canada appear to be consistent both for direct and indirect costs.

Although the reasons for this finding are unclear, at least two explanations may be postulated. The relatively low costs of asthma in Canada could represent an undervaluing of medical and social services by the Canadian health and welfare systems. Alternatively, they could imply a more efficient use of economic resources. Although definitive testing of either postulate is unfeasible, the indirect evidence amassed in the epidemiologic literature would suggest that the latter hypothesis is true.

International comparisons of asthma-related disability and death demonstrate that per capita expenditures for asthma in Canada as well as key adverse-outcome measures such as death rates are similar to those in the United States and lower than those in several other industrialized countries.[7,8] Also, Canadian rates of asthma-related hospital admissions, at least for older children and young adults, are similar to those in the United States.[9,10] These comparisons suggest that resources for the treatment of asthma are being used more efficiently in Canada than in other countries.

Although this conclusion may be appealing, there may be other explanations. For example, lower rates of hospital admission and of death would also be expected if the intrinsic expression of the disease were less severe in the Canadian population. Thus, while it seems clear that the per capita costs of asthma in Canada are low compared to those in several other industrialized countries, the implications of this phenomenon are and will likely remain uncertain.

The study by Krahn and associates does, however, provide some plausible explanations for the comparatively lower per capita costs of asthma in Canada. In their direct comparison of categories of costs in Canada and the United States, they appropriately highlight the fact that "utilization patterns were strikingly similar and that differences in overall costs and costs by category were largely accounted for by differences in unit costs." This finding suggests that relative economic inefficiencies exist in the United States, one well-characterized example being the high cost of administration in the US health care system.[11]

Krahn and associates' analysis is an excellent example of a prevalence-based cost-of-illness study of asthma. In many ways it provides a benchmark for illustrating the extent and relative distribution of medical and nonmedical resources devoted to the management of asthma. By the very nature of its cost-of-illness methodology, however, it is limited to the quantification of economic burden and, hence, fails to address the important societal questions related to the relative benefits and costs of investments in asthma care. Specifically, cost-of-illness methodology does not provide direct information for clinical and administrative decision-makers regarding the relative cost-effectiveness of different asthma treatments.

A US task force recently reviewed the existing health-economics literature relating to cost-effectiveness of asthma management.[12] This review revealed many shortcomings in the available studies, including a lack of standard approaches for evaluating the economic costs and benefits of interventions, varying lengths of follow-up and the use of nonstandard outcome measures. These inconsistencies hinder decision-makers in their ability to compare the clinical and economic benefits of alternative treatments of asthma.

With the addition of Krahn and associates' study the international literature on the costs of asthma provides a comprehensive body of information establishing the economic burden of this disease from a societal perspective. The next task for those interested in enhancing the efficiency of asthma care is to improve the methods, standardization, breadth and scope of comparative economic studies of asthma management strategies. Perhaps topping the list of priorities is the need to study the cost-effectiveness of various proposed national and international guidelines for the management of asthma.

References

  1. Rice DP: Estimating the Cost of Illness. No 6 of Health Economic Series, Public Health Service, Washington, 1966
  2. Hodgson TA: Cigarette smoking and lifetime medical expenditures. Milbank Q 1992; 70 (1): 81-117
  3. Vance VJ, Taylor WF: The financial cost of chronic childhood asthma. Ann Allergy 1971; 29: 455-460
  4. Marion RJ, Creer TL, Reynolds RVC: Direct and indirect costs associated with the management of childhood asthma. Ann Allergy 1985; 54: 31-34
  5. Weiss KB, Sullivan SD: The economic costs of asthma: a review and conceptual model. PharmacoEconomics 1993; 4: 14-30
  6. Socioeconomics. In Global Initiative for Asthma, Global Strategy for Asthma Management and Prevention, National Heart, Lung and Blood Institute-World Health Organization Workshop Report (pub no 95-3659), National Institutes of Health, Bethesda, Md, 1995
  7. Sly RM: Changing asthma mortality. Ann Allergy 1994; 73: 259-268
  8. Sears MR: Changing patterns in asthma morbidity and mortality. J Invest Allergol Clin Immunol 1995; 5: 66-72
  9. Wilkins K, Mao Y: Trends in rates of admission to hospital and death from asthma among children and young adults in Canada during the 1980s. CMAJ 1993; 148: 185-190
  10. Graves EJ: National Hospital Discharge Survey: annual summary, 1987. Vital Health Stat [13] 1989; no 99: 30-31
  11. Woolhandler S, Himmelstein DU, Lewontin JP: Administrative costs in US hospitals. N Engl J Med 1993; 329: 400-403
  12. Task Force on the Cost Effectiveness, Quality, and Financing of Asthma Care in the US: Report of the Working Group on Cost Effectiveness of Asthma Care. Am J Respir Crit Care Med (suppl, in press)

| CMAJ March 15, 1996 (vol 154, no 6) |