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THE ECONOMIC COST
OF ARTHRITIS IN
NEW ZEALAND
ACCESS ECONOMICS PTY LIMITED ARTHRITIS NEW ZEALAND

Economic Cost of Arthritis
in New Zealand
TABLE OF CONTENTS
LIST OF ACRONYMS
Acknowledgements and Disclaimer
EXECUTIVE SUMMARY
Prevalence
Prevalence rates .4 Baseline prevalence 2005 to 2020 .7 Obesity scenarios .13 Health sector costs
Hospital costs.18 ICD-10 codes for arthritis and NZHIS data .19 Public inpatient costs .21 Private inpatient costs .24 Outpatient costs .25 General practice costs .26 GP services attributable to arthritis .26 Pharmaceutical costs.28 RNZCGPRU data.31 Pathology and diagnostic imaging costs.32 Diagnostic imaging.33 Research costs .34 Other costs from survey data.36 Specialist costs.36 Allied health costs .37 Aged care costs .37 Summary of health system costs.37 Indirect costs
Productivity losses .41 Lower workforce participation .41 Temporary work absences.43 Taxation revenue foregone .43 Informal and formal community care .45 Hours of community care provided .45 Value of care .46 Other indirect costs .47 Deadweight losses from welfare payments .47 Aids, modifications and travel .48 Summary of the financial costs of arthritis .48 Burden of disease
Suffering and premature death methodology .50

Economic Cost of Arthritis in New
Valuing life and health .50 DALYs and QALYs .51 Discount rate .53 Estimating the burden of disease for arthritis in 2005.55 Valuing the burden of disease .57 References
Appendix A – NZHS prevalence data
Appendix B– NZHS questions
Appendix C – RNZCGPRU pharmaceutical and pathology data
Appendix D – Health data surveys

TABLE OF FIGURES
Figure 1-1: Age-specific prevalence rates, arthritis, New Zealand, 2003 Figure 1-2: Arthritis in adults, by ethnic group & gender (age-standardised) Figure 1-3: Raw prevalence rates by type of arthritis, New Zealand 2003 Figure 1-4: Age-specific prevalence rates, all arthritis, by ethnicity, New Zealand, 2003 Figure 1-5: Age-specific prevalence rates, Mäori, by gender, New Zealand, 2003 Figure 1-6: Prevalence by age & gender, New Zealand, 2005 Figure 1-7: Projected prevalence 2005 to 2020 Figure 1-8: Obesity prevalence by gender, 1977 to 2003 Figure 1-9: Average annual growth in obesity rates, 1977 to 2003 Figure 1-10: Obesity and arthritis prevalence, South Australia Figure 1-11: Arthritis prevalence 2005 to 2020 under obesity scenarios Figure 2-1: Public inpatient costs by type of arthritis, 2005 Figure 2-2: Arthritis public inpatient costs by age and gender, $m, 2005 Figure 2-3: Hospital costs arthritis, NZ, 2005 Figure 2-4: Cost of last visit to general practitioner, by gender Figure 2-5: HRC research projects relating to arthritis, 2001-2004, $m Figure 2-6: Summary of health costs of Arthritis, New Zealand, 2005 Figure 2-7: Share of health costs by type of cost, NZ & Australia (% total) Figure 2-8: Per capita health costs by type of cost, NZ & Australia (NZ$, 2005) Figure 3-1: Employment rates by age, New Zealand, 2003 Figure 3-2: Age-standardised employment rate, NZ, 2003 Figure 3-3: Arthritis, financial cost summary, 2005, % total Figure 4-1: Burden of disease by type of arthritis, 2005 Figure 4-2: Burden of disease by gender & ethnicity, New Zealand, 2005 Figure 4-3: Comparison of burden of disease, New Zealand, 1996 Figure B-1: Survey questions from the NZHS

Economic Cost of Arthritis
in New Zealand
TABLE OF TABLES
Table 1-1: Arthritis prevalence rates – meta analysis Table 1-2: Baseline prevalence projections 2005 to 2020 Table 1-3: Population and arthritis shares, Mäori and non-Mäori Table 1-4: Prevalence by age, gender, ethnicity and type of arthritis, 2005 Table 1-5: Prevalence by age, gender, ethnicity and type of arthritis, 2010 Table 1-6: Prevalence by age, gender, ethnicity and type of arthritis, 2020 Table 1-7: Impact of changing obesity rates on arthritis prevalence Table 2-1: Classification of arthritis, ICD-10 codes Table 2-2: Arthritis public inpatient costs by ICD-10 code, 2003-04 Table 2-3: Arthritis public inpatient costs by age and gender, $m, 2005 Table 2-4: Public inpatient costs by ethnicity and facility, $m, 2005 Table 2-5: Triangulation of inpatient data Table 2-6: Consultations for arthritis, by other problems managed, 2003 Table 2-7: M1 prescription drugs: price, quantity & value, yr to Mar '05 Table 2-8: M1 over-the-counter drugs: price, quantity & value, yr to Mar '05 Table 2-9: Top 20 drugs prescribed, arthritis relative to total, 2003 Table 2-10: Top 20 laboratory referrals, arthritis relative to total, 2003 Table 2-11: HRC Research projects relating to arthritis, 