Full text of DOI:10.1017/S0266462300103228

International Journal of Technology Assessment in Health Care, 16:4 (2000), 1193–1200.
Copyright �c 2000 Cambridge University Press. Printed in the U.S.A.
SOCIOECONOMIC COSTS OF
RHEUMATIC DISEASES
Implications for Technology Assessment
Dick Jonsson
Magnus Husberg
Link o¨ ping University
Abstract
Objectives: To study the socioeconomic impact of rheumatic illness in Sweden and to discuss the
consequences for technology assessment studies.
Methods: A cost-of-illness study based on data from official statistics and treatment studies.
Results: The total socioeconomic cost was 52 billion Swedish kronor (SEK) in 1994. The imbalance
between direct (10% of total) and indirect costs (90effectiveness of the healthcare sector, the need for
new treatment methods, appropriate information systems, and technology assessment studies as well
as the institutional arrangements for rehabilitation and basic medical research.
Conclusions: A discussion of solutions for financial cooperation between county councils and regional
social insurance offices should be considered. The new biotechnological pharmaceuticals will increase
the cost for drugs in health care about 20 times, but the total socioeconomic cost for society may remain
at the same level due to a decrease of inpatient costs and indirect costs for loss of production as well as
a decrease of transfer payments from social insurance. It is unavoidable that the new pharmaceuticals
require priority discussions and active resource allocation in health care and in other sectors of society.
Keywords: Rheumatic diseases, Socioeconomic, Cost of illness, Quality of life, Rehabilitation
Rheumatic disease in society is an issue of major importance. When resources in the health-
care sector diminish, decision makers are brought face-to-face with difficult decisions of pri-
oritizing treatment among patients. To make these decisions, one must have an information
base that illustrates the costs and effectiveness of healthcare interventions. Musculoskeletal
diseases are common contributors to the number of early retirement pensions and days of
sick leave (16;17). Approximately 30% of all sick leave days are caused by pain in the back,
neck, or shoulders. In 1987, an estimated 30 million sick leave days were attributed to back
disorders. The direct costs for health care in 1990 were estimated at 1,400 million Swedish
kronor (SEK), and the indirect costs at 22.5 million SEK (34). A questionnaire study from
two primary healthcare areas in Sweden found that 45% of the subjects aged 25 through 74
years stated they had been troubled by musculoskeletal pain that had persisted more than
6
months (2). Population studies have estimated that 1 million people in Sweden, 16% of
the population, between the ages of 16 and 84 years have musculoskeletal diseases, with
4% more women than men having these diseases (31). As regards more specific diagnoses,
4
the prevalence rates are 0.7% to 1.6% for rheumatoid arthritis, about 0.06% for juvenile
arthritis, 1% to 1.9% for soft tissue rheumatism, and 8.5% for arthrosis (36).
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In Western countries, back and neck pain are leading causes of sick leave compensation
and early retirement expenditures (22;38). The costs for back pain have increased over time
(33). It was found that the costs for back pain amounted to approximately 1.7% of the gross
national product, and 7% of the expenditure was spent on health care. Half of this cost
was attributed to hospital visits, and 6% to visits in primary (37). Indirect costs accounted
for 93% of the total cost. The mean total cost per case for absenteeism and disability was
US $9,493. There are indications that back pain management programs (18) and certain
occupational-oriented rehabilitation programs(20) could be effective. A review of 23 studies
based on different economic methods showed that injury prevention programs and post-
incidence management programs for patients with low back pain appear to save costs as a
result of reduced absenteeism (11;12).
The economic impact of rheumatologic disorders on society has been recognized,
as well as treatment effects, costs for different treatment methods, and health economic
evaluations (9;28). Research has shown that there is not a trend toward increasing incidence
with declining social class (4). The economic impact of arthritis in the United States was
estimated to exceed $60 billion in 1988 (26), and a high cost for osteoarthritis has been noted
(
10). The indirect costs for rheumatoid arthritis have been shown to exceed the direct costs,
and further knowledge is needed about allocating resources to effective treatment methods
7). Another study showed that treatment of rheumatoid arthritis correlated to increased
(
costs for disability pensions but decreased costs for sick leave (19). In 1990, the average
annual cost per patient for rheumatoid arthritis in Sweden was estimated at SEK 60,000,
and the cost increased with declining locomotive scores (13). The mean annualized direct
costs for juvenile rheumatoid arthritis was estimated at US $8,000, while the average cost
for families was estimated at $1,500, corresponding to 5% of mean family income (1).
