Wendy Max

Book Review from The New England Journal of Medicine — Book Review

Objective:To develop estimates of the direct and indirect costs of smoking for California in 1999.Methods:A prevalence based approach was used to estimate the annual costs of smoking. Econometric models were used to estimate the smoking attributable fraction (SAF) for direct costs (hospitalisations, ambulatory care, prescription drugs, home health care, and nursing home services) and indirect costs due to lost productivity from smoking related illness. The models controlled for socioeconomic factors and other risk behaviours. Epidemiological methods were used to estimate the SAF for indirect costs due to lost productivity from premature deaths. The SAFs were applied to total health care expenditures, days lost, and deaths to obtain smoking attributable total costs.Results:In 1999, the total costs of smoking in California were $15.9 billion, $475 per resident, and $3331 per smoker. Direct costs were $8.6 billion (54% of the total), indirect costs due to lost productivity from illness were $1.5 billion (10%), and indirect costs due to premature deaths were $5.7 billion (36%). The cost of smoking was $9.4 billion for men and $6.3 billion for women. There were 43 137 deaths attributed to smoking, representing a total of 535 000 years of life lost. The value of life lost per death averaged $132 000, or 12.4 years.Conclusions:California smoking related costs are high. The cost methodology presented is useful for other states and nations interested in estimating their costs of smoking. Cost estimates can be used to evaluate the level of cigarette taxes and other policies related to smoking.

BACKGROUND: Prostate cancer is the most common malignancy diagnosed among men in the United States. This article reviews previous studies of the annual cost of all cancers and of prostate cancer in the United States and California and estimates the direct and indirect costs of prostate cancer in California in 1998.METHODS: Hospitalization costs, including costs of primary and secondary diagnoses of prostate cancer, were derived from the California Hospital Discharge data set (CHDS). Charges were converted to costs using hospital specific cost‐to‐charge ratios and an imputed cost for Health Maintenance Organization hospitalizations. Other direct medical costs were derived from the 1997 Medical Expenditure Panel Survey. Indirect mortality costs are the product of the number of deaths and the expected value of a male's future earnings taking into account age at death, earning patterns at successive ages, labor force participation, imputed value of housekeeping services, and a 3% discount rate.RESULTS: Prostate cancer direct health care costs in California were estimated at $180 million, and lost productivity from premature death was estimated at $180 million, for a total cost of $360 million in 1998. The disease is largely one of older men; hospitalization costs account for three‐fifths of total direct costs, and Medicare and private health insurance share almost equally in paying for hospital care.CONCLUSIONS: It is critical to identify cost‐effective screening efforts that permit early detection of prostate cancer to reduce illness, premature deaths, and the high costs of prostate cancer. Cancer 2002;94:2906–13. © 2002 American Cancer Society.DOI 10.1002/cncr.10532

The number of patients with Alzheimer's disease (AD) and related dementia treated in managed care organizations (MCOs) is increasing, and this trend is expected to continue. Therefore, it is critical that MCOs develop disease management strategies for this population. To review the literature on the prevalence, costs, and treatment of AD and related dementia. Review of published articles from MEDLINE and peer-reviewed journals. Prevalence of AD and related dementia is approximately 5.7% among those aged 65 and older. Prevalence data from claims-based studies of AD in managed care are lower, ranging from 0.55% to 0.83%. Costs for formal care average $27,672 per patient annually, with long-term care being the most costly component. Annual costs for informal care are estimated to be $10,400 to $34,517 per patient. Additional costs associated with AD include lost wages and productivity of patients and caregivers and costs associated with increased morbidity of caregivers. Donepezil treatment is well tolerated and has been extensively tested and evaluated in clinical settings. Early diagnosis and treatment of AD with donepezil has been shown to slow cognitive decline in AD. Although study findings regarding the cost offsets of donepezil-treated patients to date are mixed, there is a growing body of evidence to support the inclusion of this and other therapies into an MCO's AD treatment armamentarium. It is unlikely that MCOs will escape the increased prevalence and costs associated with AD. Opportunities exist through patient management programs targeted toward early diagnosis, effective use of medications, control of comorbidities, and patient and family support to partially offset these costs while providing quality patient care.

This study analyzed the effect of California's motorcycle helmet law on injury costs. An economic evaluation was performed using state hospital discharge data, county-level cost data, and statewide crash reports to estimate the costs, charges, and lost productivity from motorcycle injuries. Total and per person costs and changes in these costs were estimated. Total medical care costs were $35 million less in 1993 than in 1991, a reduction of 35%. Costs decreased for all payer categories, and 73% of the reduced hospitalization costs were attributable to reduced costs for patients with head injuries. Initial hospital costs for patients with head injuries were $18,527 compared with $10,350 for patients without head injuries. During the first 2 years of implementation of California's helmet law, there were reduced costs for injuries and fatalities and large dollar savings to the state and other payers compared with the previous year.

This paper discusses the development of estimates of the lifetime costs of injuries for 1985. Total costs are estimated to be $158 billion for the 57 million persons injured in 1985. Updating these costs to 1988, the results are even more impressive-$182 billion. We describe the methodology for estimating costs and discuss theoretical issues and past research. We develop an injury cost model to estimate direct costs, morbidity costs, and mortality costs. Cost estimates are presented by type of cost, age, sex, cause of injury, and class of injury. Finally, we explore the implications of our results for public health policy.