2001-2004, $ Table 2-12: Summary of health costs of arthritis, New Zealand, 2005 Table 3-1: Cost of reduced employment, New Zealand, 2005 Table 3-2: Cost of foregone taxation, New Zealand, 2005 Table 3-3: Effect of physical health on daily activities, New Zealand, 2003 Table 3-4: Value of care provided to people with arthritis, New Zealand, 2005 Table 3-5: Arthritis, financial cost summary, 2005, $m Table 4-1: Estimates of VSL, various years, US$, A$ and NZ$ Table 4-2: Burden of disease, DALYs by type of arthritis, New Zealand, 2005 Table 4-3: Cost of suffering from arthritis, $m, New Zealand, 2005 Table A-1: NZ prevalence, all arthritis, by age, gender & race, 2002-03 Table A-2: NZ prevalence, osteoarthritis, by age, gender & race, 2002-03 Table A-3: NZ prevalence, rheumatoid arthritis, by age, gender & race, 2002-03 Table A-4: NZ prevalence, ‘other' arthritis, by age, gender & race, 2002-03 Table C-1: Prescriptions, arthritis consultations vs total population Table C-2: Laboratory referrals, arthritis consultations vs total population

Economic Cost of Arthritis in New
LIST OF ACRONYMS
AF attributable Australian Institute of Health and Welfare bn billion COX-2 Cyclo-oxygenase-2 DALY disability adjusted life year gross domestic product practitioner/practice Health Research Council (of New Zealand) International Classification of Disease Tenth Revision m Million MOH Ministry magnetic resonance imaging non-steroidal anti-inflammatory drugs New Zealand Health Information Service New Zealand Health Survey OA Osteoarthritis OECD Organization for Economic Cooperation and Development purchasing power parity Royal New Zealand College of General Practitioners Research Unit systemic lupus erythematosus Statistics New Zealand tumour necrosis factor value of a life year value of a statistical life years of healthy life lost due to disability years of life lost due to premature mortality

Economic Cost of Arthritis
in New Zealand
ACKNOWLEDGEMENTS AND DISCLAIMER
This report was prepared by Access Economics for Arthritis New Zealand. Access Economics acknowledges with appreciation the input from respondents to the surveys on rheumatology, orthopaedic surgery, physiotherapy, occupational therapy, outpatient services, aged care and diagnostic imaging. Gratitude is also extended for comments, prior research and expert input by: Ms Kate Thomson President, Arthritis New Zealand Mr Chris Lewis Information Analyst, New Zealand Health Information Service, Wellington Ms Rebecca Didham Senior Research Analyst, Royal New Zealand College of General Practitioners Research Unit, Dunedin Dr Andrew Harrison Senior Lecturer , Department of Medicine Wellington School of Medicine and Health Sciences, University of Otago Dr Susan Rudge New Zealand Rheumatology Association, Hutt Hospital, Lower Hutt Professor Graeme Jones Head Musculoskeletal Unit, Menzies Research Institute, Hobart Dr Andre George Manager Research Contracts, Health Research Council of New Zealand, Auckland Mrs Toni Hobbs Register Co-ordinator, National Joint Registry, Christchurch Mr Craig Shaw Senior Research Executive, Dangar Research, Sydney Mr James Fedorow Account Manager, Sales and Client Services, IMS Health, Sydney While every effort has been made to ensure the accuracy of this document, the uncertain nature of economic data, forecasting and analysis means that Access Economics Pty Limited is unable to make any warranties in relation to the information contained herein. Access Economics Pty Limited, its employees and agents disclaim liability for any loss or damage which may arise as a consequence of any person relying on the information contained in this document. All monetary figures quoted are in New Zealand dollars unless noted otherwise.

Economic Cost of Arthritis
in New Zealand
EXECUTIVE SUMMARY
In 2005, almost 522,000 New Zealanders aged 15 or over are living with at least
one type of arthritis. This equates to 16.2% of the total population aged 15 or
over, or around 1 in 6 people.
Over half are female (57.6%) and over half are of working age (15-64 years). 9.2% of people with arthritis are of Mäori descent, much lower than their population share (15.1%), largely because of the younger Mäori age distribution. Ž In younger age groups, arthritis is more common in Mäori people; in older age groups prevalence rates are similar due to the influence of osteoarthritis. Prevalence is expected to grow to around 719,300 people by 2020 (19.2% of the population aged 15 or over), approaching 1 in 5 people, largely due to demographic ageing. Obesity is a modifiable risk factor for arthritis.