The total annual cost for a hip fracture in the United States has been calculated at
$37,000 (6). In Sweden, the direct cost per patient for a hip fracture during 12 months has
been estimated at US $40,000. The potential cost saving per patient from preventing hip
fractures was about $22,000. Total costs for hip fractures among women can be explained
by age, mortality during the year after fracture, type of fracture, costs before fracture, and
hospital admission (39). The direct cost for primary care was 1% of the total direct cost
for a hip fracture (5). By emphasizing continuity in the postoperative phase, the total cost
for treatment and rehabilitation of a hip fracture can be decreased by 12% (32). There are
studies that indicate that the use of wrist orthoses and different special kitchen utensils led
to decreased pain and improved function inpatients with rheumatoid arthritis. One study
established that the effects are good compared to the costs (25). Another study indicates that
training programs increase the use of, and benefit from, certain assistive devices (8). In some
trials, health care has been allocated resources to help reduce the costs to the social insurance
system. A study of rehabilitation teams in ambulatory care (14) showed that healthcare costs
decreased and the total cost to society increased. Overviews that illustrate the international
research in the field of rehabilitation (15;21) show that more health economic studies are
needed to draw any general conclusions as to whether the costs correspond to the effects
achieved.
OBJECTIVE AND METHODS
The aim of this study is to examine the socioeconomic consequences of rheumatic diseases
from a societal perspective. A rather broad definition of rheumatic conditions is used.
The diagnoses in the statistics concerning health care and social insurance are available
via the ICD system, the so-called 99 codes. The groups are rheumatoid arthritis (code 79),
osteoarthrosis(code80), backdiagnoses(code81), andotherdiseasesofthemusculoskeletal
system (code 82).
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Socioeconomic costs for rheumatic diseases
Doing a cost-of-illness study enables one to compare the direct and indirect economic
costs and study how these costs are divided among different types of healthcare providers.
Then it is possible to identify potential deficiencies, which can be subject to discussion. The
socioeconomic costs are generally calculated by the prevalence approach, but the value of
production loss due to people taking early retirement has been calculated from an incidence
approach due to the lack of prevalence data. Direct costs refer to those costs, which arise in
society when patients with rheumatic diseases are given health care. These costs consist of
healthcare consumption divided among primary care, outpatient care, inpatient care, insti-
tutional care, and medications. The indirect costs are the costs that arise because patients
cannot work; a so-called production loss arises. The costs have been taken from public
statistics, internal reports, data output, and other statistics available in the field. The con-
sumption of inpatient care has been taken from the National Board of Health and Welfare’s
register of institutional care for 1981, 1986, and 1991. Primary care consumption and the
use of medications have been estimated with the help of information from the Diagnosis-
Prescription Survey. This is a biannual survey including 6% of all prescribing physicians in
Sweden where individual data are extrapolated to the national level (3). Over-the-counter
(OTC) medications, which do not require a prescription, are not covered by the survey.
Primary healthcare consumption data have also been taken from the Tierp Survey, a survey
that has been gathering population data since 1975 (29). As regards sick leave, diagnosis-
related statistics are published only about every tenth year. The estimates in this study have
been done by recalculating the figures for 1990 by adjusting for inflation and changes in
consumption of care (24). Calculations of production loss resulting from early retirement
pensions are based on recently granted pensions and complemented with information con-
cerning the stock of people with early retirement pensions (23). All costs were calculated for
the normal retirement age of 65 years. Short-term sick leave without physician certification
is associated with some uncertainty for diagnoses such as back problems.
Healthcare Utilization
Musculoskeletal diseases accounted for 4.8% of all care episodes and 3.4% of all inpatient
days in short-term care. Although the number of care episodes increased during the period,
they became shorter. This led to a decrease in the total number of days of care for the groups
as a whole. The trend toward more but shorter episodes of care was not unique for these
diagnoses. The same trend was observed in large parts of the healthcare sector during this
period (30).
Physician visits increased in both primary care centers (ambulatory care) and private
practices, while visits to hospitals decreased. Looking at trends for the healthcare sector
overall, the number of visits to doctors in private practice increased by nearly 50% between
1985 and 1993. During the same period, primary care visits increased by 10%, and visits
to doctors in hospitals increased by less than 2%.
Costs
When reviewing both primary and institutional care, a shift has taken place toward less
expensive forms of care for patients with musculoskeletal diseases. Institutional care ad-
missions have increased, but the length ofstay isshorter. Visitsto doctorshave shifted toward
the less expensive forms of primary health care and private care. Given the distribution of
institutional care days between nursing homes and clinics, the average cost per care day in
long-term care was SEK 1,567. In 1994, it cost about SEK 680 to visit a doctor in primary
care. The same year, an outpatient visit to a doctor in a hospital cost about SEK 1,300 (de-
pending on the type of clinic), while a visit to a private practitioner cost about SEK 390 (35).
