Economic Burden of Illness in Canada, 1993

Executive Summary

Comprehensive and authoritative estimates of the cost of illness in Canada are vital to setting priorities for allocating limited health resources. However, many conceptual and methodological difficulties arise when attempting to quantify, in economic terms, the impact of illness and injury. The authors of this report have chosen the prevalence-based human capital approach to translate morbidity and premature mortality into direct and indirect costs to affected individuals and society.

The total cost of illness, disability and premature death in Canada for 1993 was an estimated $156.9 billion based on a 6% discount rate. This is roughly equivalent to 22% of the Gross Domestic Product (GDP) or $5,450 per capita. Direct costs accounted for $71.7 billion; hospital care was the largest direct cost component ($26.1 billion), while research expenditure was the smallest ($752 million). Indirect costs totalled $85.1 billion; almost half (45%, $38.3 billion) of this amount was attributed to the loss of productivity resulting from long-term disability.

All costs except $27.6 billion in direct costs were classifiable by diagnostic category. The diagnostic categories with the highest total costs were cardiovascular diseases ($19.7 billion), musculoskeletal diseases ($17.8 billion), injuries ($14.3 billion) and cancer ($13.1 billion). These four categories collectively represented half (50.2%) of the total cost of illness classifiable by diagnostic category.

A portion of the costs of illness could be categorized by age and sex. The age group 65 and over accounted for almost one third (29.2%, $37.6 billion) of the costs classifiable by age group. The costs of illness that could be classified by sex were almost evenly distributed between males ($65.9 billion) and females ($62.7 billion). However, the distribution by age group and sex varied considerably by cost component.

This report provides a conservative estimate of the main direct and indirect costs of illness in Canada for 1993. Cost estimates have been refined extensively from the original report, Economic Burden of Illness in Canada, 1986. Recognizing implicit limitations and assumptions, both theoretical and practical, the report recommends continued refinement of cost-of-illness estimates as well as research, health promotion and disease prevention focused on illnesses with the greatest "health burden."

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