18.1% of arthritis in females and 17.8% of arthritis in males is due to obesity (the ‘attributable fraction'). Ž If obesity continues to increase at the rate observed over the past few decades, then around 60,300 more people will havt current levels. If obesity could be completely eliminated by 2020, there would be almost 134,400 fewer New Zealanders with arthritis than in the base case. The total financial costs of arthritis in New Zealand in 2005 are estimated to be
$2.35 billion or 1.6% of GDP. Financial costs comprise health sector costs and
indirect costs.
In addition, the burden of disease – the years of healthy life lost because of arthritis – is estimated as 19,121 Disability Adjusted Life Years (DALYs) in 2005. Ž Converting this to financial terms using the value of a statistical life of
$3.9m for New Zealand and a discount rate of 3.8%, this equates to some
$2.56bn in suffering and premature death for those with arthritis in 2005.
Health sector costs of arthritis are estimated to be $563.5 million in 2005, 24% of
total financial costs.
Hospital costs represent around one third of health sector costs ($189.6m).
Ž
Public inpatient costs are 42% of hospital costs ($79.8m), and are dominated by osteoarthritic knee and hip surgeries. Private inpatient costs are estimated as $65.8m (35% of hospital costs) while outpatient services are estimated as $44.0m (23%). Pathology and imaging together are estimated to be 12% of health sector costs
($66.9m), quite a high share compared with other countries.
Out of hospital specialist services (mainly for rheumatologists and orthopaedic
surgeons) are also relatively high at $24.7m (4.4% of health sector costs).
In contrast, general practice (GP) and pharmaceutical health sector cost
shares are relatively low – 3% ($18.2m) and 7% ($40.5m) respectively.

Economic Cost of Arthritis in New
Allied health and aged care are around 12% ($67m) each of heath sector costs.
Research is 2% of health sector costs ($9.9m).
The remaining health costs comprise capital expenditures, expenditure on community health, public health programs, health administration and health aids and appliances, which together are estimated as $79.9m (14% of health sector costs) in 2005 for arthritis. The indirect costs of arthritis ($1.79bn) outweigh health costs more than 3 to 1.
People with arthritis are 5% less likely to be employed than those without
arthritis, based on New Zealand Health Survey data.
Ž
25,440 New Zealanders will not work in 2005 due to arthritis, costing over $1bn in lost productivity in 2005. In addition, temporary absences from work due to arthritis also impose costs of some $18m in 2005. Together lost production is the largest cost of arthritis, representing
nearly half (46%) of the total financial costs in 2005.
Informal care is the second largest cost at 23% of total financial costs
($536.7m), measured on a conservative opportunity cost basis.
Ž
The replacement value of this informal care is very large at $3.6bn, for activities of daily living only (excluding assistance with household tasks). Formal sector community care for people with arthritis costs a further $40m per annum. Aids, modifications and travel for people with arthritis are estimated to cost
$46.8m in 2005 (2% of total financial costs).
Deadweight costs arising due to the distortionary and administrative impacts of
raising additional taxation and making additional welfare payments are estimated
as $93m per annum (4%).
Arthritis is a highly prevalent and costly disease, necessarily a national health priority area due to the extent of its prevalence and socioeconomic impacts. Cost-effective interventions, including those targeted at reducing obesity, together with continued investment in research and development to delay the onset of osteoarthritis in particular, offer potential for substantial reductions in the future projected costs of the disease, and pathways to enhanced wellbeing for New Zealanders in the future. Access Economics
June 2005

Economic Cost of Arthritis in New
1. PREVALENCE
The best method of measuring community prevalence is through well-designed
clinical studies of populations, preferably longitudinal and prospective.
However, there do not appear to be such studies in relation to arthritis in New Zealand.
This is recommended, as such studies are very useful to inform policy makers in
relation to risk factors, impacts and the cost-effectiveness of interventions and
preventive activities.