The cost for ambulatory health care was estimated to be SEK 2,000 million in 1994.
Visits to hospitals accounted for the major part of the total costs. A visit to a hospital is
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Jonsson and Husberg
more expensive since it includes tests, minor procedures, and input from a greater number
of people. Institutional care for the diseases cost about SEK 2,500 million. Short-term
institutional care cost about SEK 1,900 million, and long-term care about SEK 700 million.
The diagnostic groups responsible for the major share of the costs for institutional care were
rheumatoid arthritis and osteoarthrosis. These diagnostic groups also accounted for a high
proportion of the costs for institutional care in the form of long-term care.
Costs for medications containing gold decreased between 1987 and 1994. During the
same period, costs increased for different methotrexate medications and these started to be
used even for diagnoses other than rheumatoid arthritis. The costs for nonsteroidal anti-
inflammatory drugs (NSAIDs) decreased during the same period. Apart from the direct
costs for a medication, the use of a medication can generate extra costs for monitoring and
treating side effects (27). The total cost for medications was SEK 400 million. The direct
cost for medication was a relatively small part of the total healthcare cost (8%). The groups
of medications that accounted for the greatest share of the total medication costs were anti-
inflammatory and anti-rheumatic medications, and above all, NSAIDs, gastric medicines,
laxatives, pain relievers, and muscle relaxants.
The cost of sick leave in 1994 was about SEK 16,600 million. The group of back
disorders and other diseases in musculoskeletal organs were responsible for the major part
of these costs. Sick leave due to rheumatoid arthritis and osteoarthrosis was a relatively
minor part of the costs. Problems in the musculoskeletal system were the reason behind
about 43% of the early retirement pensions. Such problems accounted for 48% of the newly
granted early retirement pensions. More women than men received early retirement pen-
sions. This was the case for all the diagnostic groups studied. Only the osteoarthrosis group
demonstrated a fairly even gender distribution. The group “other diseases in musculoskele-
tal organs” demonstrated the greatest gender difference. This group included different types
of soft tissue rheumatism, which is much more common among women. The diagnostic
groups of “back” disorders and “other diseases in musculoskeletal organs” accounted for the
greatest part of the increase in recently granted early retirement pensions, and the greatest
share of the increase was attributed to those over 50 years of age. Early retirement pensions
due to osteoarthrosis also increased. For rheumatoid arthritis there was even a marginal
decrease in the younger age groups. In total these cost SEK 31,000 million in the form of
production losses. “Back” diagnoses were mainly responsible for early retirement pensions.
Looking at the number of early retirement pensioners, women dominate greatly.
The socioeconomic costs for these diseases are high. The total cost for all groups is
estimated to be SEK 53,000 million (Table 1), placing rheumatic disorders in a class with
cardiovascular diseases and psychiatric illnesses and among the most expensive illnesses
in society. The distribution between indirect and direct costs highlights the small amount
of resources directed to health care. The indirect costs resulting from these diseases not
responding effectively to treatment are generally high. The proportion of indirect costs
varies among groups (Figure 1). For rheumatoid arthritis, the proportion was about 67%,
which corresponds to a normal distribution. For the other diagnostic groups, the distribution
was more extreme. For osteoarthrosis the proportion was 87%, for “back” diagnoses about
97%, and for “other diseases in musculoskeletal organs” it was 91%. It is plausible to
characterize the diseases as social insurance diseases, due to the high expenditures for
payment of sickness cash benefits and early retirement pensions.
DISCUSSION
In recent years, the healthcare sector has moved toward a greater utilization of primary care
and shorter institutional care episodes. This is also true for rheumatic diseases. Between
1981 and 1993, the number of admissions to institutional care increased. The diagnostic
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Socioeconomic costs for rheumatic diseases
Table 1. Total Socioeconomic Costs in 1994, Million SEK
Rheumatoid
arthritis (79)
Costs
Arthrosis (80)
Back (81)
Other (82)
Sum
Inpatient care
Short term
Long term
Sum
471
227
698
567
172
739
195
40
235
627
231
858
1,860
670
2,530
Outpatient care
Primary health care
Hospital visits
Private practitioners
Drugs
24
205
7
70
306
1,004
84
117
26
55
282
1,021
181
224
55
137
597
832
405
634
122
148
1,309
2,167
694
1,180
210
410
2,494
5,024
Sum
Total direct cost
Loss of production
Sick leave
Early retirement
Total indirect cost
Total cost
584
1,319
1,903
2,907
988
5,410
6,398
7,419
9,308
14,949
24,257
25,089
5,734
9,445
15,179
17,346
16,615
31,123
47,738
52,762
groups that accounted for the greatest share of the costs for institutional care were rheuma-
toid arthritis (code 79) and osteoarthrosis (code 80). The cost for visits to hospitals repre-
sented the largest share of outpatient care. Consumption of NSAIDs, gastric medicines, and
different types of pain relievers represented the major share of costs for medication.
