Economic Burden of Illness in Canada, 1993

Introduction

In 1991, the Economic Burden of Illness in Canada, 1986 ¹ was published by the Laboratory Centre for Disease Control (LCDC) in response to numerous requests for estimates of the cost of illness to Canadian society. The overwhelming response to the original report and continued requests for detailed information indicated the need for an up-to-date revision that would provide even finer detail than the original report.

The goal of this new document is to systematically estimate the 1993 economic impact of illness in Canada. This report provides a comprehensive overview of the distribution of the principal direct and indirect costs of illness using the human capital approach. The prevalence-based methodology determines "opportunity costs" to individuals and society that result from illness or injury, translating morbidity and premature mortality into direct and indirect costs.

Direct costs are the value of goods and services for which payment was made and resources used that could have been allocated to other uses in the absence of disease. Direct costs of health services include drugs and appliances, medical care provided by physicians and other health professionals, care in hospitals and other health care institutions, health science research, capital, administration, and various other health care expenditures. Indirect costs to society due to morbidity and premature mortality are measured by the present value of lost productivity due to long-term and short-term disability and premature death.

The Economic Burden of Illness in Canada, 1993 begins with a background on conceptual issues, a discussion of methodology used in this report and a summary of direct and indirect costs by cost component, diagnostic category, age and sex. The subsequent pages provide detailed information by cost component: sources, specific methodologies, assumptions, limitations and key results. An inclusive reference list (organized by report section) and appendices are provided at the end of the document.

As in the past, complete systematic national information about the cost of illness is not readily available. Since publication of the original report in 1991, we have acquired better data sources, refined our methods and included a sensitivity analysis of our indirect costs. Disability payments, which were included in the 1991 publication as direct costs, are excluded from this report because their inclusion led to double counting of costs. Improvements to this and other methodology make comparison of estimates between the two time periods unadvisable; differences may represent these improvements rather than actual changes in the distribution and costs of illness between the two years of data.

Detailed, reliable data about health care costs are of increasing importance in developing effective health strategies and allocating limited health resources as Canadian health care costs continue to rise, the population ages and resource allocations tighten. Cost-of-illness studies are a valuable resource to health planners, policy makers, researchers and other stakeholders (i.e. private sector, volunteer organizations, professional associations). In conjunction with other health indicators, this information helps explain the overall scope and magnitude of illness and provides substantive information on which to base such difficult decisions as setting program priorities and effectively allocating limited health resources.

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