In the absence of detailed New Zealand epidemiological studies, the best estimate of
community arthritis prevalence obtainable is from well-designed self-report surveys,
as these tend to capture some undiagnosed arthritis as well as almost all diagnosed
arthritis. Self-reported data has occasionally been criticised due to the allegation that
people:
do not have sufficient information to know whether or not they have a particular condition (differential self-diagnosis); may have recall problems; or may be ‘led' in the survey or due to other incentives to misrepresent or misclassify their condition. While this may be true in some instances, in general anonymous non-coercive self-reported data for current long term conditions that are not mental illnesses have tended to support prevalence estimates based on clinical studies, with no significant bias towards under or over-reporting (eg, Benitez-Silva et al, 2000). Moreover, more recent survey verification techniques are utilised (such as cross-checks with other household members or aged care facility staff, detailed questioning regarding the condition etc) in order to minimise any such potential bias. The Ministry of Health's New Zealand Health Survey (NZHS) provides such data. The most recent NZHS was conducted between August 2002 and September 2003 and had over 12,000 respondents including 3,990 Mäori, 790 Pacific peoples and 940 Asian people. Appendix A contains detailed prevalence rates by age, gender and ethnicity for arthritic conditions, as reported to the 2003 NZHS and provided by the Ministry of Health under a special data request. Appendix B provides the Survey questions from the NZHS. A key point to note in relation to the questions is that prevalence is based on a ‘Yes' answer to the question (Q22) "Have you ever been told by a doctor that you have arthritis?" so the estimate is of diagnosed arthritis. The follow-up question differentiates type of arthritis (that affects the person the most) – rheumatoid, osteoarthritis, other known type (specified) and ‘don't know'. The questions thus under-report different types of arthritis – since if a person has two kinds, only one is reported. Also, because some people do not know the type they have, rheumatoid, osteoarthritis and ‘other' will sum to less than the ‘total'. This is the reverse of the Australian National Health Survey, where significant comorbidity of different types of arthritis means that the sum of the components is greater than the total. Economic Cost of Arthritis in New
1.1 PREVALENCE
Prevalence rates of various arthritic and related conditions, from various sources across the New Zealand population as a whole, are summarised in Table 1-1. Appendix A provides details of the raw prevalence rates in Table A-1 to Table A-4. As would be expected, self-reported prevalence from the NZHS is considerably higher than surveys of prevalence within the primary care system, such as Taylor et al (2004)1. Such surveys only identify those people with arthritis who also seek medical attention for their condition within a certain period, and the methods typically search on keywords that may omit certain types of arthritis. However, results from the NZHS are very similar to Access Economics' estimates of prevalence in Australia in 2004, based on the Australian Bureau of Statistics' (2002) National Health Survey. TABLE 1-1: ARTHRITIS PREVALENCE RATES – META ANALYSIS
Taylor et al
Economics
year 2003 2003 2003 2005 Osteoarthritis 7.7% Rheumatoid arthritis All forms of arthritis 32.7% 20.4% 24.6% 32.8% musculoskeletal disorder Age-specific prevalence rates for both men and women derived from the NZHS are shown in Figure 1-1.2 The graph shows that the age-gender distribution of self-reported prevalence rates in New Zealand are broadly similar to those reported in other 1 Taylor et al (2004) estimated the burden of rheumatic (musculoskeletal) disorders in the New Zealand population by calculating GP consultation rates—as well as the influence of age, gender, ethnicity, and small-area deprivation on these consultation rates. Cases were identified from the Royal New Zealand College of General Practitioners database using search-strings of typical words used in consultation notes (for each of 10 rheumatic disorders). Rates were calculated from a denominator of the number of people attending at least once over a 12-month period to any of 22 contributing GPs. The independent effect of age, sex, ethnicity, and small-area deprivation was modelled using multiple logistic regression. Of 29,152 people attending their GP, 20.4% consulted with a rheumatic disorder. Older people, males, people who lived in more deprived areas, and Europeans were more likely to consult with a rheumatic disorder. With all rheumatic disorders, age was a significant influence upon consultation—especially osteoarthritis, gout, osteoporosis, and joint surgery. Mäori were more likely than Europeans to consult with gout, but they were slightly less likely to consult with back pain or regional pain disorders. Small-area deprivation had small influences upon people consulting with gout, regional pain, and back pain. Taylor et al (2004) noted that rheumatic (musculoskeletal) disorders form a significant part of the workload of GPs and this is significantly influenced by local demographic factors. Most of these conditions seen by GPs are non-inflammatory and non-surgical. Taylor et al (2004) concluded, as we do, that if a community-needs approach were taken, it is likely that the workload and associated costs estimated would be even greater. 2 Access Economics adjusted some of the raw prevalence data to account for missing data cells and cells where the data were deemed too unreliable for use. In particular, reported prevalence rates for the 75-84 age cohort were taken to represent prevalence in the cohort of people aged 75 years and over due to data inadequacy in the 85+ groups. This may be a conservative estimate, as arthritis prevalence may well increase in the 85+ group. Economic Cost of Arthritis in New
