Advances in the methodological approach to friction period estimation: A European perspective

Social Costs of Smoking in the Czech Republic

OBJECTIVES

Smoking is an important risk factor leading to many diseases, which brings substantial healthcare costs as well as indirect costs due to decreased productivity. This article aims to quantify the social costs of smoking in the Czech Republic in 2019.

METHODS

The prevalence-based, cost-of-illness approach is used, which assesses the costs as the sum of direct (healthcare) costs and indirect costs (productivity losses due to mortality and morbidity). The costs of healthcare utilization and pharmacotherapy in direct costs, and the costs of absenteeism, presenteeism, and premature mortality in indirect costs, are included.

RESULTS

Total costs of smoking in the Czech Republic in 2019 are estimated as 2110.6 million EUR (0.94% of GDP). Direct costs amounted to 537.0 million EUR (2.9% of health expenditures in 2019) and indirect costs were 1573.6 million EUR, mainly driven by the costs of premature mortality (1062.5 million EUR).

CONCLUSIONS

Despite the declining trend in the prevalence of smoking in the Czech Republic, the associated costs are considerable. Investments into strategies to reduce smoking continue to be needed.

Validation of the PECUNIA reference unit costs templates in Spain: a useful tool for multi-national economic evaluations of health technologies

BACKGROUND

The PECUNIA Project was funded by the H2020 programme in which 10 partners from six countries participated. The aim was to develop standardized, harmonized and validated methods and tools to calculate costs in different sectors (such as health and social care, education among others), with the purpose of facilitating comparability of economic evaluations of health technologies across European countries. In this paper we report the first validation of the developed reference unit cost templates in Spain.

METHODS

The evaluation of the PECUNIA Reference Unit Cost (RUC) Templates involved usability, transferability and feasibility assessment. Applicability tests were performed to estimate the cost of a selection of 15 resource items by means of the RUC templates in Spain and in four Spanish regions. External validation involved comparison with existing unit costs.

RESULTS

It was possible to estimate the cost of five services (dental care and general practitioner in the Canary Islands, general practitioner in Spain [tariffs], health-related day care centre and education services provided in a special education school in the Basque Country), car vandalism as an example of potential health-related consequences, and informal care in Spain. The templates were feasible although data completeness depended on the type of data needed to estimate the costs. The templates are transferable across countries although comparability depends on the services available in each jurisdiction.

CONCLUSIONS

The PECUNIA RUC Templates are free and feasible tools to estimate comparable reference unit costs across countries. Although more validation exercises are needed, they seem useful tools to perform robust multi-national economic evaluations and increase the transferability of cost-effectiveness studies of health technologies in Europe. However, they cannot compensate for the lack of data across jurisdictions.

The Economic Burden of Biological Drugs in Rheumatoid Arthritis Treatment

OBJECTIVES

This article aimed to count and compare treatment's direct (only biological drugs) and indirect (loss of productivity) costs in patients with rheumatoid arthritis from 2019 to 2021.

METHODS

The friction cost approach was used to establish indirect costs. Elasticity factor values and friction period for the Slovak Republic from 2019 to 2021 were determined. Direct drug costs were calculated based on average prices from 2019 to 2021 and the number of dispensed medication packages.

RESULTS

The average productivity loss reached €2984.54 in 2019, €3338.46 in 2020, and €3154.01 in 2021. Total indirect costs include productivity loss and sick pay, and from 2019 to 2021 came the values of €8.4 million, €10.1 million, and €8.1 million, respectively.

CONCLUSIONS

Indirect costs were almost 2.5 to 3 times lower than the biological and targeted treatment costs.

Productivity Loss Across Socioeconomic Groups Among Patients With Low Back Pain or Osteoarthritis: Estimates Using the Friction-Cost Approach in Norway

OBJECTIVES

Our aim was to estimate the productivity loss (PL) among patients with low back pain (LBP) or osteoarthritis (OA) across socioeconomic groups, using the friction-cost approach (FCA).

METHODS

A total of 175,550 patients aged 18-65 years were included at their first diagnosis in specialty care between 2011 and 2016. PL was calculated for the year following diagnosis using individual wages, while adjusting for the friction length at 78 days per episode, a team production multiplier at 1.6, compensation mechanisms of 26.8%, and a chain-of-vacancies multiplier at 3.95. We included a simpler FCA model, omitting the latter three parameters, and a human capital approach (HCA) model. Socioeconomic stratifications were created based on education and income. One-way sensitivity analysis was used to assess the influence of the parameters in the full FCA model.

RESULTS

The overall mean number of absent days was 23, while it was 25.3 and 20.1 for those with low and high education levels. The per-patient friction costs were €4395 among all patients and when extending the friction length to 98 days costs were €4342. For those with low and high education levels, the costs were €3671 and €4464, respectively. The costs in the simple FCA and HCA models were €1539 and €2088.

DISCUSSION

Socioeconomic status and model design are sources of variation in PL. In health economic applications with PL and in patient populations with large socioeconomic differences, adjusting for these factors may be as important as sensitivities in parameters such as the friction length.

Estimating Global Friction Periods for Economic Evaluation: A Case Study of Selected OECD Member Countries

BACKGROUND

The friction cost approach (FCA) offers an alternative to the dominant human capital approach to value productivity losses. Application of the FCA in practice is limited largely due to data availability. Recent attempts have tried to standardise the estimation of friction periods across Europe, but to date, this has not been attempted elsewhere. Our aim was to estimate friction periods for 17 Organisation for Economic Co-operation and Development (OECD) member countries between 2010 and 2021 based on routinely published data.

