Methods
Using the human capital approach, mortality costs are represented by the current monetary value of future productivity lost due to premature mortality. The estimated cost or value to society of all deaths is the product of the number of deaths and the discounted value, with age and sex taken into account, of an individual's lifetime productivity.1
The discounted present value of lifetime productivity (future labour force work and unpaid work) by age and sex is calculated using the lifetime productivity loss model (refer to Appendix 5).2,3 The model sums productivity in the current year plus productivity expected in future years if the individual continues to live. This model accounts for life expectancy for different age and sex groups,4 earnings at successive ages,5 varying labour force participation rates,5 the value of unpaid work,6 the productivity growth rate 1 and the appropriate discount rate to convert a stream of costs or benefits into present worth.1
We apply a discount rate of 6% to both employment earnings and the value of unpaid work to reflect the present value of future productivity. A sensitivity analysis using discount rates varying from 2% to 10% provides a range of possible lifetime productivity losses (see Appendix 5). Productivity growth rates of 1% for labour force work and 0% for unpaid work are applied to account for future productivity gains. These rates reflect conservative estimates of projected and past experience in Canada and the United States.1-3
The 1993 national average supplementary labour income rate 7 is applied to the discounted value of future labour force work to account for wage supplements (i.e. employer contributions to employee welfare, pensions [CPP/QPP], workers' compensation and unemployment insurance funds).
The value of future unpaid work is added to the adjusted value of future labour force work for each age group and sex. The resulting values are multiplied by the number of deaths in 1993 8 for each diagnostic category, age group and sex to obtain final estimates of the present value of future productivity loss due to premature mortality.
Assumptions
The present value of future productivity lost due to premature mortality in 1993 was an estimated $29.3 billion at a 6% discount rate. A sensitivity analysis produced productivity losses for premature mortality between $22.3 billion (using a discount rate of 10%) and $43.7 billion (using a discount rate of 2%). The figure in Appendix 5 illustrates the results of the sensitivity analysis.
Cancer, cardiovascular diseases and injuries had the highest mortality costs in 1993. These three diagnostic categories represented three quarters (75.1%) of the total mortality costs in 1993.
Coronary heart disease ($4.6 billion) accounted for two thirds (61.8%) of the mortality costs for cardiovascular diseases. Diabetes was responsible for almost three quarters (73.0%, $559 million) of the mortality costs of endocrine and related disorders. Chronic bronchitis, emphysema and asthma ($734 million) represented just over half (52.6%) of the mortality costs of respiratory diseases.
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Methods
The value of productivity lost to long-term disability is calculated for the household and institutionalized population.
The National Population Health Survey (NPHS) household component 1 provides the number of people who reported a long-term disability by diagnostic category, age group and sex. These figures are adjusted for severity and annual average length of long-term disability, applying distributions from the Quebec Health and Social Survey (QHSS).2,3 Weights are assigned to account for lost productivity at different levels of long-term disability 4-7 (see Appendix 6).
The NPHS institutional component 8 provides the number of people living in Canadian long-term health care facilities by age and sex. These figures, multiplied by the distribution of long-term disability in institutions according to diagnostic category, age group and sex 9 and the annual average length of stay in institutions,10 provide estimates of the number of people in long-term health care facilities by diagnostic category, age group and sex. Weights are applied to account for productivity loss at different levels of long-term disability.4-7
The adjusted figures for long-term disability by diagnostic category, age group and sex for the household and institutionalized populations are summed. These figures, multiplied by the 1993 annual average value of labour force work,11 adjusted for wage supplements 12 and unpaid work,13 are used to estimate the total value of productivity lost to long-term disability by diagnostic category, age group and sex.
Assumptions
The estimated value of productivity lost due to long-term disability in 1993 was $38.3 billion, based on weights of 0.9 for "very severe," and, for the household population only, 0.1 for "minor limitations" (see Appendix 6). The institutionalized population represented $3.1 billion of this total.
A sensitivity analysis, using a range of weights, produced productivity losses from $31.8 billion (0.8; 0.0) to $44.7 billion (1.0; 0.2).
Musculoskeletal diseases, the leading cause of long-term disability, accounted for $13.5 billion, roughly one third (35.2%) of long-term disability costs. Nervous system and sense organ diseases (14.9%, $5.7 billion) and cardiovascular diseases (11.8%, $4.5 billion) also had high disability costs.
Arthritis and musculoskeletal disorders of the back and spine each represented a third of the cost of all musculoskeletal diseases ($4.4 billion; $4.3 billion). Sight and hearing disorders made up 36.6% of the cost of nervous system and sense organ disorders ($1.2 billion; $943 million). Asthma and bronchitis/emphysema ($1.8 billion; $424 million) accounted for 85.3% of the cost of long-term disability due to respiratory diseases.
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Methods
The National Population Health Survey 1 provides the average number of days of short-term disability by age and sex for two levels of severity: "days in bed" or "days of reduced major activity." Weights are assigned to these levels to account for the loss of productivity at different severity levels of short-term disability: 0.9 for "days in bed" and 0.5 for "days of reduced major activity"2-5 (see Appendix 6). A sensitivity analysis of productivity losses using weights of 0.8 and 1.0 for "days in bed" has also been conducted.
The adjusted values are applied to the general population 6 to estimate total annual days of productivity lost due to short-term disability by age and sex. Annual days of productivity lost due to short-term disability by diagnostic category, age group and sex are generated by applying these values to the distribution of days lost due to short-term disability by diagnostic category, age group and sex obtained from the Quebec Health and Social Survey (QHSS).7
The number of annual days of productivity lost according to diagnostic category, age group and sex is then multiplied by an average value per day of labour force work,8 adjusted for wage supplements 9 and unpaid work,10 to estimate the value of productivity lost to short-term disability by diagnostic category, age and sex. Labour force earnings and the value of unpaid work are available by age and sex.
Assumptions
The total productivity lost due to short-term disability was an estimated $17.5 billion in 1993. The leading cause of short-term disability was respiratory diseases ($4.4 billion, 24.8%), followed by injuries ($3.2 billion, 18.5%), musculoskeletal diseases ($1.8 billion, 10.0%) and digestive diseases (1.2 billion, 6.5%).
A sensitivity analysis produced productivity losses for short-term disability of $16.8 billion to $18.3 billion, using respective weights of 0.8 and 1.0 for the severity level "days in bed" (see Appendix 6).
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