community-based surveys (Access Economics, 2005). Arthritis is more prevalent in older age groups, and is generally more prevalent in women than men. FIGURE 1-1: AGE-SPECIFIC PREVALENCE RATES, ARTHRITIS, NEW ZEALAND, 2003
Age Group
There was no significant difference in the age-standardised prevalence of arthritis between ethnic groups (Ministry of Health, 2004a, see Figure 1-2). FIGURE 1-2: ARTHRITIS IN ADULTS, BY ETHNIC GROUP & GENDER (AGE-STANDARDISED)
Source: Ministry of Health (2004a) p.53 Raw prevalence rates for osteoarthritis (across all age groups) are lower in Mäori than non-Mäori men and women, which drives the same result for all arthritis (Figure 1-3) – this is due to the younger age distribution of Mäori people. Rates for rheumatoid arthritis are broadly similar across ethnic groups, while "other" arthritis is higher in Mäori men but lower in Mäori women relative to non-Mäori people. This may be due in Economic Cost of Arthritis in New
part to gout, where known risk factors are ethnicity (Mäori or Pacific Islander) and male gender (Smelser, 2002, cited in Duthrie et al, 2004). FIGURE 1-3: RAW PREVALENCE RATES BY TYPE OF ARTHRITIS, NEW ZEALAND 2003
Male Non-MaoriFemale MaoriFemale Non-Maori Rheumatoid arthritis Arthritis - all forms The age distribution of arthritis in the Mäori population is quite different from that of the total population (see Figure 1-5). In the older age groups, arthritis prevalence rates in Mäori people are similar, due to the influence of osteoarthritis, while in the younger age groups, prevalence rates in Mäori people are higher, due to the influence of other types of arthritis such as gout, as noted above, where being Mäori increases risk. FIGURE 1-4: AGE-SPECIFIC PREVALENCE RATES, ALL ARTHRITIS, BY ETHNICITY, NEW
ZEALAND, 2003
Age Group
Economic Cost of Arthritis in New
Arthritis is more common in middle aged Mäori men (35 to 64 years) than Mäori women of the same age or relative to the general population of the same age. These data should be interpreted with care, however, due to the smaller number of observations. FIGURE 1-5: AGE-SPECIFIC PREVALENCE RATES, MÄORI, BY GENDER, NEW ZEALAND, 2003
Age Group
BASELINE PREVALENCE 2005 TO 2020
Prevalence rates from the 2002-03 NZHS were combined with demographic projections of New Zealand's population by age, gender and ethnicity from 2005 to 2020 (Statistics New Zealand 2003, 2004a, 2004b, 2004c) to estimate the likely prevalence of arthritis in New Zealand in 2005, 2010 and 2020. These estimates account for the ageing of the New Zealand population over the next 15 years, but do not include any interventions that may delay or reduce the onset of arthritis (eg, research breakthroughs, improvement in risk factors) nor any other factors that may increase the prevalence rates of arthritis (eg, worsening of risk factors). Obesity is an important risk factor for arthritis, and the potential impact on these baseline projections of possible changes in obesity rates is considered in more detail in Section 1.3. Baseline projections are summarised in Table 1-2 below. More detailed prevalence projections are contained in Table 1-4 (2005), Table 1-5 (2010) and Table 1-6 (2020). Economic Cost of Arthritis in New
TABLE 1-2: BASELINE PREVALENCE PROJECTIONS 2005 TO 2020
2005 2010 2020
221,283 246,917 305,277 300,686 333,831 414,019 47,951 56,798 76,182 Total non-Mäori 474,018 523,949 643,113 Total no. of persons
521,969 580,747 719,296
% of 15+ population
Source: Access Economics. Note: Totals may not sum due to rounding. In 2005, almost 522,000 New Zealanders (16.2%) over the age of 15 were living with at least one type of arthritis. Of these people around 300,700 (57.6%) were female and 221,300 (42.4%) were male. While arthritis is commonly thought of as an older person's disease, over 53.6% (279,600) of New Zealanders with arthritis in 2005 are of working age (15 to 64), as shown in Figure 1-6. FIGURE 1-6: PREVALENCE BY AGE & GENDER, NEW ZEALAND, 2005
no. persons
Age Group
An estimated 9.2% of people with arthritis are of Mäori descent although Mäori people currently form 15.1% of New Zealand's population. This anomaly is largely explained by the relatively high proportion of younger Mäori people. In fact 35% of Mäori people are aged 0-14 years, compared to 19% of non-Mäoris. When the people under 15 are excluded, the differential is much smaller – Mäori people make up 12% of the population aged 15 and over (Table 1-3). The higher prevalence of arthritis in middle-aged Mäori males means the difference between share of population and share of arthritis cases is a lot smaller in Mäori males (1 percentage point) than total male population (7 percentage points). Economic Cost of Arthritis in New
TABLE 1-3: POPULATION AND ARTHRITIS SHARES, MÄORI AND NON-MÄORI
% Population 15+
% Arthritis 15+
Difference
-1 percentage point -5 percentage points -2 percentage points 8 percentage points -7 percentage points 7 percentage points -3 percentage points 3 percentage points Source: Access Economics Due to the expected demographic ageing of the New Zealand population over the next 15 years, the number of people with arthritis will increase further, as more people move into the older age cohorts where arthritis is more prevalent. Figure 1-7 shows that by 2020 just under 719,300 New Zealanders will have arthritis. This is equivalent to 19.2% of the population - an increase of around 1.2% per annum since 2005. FIGURE 1-7: PROJECTED PREVALENCE 2005 TO 2020
no. persons
Economic Cost of Arthritis in New