The greatest share of production loss due to sick leave was attributed to “back” diag-
noses (code 81) and “other diseases of musculoskeletal organs” (code 82). “Back” diagnoses
was the main reason for early retirement pensions, which represent the greatest socioeco-
nomic cost for all of the diagnoses. The high proportion of indirect costs could be interpreted
to mean that treatment methods available today are not sufficiently effective or are not being
used to a sufficient extent, but also that basic medical research is needed. The high indirect
cost may also reflect that people of working age, and not only the elderly, are afflicted by
rheumatic conditions, and the conditions are chronic. Hence, there may be some room to in-
crease healthcare contributions for these groups without increasing the total cost to society.
Figure 1. Distribution of socioeconomic costs, 1994 (%).
INTL. J. OF TECHNOLOGY ASSESSMENT IN HEALTH CARE 16:4, 2000
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Jonsson and Husberg
Of course, this would apply only on the condition that effective forms of care are available
and used for the right groups. To be able to assess this, however, it would be necessary to
evaluate the individual treatment alternatives.
POLICY IMPLICATIONS
The imbalance between direct (10%) and indirect costs (90%) raises questions about the
cost-effectiveness of the healthcare sector, the need for new treatment methods, appropriate
information systems, and technology assessment studies as well as the institutional arrange-
ments for rehabilitation and basic medical research. There are many reasons, which support
further socioeconomic studies. The introduction of new and expensive biotechnological
pharmaceuticals for treatment of patients with rheumatoid arthritis is a good example. The
economic consequences for health care and society will be substantial. Only a few health
economic studies in technology assessment have been carried out in this field, and additional
studies are needed to facilitate priority setting in health care.
Rheumatoid arthritis has been discussed in society, especially with respect to changed
resource allocation in health care and the introduction of new and expensive pharmaceuti-
cals. The new biotechnological pharmaceuticals will increase the cost for pharmaceuticals
in health care about 20 times, but the total socioeconomic cost for society may remain at the
same level due to a decrease of inpatient costs and indirect costs for loss of production as
well as a decrease of transfer payments from social insurance. Against this background, a
discussion of solutions for financial cooperation between county councils and regional so-
cial insurance offices should be considered. It is unavoidable that the new biotechnological
pharmaceuticals require priority discussions and active resource allocation in health care
and in other sectors of society. Therefore, it is necessary to know the treatment effects on
patient’s health status and quality of life, the direct treatment costs, and indirect costs for
society, including transfer payments from social insurance and quality of care as well as the
cost-effectiveness of the treatment methods.
Long-term evaluations are necessary, particularly with respect to human suffering,
therapeutic effects, and side effects but also with respect to the great accumulated cost of
chronic diseases compared to short-term diseases. To reduce the uncertainty of accessible
statistics and information about treatment methods, it would be desirable if the budgeting
and bookkeeping were set up in a uniform manner among the responsible authorities. To be
able to follow treatment methods, the exchange of statistics and information between the
authorities also should be strengthened.
It is desirable to place national resources in interdisciplinary and health economic
evaluations for the purpose of improving the basis for the prioritization discussions that
will become necessary in health care and social insurance. Certain neglected areas should
be prioritized, for example, new and expensive drugs and rehabilitation. Great emphasis has
been placed on the importance of priority analyses of chronic illnesses, and it is no longer
acceptable to neglect them. In addition, it is important to evaluate the collaboration between
clinics and primary health care, as well as the coordination of the qualifications of medical
and paramedical treatment methods. The same applies to strategies that reduce high social
costs resulting from inadequate coordination between the authorities who are responsible
for the health and welfare of the citizens. Finding new types of cost-effective treatment
methods, reduced work absence due to illness, improved health and quality of life as well as
improved use of a society’s resources may be difficult without the use of planned strategies,
including health economics. A good method of attack is interdisciplinary evaluations and
the interplay between patients and their relatives, patient associations, health and nursing
care, the community, the social insurance office, employers, and the authorities in the labor
market as well as researchers at universities and colleges.
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Socioeconomic costs for rheumatic diseases
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