Environmental Project, 929 – Valuation of Chemical related Health Impacts - Estimation of direct and indirect costs for asthma bronchiale, headache, contact allergy, lung cancer and skin cancer

Valuation of Chemical related Health Impacts

2 English summary

The purpose of the project is to estimate the unit costs of selected chemical related diseases. The estimates are expected to be used in connection with economic analyses in the area of chemicals.

The unit costs shall reflect the costs for the entire society following a case of the given disease. Therefore, the unit costs include the direct costs in terms of costs of treatment as well as the indirect costs in terms of the production loss and the individual welfare loss.

Focus in the present project will be on a detailed estimation of the direct costs supplemented with more rough assessment of the indirect welfare loss based on benefit transfer of key values.

The selected diseases are:

Asthma
Headache
Contact allergy
Lung cancer
Skin cancer

Method
The direct costs are estimated on the basis of published studies and other available information supplemented by expert judgements. The direct costs include the public costs in connection with the treatment. Possible own payment from the patients is not included since it is included in the individual welfare loss estimate.

The individual welfare loss is estimated by benefit transfer from existing willingness-to-pay studies. The values are corrected for differences in prices and purchasing power in connection with benefit transfer from foreign studies.

The production loss is estimated by the average primary income per person in and outside the Danish working force.

Asthma
Chemicals may release asthma attacks for asthma patient but does only very rarely release the disease itself. Following this, focus is on the unit cost of a single asthma attack. This is supplemented by an example calculation of the total lifetime costs for a patient who has 3 attacks a year.

The unit cost per asthma attack is estimated to a little less than DKK 2,000, where the direct costs amount app. DKK 420, welfare loss app. DKK 1,200 and the production loss app. DKK 390.

Headache
Only very little evidence regarding the relationship between chemicals and headache exists. In the present project, the unit cost of a moderate case of headache is estimated, defined as "two painful and splitting headaches during the day. Each period of headache will last two hours". This is supplemented by a cost example of a patient experiencing 10 days of headache during a year (including the costs of diagnosis settlement etc.).

The unit cost per episode of headache is estimated to a little more than DKK 360. Of this, the direct costs amount to practically nothing (DKK 1.30), while the welfare loss and the production loss each amount to around DKK 180.

Contact allergy
Various chemicals may result in contact allergy, which is a chronic disease. The unit cost is estimated over the full remaining life time of the patient under the assumption of an average age of 40 years when the disease occurs and a yearly discount factor of 3%.

The unit cost of contact allergy over the entire remaining life time is estimated to app. DKK 290,000. The direct costs amount a little more than DKK 40,000, the welfare loss around DKK 230,000 and the production loss DKK 20,000.

Furthermore, an example of the use of the unit cost estimates is given by an illustrative estimation of the health related benefits of the prohibition against nickel in selected products agreed upon in 1989.

It is assumed that the regulation has resulted in a reduction in nickel allergy of 2,500 cases per year (increased linearly from 0 to 2,500 during the first 5 years of the prohibition).

The calculation is carried out for a time horizon of 20 years. By utilising the unit cost for contact allergy this results in a present value for the benefits of app. DKK 9.7 billion.

Lung cancer
Even though smoking is the main reason for the majority of the cases of lung cancer a number of chemicals may cause the disease as well. The mortality rate among the patient is rather high. The disease course is estimated by a Markov model and based on this the costs are estimated. It is assumed that the average age of the patient by the occurrence of the disease is 50 years along with a discount rate of 3% p.a.

The unit cost per case of lung cancer is estimated to app. DKK 9.7 m. The direct costs amount to around DKK 140,000, while the welfare loss is the most important component with a size of more about DKK 9.3 m. The production loss amounts to around DKK 250,000.

Skin cancer
Animal studies and observational human studies indicate that exposure to certain chemicals increases the relative risk of skin cancer. The disease is here limited to non-melanoma skin cancer, which is far less serious than melanoma skin cancer (birthmark cancer). The patients are normally treated within a year from the occurrence of the disease.

The unit cost per case of skin cancer is estimated to around DKK 250,000, of which the direct costs amount app. DKK 12,000, the welfare loss app. DKK 230,000 and the production loss a little less than DKK 7,000.

Summary of the unit cost estimates
The cost estimates are compared in the figure below. In general, it is seen that the welfare loss is the far most important cost component. At the same time, this cost component is far the most uncertain.

Figure: Summary of the unit cost estimates

Assessment of the uncertainty of the cost estimates
Besides the unit cost estimates a low and high estimate is provided. These can be interpreted as estimates corresponding to the 5 and 95%percentiles respectively.

The estimation of the low and high estimates is based on a rather overall assessment performed by the consultant instead of a mathematic estimation of the percentiles. The method is as follows: First, the main critical parameters are identified from the criteria of importance and degree of uncertainty. Next, estimates of low and high values of the parameters identified as very important and/or very uncertain are given.

On the basis of these parameter values the low and high estimates are established. The result is following range for the unit cost estimates:

Asthma: DKK 900 - 2,600
Headache: DKK 200 - 6000
Contact allergy: DKK 79,000 - 690,000
Lung cancer: DKK 1.8 m. - 11.8 m.
Skin cancer: DKK 28,000 - 519,000.