TABLE 1-4: PREVALENCE BY AGE, GENDER, ETHNICITY AND TYPE OF ARTHRITIS, 2005
Prevalence 15+ (%) 8.3 10.2
Rheumatoid
arthritis
Prevalence 15+ (%) 3.1
3.2 3.9 2.5
arthritis
Prevalence 15+ (%) 2.3 1.4 3.2
2.4 1.6 3.1
Arthritis - All forms*
522.0 300.7 221.3 474.0 277.7 196.3 Prevalence 15+ (%) 16.2 18.2 14.2
16.9 19.2 14.3
* ‘Arthritis all forms' is not the sum of the parts, the difference being people who know they have arthritis but do not know the type. Economic Cost of Arthritis in New
TABLE 1-5: PREVALENCE BY AGE, GENDER, ETHNICITY AND TYPE OF ARTHRITIS, 2010
35-44 13.9 6.4 7.6 45-54 45.5 28.9 16.6 55-64 74.6 43.3 31.3 65-74 79.8 55.6 24.2 75+ 84.7 53.4 31.3 Total 300.6 189.6 111.0 282.1 179.2 102.9 Prevalence 15+ (%) 8.9 10.9 6.7
9.6 11.9 7.1
Rheumatoid arthritis
35-44 10.4 6.0 4.4 45-54 18.9 13.5 5.4 55-64 25.0 12.3 12.7 65-74 27.0 15.0 12.0 75+ 24.4 18.5 6.0 Total 110.4 70.0 40.5 Prevalence 15+ (%) 3.3 4.0 2.4
3.4 4.1 2.6
Other arthritis
35-44 10.8 3.8 7.0 55-64 17.1 8.2 8.9 Total 82.2 26.1 56.1 Prevalence 15+ (%) 2.4 1.5 3.4
2.5 1.7 3.3
Arthritis - All forms
15-24 13.0 6.3 6.7 25-34 18.1 9.8 8.3 35-44 44.1 22.3 21.9 45-54 95.0 52.2 42.8 55-64 136.3 76.1 60.2 65-74 140.2 83.3 56.9 75+ 134.1 84.0 50.1 Total 580.7 333.8 246.9 523.9 306.4 217.5 Prevalence 15+ (%) 17.1 19.2 14.9
17.8 20.3 15.1
* ‘Arthritis all forms' is not the sum of the parts, the difference being people who know they have arthritis but do not know the type. Economic Cost of Arthritis in New
TABLE 1-6: PREVALENCE BY AGE, GENDER, ETHNICITY AND TYPE OF ARTHRITIS, 2020
45-54 46.8 30.1 16.7 55-64 94.0 55.1 38.9 Total 381.4 240.7 140.7 355.8 226.0 129.8 Prevalence 15+ (%) 10.2 12.6 7.7
11.0 13.7 8.2
Rheumatoid arthritis
35-44 9.5 5.4 4.1 45-54 19.5 14.1 5.5 55-64 31.4 15.6 15.8 65-74 38.5 21.4 17.2 75+ 32.0 23.8 8.3 Prevalence 15+ (%) 3.6 4.5 2.8
3.7 4.5 3.0
Other arthritis
35-44 9.9 3.4 6.5 55-64 21.5 10.4 11.1 65-74 30.7 7.2 23.5 75+ 18.7 7.2 11.5 Prevalence 15+ (%) 2.7 1.7 3.7
2.7 1.9 3.6
Arthritis - All forms
35-44 40.2 19.8 20.4 45-54 97.4 54.3 43.2 65-74 199.8 118.2 81.5 75+ 177.4 108.1 69.2 Total 719.3 414.0 305.3 643.1 376.0 267.2 Prevalence 15+ (%) 19.2 21.7 16.7
20.0 22.8 17.0
* ‘Arthritis all forms' is not the sum of the parts, the difference being people who know they have arthritis but do not know the type. Economic Cost of Arthritis in New
1.3 OBESITY
SCENARIOS
The baseline prevalence projections estimate the number of New Zealanders with arthritis in the future, assuming that prevalence rates remain constant for each age-gender cohort. While these projections account for expected demographic ageing of the New Zealand population, they do not take into account the effect of any intervention that may delay or reduce the incidence of arthritis. Possible increases in future prevalence rates due to an increased presence of known risk factors are also not taken into account. One known risk factor is obesity. Like many developed countries, the average body mass index (BMI) of the New Zealand population has grown in recent decades, together with the proportion of the population classified as overweight or obese. In December 2004, the Ministry of Health (2004b) released a detailed analysis of obesity trends in New Zealand from 1977 to 2003. This analysis was based on results from four nationally representative health or nutrition surveys undertaken in 1977, 1989, 1997 and 2003. Figure 1-8 shows that the percentage of the population classified as obese has risen from each survey to the next. In 1977 around 9.4% of men and 10.8% of women were obese, but this had doubled to 19.9% of men and 22.1% of women in 2003. This is equivalent to an average annual percentage change (or growth rate) of just under 3%. (Note this is equivalent to the share of the population with obesity increasing by 0.4 percentage points each year.) FIGURE 1-8: OBESITY PREVALENCE BY GENDER, 1977 TO 2003
Source: Ministry of Health (2004b) However, the rate of growth in obesity has not in fact been constant over the last two decades. Analysis of each survey interval shows that average growth rates have varied considerably (see Figure 1-9). The growth in obesity rates was quite small during the 1980s, only around one per cent per annum. However during the 1990s this increased to over five per cent, before falling back somewhat between 1997 and 2003. This decrease has been much more marked for females than males. Economic Cost of Arthritis in New
FIGURE 1-9: AVERAGE ANNUAL GROWTH IN OBESITY RATES, 1977 TO 2003
Source: Ministry of Health (2004b) This figure may suggest that recent public health interventions designed to educate New Zealanders about the risks of obesity and the need for a healthy diet are having some success. However, it is also possible that the differences in average growth rates of obesity are influenced substantially by variations in survey design. Moreover, past growth rates may not be a reliable predictor of likely future trends in obesity among New Zealanders. To account for this uncertainty, Access Economics has modelled a number of possible scenarios which present the range of possible outcomes depending on the success of public health interventions. These are: 1 Base case: obesity remains stable at current levels (around 20% of the
population) into the future;
Continued increase in obesity: Obesity continues to grow at an average rate of
around 3% per annum (or around ¾ of a percentage point of the population each
year – higher than the 0.4% historically since the base is now higher), so that
around 31% of men and 33% of women are obese in 2020; and
Eradication of obesity by 2020: Obesity is eradicated by 2020, with obesity
falling as a percentage of the population by 1.3% for females and 1.5% for males
until then. While this scenario is unlikely, it does provide a useful lower bound.