METHODS

We derived friction period estimates for Australia, Austria, Canada, Czechia, Finland, Germany, Hungary, Japan, Korea, Luxembourg, Norway, Poland, Portugal, Sweden, Switzerland, the United Kingdom and the United States. Vacancy stock and flow data was sourced from the OECD's short-term labour situation database from 2010 to 2021, and included the impact of Covid-19 on the labour market. The estimated friction periods were applied to cost cancer-related premature mortality for the United States as an illustrative case.

RESULTS

The average friction period in the five non-European countries (Australia, Canada, Korea, Japan and the United States) was 61.0 days (SD 9.4) (range between 44.8 days in Korea and 82.2 days in Canada) and the average friction period in the 12 European countries was 60.6 days (SD 14.8) (range between 34.1 days in Switzerland and 137.3 days in Czechia). In both cases, the outbreak of Covid-19 increased the length of the friction period. Our illustrative case revealed that productivity costs in the US were over a third lower using the study-specific friction period (56 days) compared with the conventionally assumed 90-day friction period applied in the literature as a default measure.

CONCLUSIONS

Our results expand the potential application of the FCA outside of Europe and will support greater utilisation of the FCA and wider inclusion of productivity costs in societal-based economic evaluations based on the use of widely available and updated key labour market variables in our selected countries.

Cost-of-Illness Analysis of Long-Term Health Care Resource Use and Disease Burden in Patients With Pulmonary Embolism: Insights From the PREFER in VTE Registry

Background As mortality from pulmonary embolism (PE) decreases, the personal and societal costs among survivors are receiving increasing attention. Detailing this burden would support an efficient public health resource allocation. We aimed to provide estimates for the economic and disease burden of PE also accounting for long-term health care use and both direct and indirect costs beyond the acute phase. Methods and Results This is a cost-of-illness analysis with a bottom-up approach based on data from the PREFER in VTE registry (Prevention of Thromboembolic Events-European Registry in Venous Thromboembolism). We calculated direct (clinical events and anticoagulation) and indirect costs (loss of productivity) of an acute PE event and its 12-month follow-up in 2020 Euros. We estimated a disability weight for the 12-month post-PE status and corresponding disability adjusted life years presumably owing to PE. Disease-specific costs in the first year of follow-up after an incident PE case ranged between 9135 Euros and 10 620 Euros. The proportion of indirect costs was 42% to 49% of total costs. Costs were lowest in patients with ongoing cancer, mainly because productivity loss was less evident in this already burdened population. The calculated disability weight for survivors who were cancer free 12 months post-PE was 0.017, and the estimated disability adjusted life years per incident case were 1.17. Conclusions The economic burden imposed by PE to society and affected patients is considerable, and productivity loss is its main driver. The disease burden from PE is remarkable and translates to the loss of roughly 1.2 years of healthy life per incident PE case.

Cancer Premature Mortality Costs in Europe in 2020: A Comparison of the Human Capital Approach and the Friction Cost Approach

The inclusion of productivity costs can affect the outcome of cost-effectiveness analyses. We estimated the value of cancer premature mortality productivity costs for Europe in 2020 using the Human Capital Approach (HCA) and compared these to the Friction Cost Approach (FCA). Cancer mortality data were obtained from GLOBOCAN 2020 by sex and five-year age groups. Twenty-three cancer sites for 31 European countries were included. The HCA and the FCA were valued using average annual gross wages by sex and age group and applied to Years of Potential Productive Life Lost. 2020 friction periods were calculated and all costs were in 2020 euros. Estimated cancer premature mortality costs for Europe in 2020 were EUR 54.0 billion (HCA) and EUR 1.57 billion (FCA). The HCA/FCA cost ratio for Europe was 34.4, but considerable variation arose across countries (highest in Ireland: 64.5 v lowest in Czech Republic: 11.1). Both the HCA and the FCA ranked lung, breast and colorectal as the top three most costly cancers in Europe, but cost per death altered rankings substantially. Significant cost differences were observed following sensitivity analysis. Our study provides a unique perspective of the difference between HCA and FCA estimates of productivity costs by cancer site and country in Europe.

Friction Costs and the Chain of Vacancies Problem: A Novel Vacancy Multiplier Solution

OBJECTIVES

A key criticism of applying the friction cost approach (FCA) to productivity cost estimation is its focus on a single friction period. A more accurate estimate of the friction cost of worker absence requires consideration of the chain of secondary vacancies arising from the opening of a new primary vacancy. Currently, empirical evidence on this is almost absent. We suggest an original approach to empirically estimate productivity costs that include a chain of secondary vacancies.

METHODS

The vacancy multiplier is based on labor market flows and transition probabilities between states of employment, unemployment, and economic inactivity. It is a summed infinite geometric series using a common ratio e_t - the probability of an employed person filling a new job vacancy in a given year. We report vacancy multipliers for 30 European countries for 2011-2019.

RESULTS

The average multiplier across Europe is 2.21 (standard deviation [SD] = 0.40) in 2019, meaning that every new primary vacancy created a chain of secondary vacancies that increased the primary friction cost by a factor of 2.21. The equivalent multiplier is 1.99 (SD = 0.37) between 2011 and 2019. Romania had the lowest country-specific multiplier (1.11 in 2011), and Greece the highest (4.51 in 2011).

CONCLUSIONS

Our results highlight the extent of underestimation of current FCA costs, comprise a resource for future researchers, and provide an implementable formula to compute the multiplier for other countries.