Assumptions need to be made about the precise quantitative link between increased obesity and increased age-prevalence of arthritis. Examples from the literature include the following. The odds ratio of osteoarthritis associated with obesity is in the range of 2 to 4 depending on the site of arthritis. The population-attributable risk suggests that up to 24% of knee arthritis could be attributed to obesity (Vermont Department of Health, 1999), for example. An Oregon study found that 27% of adults with arthritis are obese whereas among adults without arthritis, only 18% are obese (Oregon Department of Human Services, 2004). A South Australian study (Gill et al, 2003) also found significant differences between arthritis prevalence in obese and non-obese populations, utilising annual data from the Health Omnibus Study, 1991-1998, 2001. The results are Economic Cost of Arthritis in New
shown in Figure 1-10 below; in 2001 the difference was around 12 percentage points. FIGURE 1-10: OBESITY AND ARTHRITIS PREVALENCE, SOUTH AUSTRALIA
ritis ( 30
Source: Gill et al (2003). These source studies suggest that the odds ratio of total arthritis associated with obesity is around 3. This allows us to solve simultaneously for q1 and q2: q .s + q .s = p 1 ( − q1 ) q1 = probability of having arthritis given obesity q2 = probability of having arthritis given no obesity s1 = share of people with obesity = probability of obesity in 2002-03 NZHS = 19.9% for men and 22.1% for women s2 = share of people without obesity = probability of no obesity in 2002-03 NZHS = 80.1% for men and 77.9% for women p1 = probability of having arthritis in 2002-03 NZHS = 13.9% for men and 17.3% for women3 OR = odds ratio = 3.0 At these prevalence rates, solving for q1 and q2 reveal there is a 32.8% (women) and 27.0% (men) chance of having arthritis if a person is obese, compared to a 14.0% (women) and 11.0% (men) chance of having arthritis if a person is not obese. Using equation 3 below, this implies that 18.1% of arthritis in males and 17.8% of arthritis in 3 The raw prevalence rate is lower in 2002-03 than 2005 due to intervening demographic ageing. It is important, however, to match prevalence data with the same year as the obesity data. Economic Cost of Arthritis in New
females is attributable to obesity. These percentages are known as the "attributable fraction" for males and females – ie, the proportion of arthritis due to obesity. q .s Table 1-7 below shows the impact of changing obesity rates on arthritis prevalence, based on the attributable fractions calculated above. If obesity continues to increase at the rate observed over the past few decades (scenario 2) then around 60,300 more people will have arthritis in 2020, compared with the base case where obesity stabilises at current levels. Alternatively, if obesity could be completely eliminated by 2020, there would be almost 134,400 fewer New Zealanders with arthritis than that expected on current estimates. TABLE 1-7: IMPACT OF CHANGING OBESITY RATES ON ARTHRITIS PREVALENCE
Scenario % obese 2005
% obese 2020
Persons (‘000)
arthritis
with arthritis
prevalence
prevalence
19.9 22.1 19.9 22.1 0.0 0.0 0.0 298.7 414.0 19.9 22.1 30.7 33.4 54.2 51.1 9.8 9.1 328.0 451.7 19.9 22.1 0.0 0.1 -100.0 -100.0 -18.1 -17.8 244.6 340.3 The impact of the different scenarios on the prevalence of arthritis (expressed as a percentage of the New Zealand population aged 15 and over) is shown in Figure 1-11. FIGURE 1-11: ARTHRITIS PREVALENCE 2005 TO 2020 UNDER OBESITY SCENARIOS
Increasing obesity ith
w
n
o
ti 18%
% popu 17%
Economic Cost of Arthritis in New
Allowing for other factors
Known risk factors for arthritis include age, female gender, lower education and income, physical inactivity, overweight and obesity; other possible risk factors, such as smoking and being divorced, are less well established (Fontaine, 2002). There are also other and sometimes contradictory risk factors for different types of arthritis – for example, rheumatoid arthritis may be associated with being underweight, rather than overweight (Access Economics, 2001). Possibly related is the reduction in overall prevalence of RA reported in Duthie et al (2004) citing Silman (2002), Doran et al (2002) and Collings and Highton (2002). The decline in the incidence of RA over the past 40 years may also be suggestive of a change in exposure to an environmental factor contributing to the aetiology of RA. Duthie et al (2004) also note evidence for increasing prevalence of gout in New Zealand, which could, at least in part, be explained by demographic ageing and an increase in being overweight. Gout was significantly more common in Mäori (6.4%) than Europeans (2.9%) and in Mäori men (13.9%) than in European men (5.8%). Comparison with previous studies shows that the prevalence of gout has increased in both Mäori and Europeans, particularly in men. In Mäori men the prevalence of gout has risen from 4.5-10.4% previously to 13.9%, and in European men from 0.7%-2.0% previously to 5.8%. Clinical differences included a stronger family history, earlier age at onset, and a higher frequency of tophi and polyarticular gout in Mäori than Europeans. Treatment of gout was inadequate in most cases. Of concern is that the prevalence of gout appears to be on the increase, not only in Mäori but also in Europeans in New Zealand (Klemp et al, 1997). Higher education and income over time may act to reduce age-specific prevalence rates to some extent. However, other factors over the longer term are less amenable to projection. For example, new research discoveries may reduce age-specific incidence rates or delay the onset of arthritis while changes in technology (eg, pharmacological, surgical) may improve treatments and ameliorate symptoms or even ‘cure' arthritis. While these possibilities are noted, the high levels of variability surrounding them precludes their impacts from being estimated. Economic Cost of Arthritis in New
2. HEALTH SECTOR COSTS
There are two main methods for estimating direct health system costs. ‘Top-down' disease cost data can be derived from central data collection agencies. ‘Bottom-up' cost estimates use surveys, diaries and other cross-sectional or data-gathering tools to accumulate information from either a single study or multiple sources. The advantage of the top-down methodology is that cost estimates for various diseases will be consistent, enhancing comparisons and ensuring that the sum of the parts (health system costs of each disease) does not exceed the whole (total expenditures on health care in New Zealand). The advantage of the bottom-up methodology is that it can provide greater detail in relation to specific cost elements and the same study can be extended to capture information about indirect cost elements as well as direct cost elements. In this study, Access Economics has been limited by the lack of comprehensive data of either type in New Zealand. In New Zealand there is not the extensive collection of top-down disease cost data that is compiled, for example, in Australia by the Australian Institute of Health and Welfare (AIHW) from services utilisation and public and private expenditure such as hospital morbidity data, case mix data, Bettering the Evaluation and Care of Health data, the Australian National Health Survey and other sources (AIHW, 2005). It was not possible to source an existing comprehensive bottom-up study of cost elements of arthritis in New Zealand, although a variety of different sources exist in relation to certain elements. Access Economics has therefore utilised a process of data-gathering supplemented by targeted surveying for specific cost items. In the following sections, the sources and methodology in relation to measurement of each cost element are described in detail. 2.1 HOSPITAL
In New Zealand, only public inpatient data are collected by the New Zealand Health Information Service (NZHIS). Access Economics has thus used a four-step process to estimate total hospital costs. Through a consultation process with specialist experts, conditions deemed to be arthritis were identified by category from the International Classification of Disease Tenth Revision (ICD-10) codes. Public inpatient data were requested from NZHIS for these codes for the most recent year available (2003-04), with costs thus estimated and extrapolated to 2005 based on population growth and health inflation. Private inpatient costs were estimated based on the ratio of private to public joint replacement surgeries measured by the National Joint Registry. Outpatient costs were estimated based on survey data cross-checked against relativities from the Australian ratio of outpatient to inpatient costs. Economic Cost of Arthritis in New
ICD-10 CODES FOR ARTHRITIS AND NZHIS DATA
Osteoarthritis is the most common of over 100 known forms of arthritis (see prevalence estimates in Chapter 1), while rheumatoid arthritis, systemic lupus erythematosus (SLE) and gout are also very common. Other forms include fibromyalgia, juvenile arthritis, ankylosing spondylitis, spondyloarthritis, psoriatic arthritis, scleroderma, bursitis, tendonitis, carpel tunnel syndrome, polymyalgia rheumatica, and dermatomyositis (Access Economics, 2005). In consultation with a group of three specialist expert rheumatologists (two from New Zealand and one from Australia) and the New Zealand Health Information Service (NZHIS), a list of conditions deemed to be arthritis were identified by category from the International Classification of Disease Tenth Revision (ICD-10) codes. In some cases, proportions of each category were allocated as arthritic, in accordance with the clinical experience of the experts. These codes were then allocated as either ‘osteoarthritis', ‘rheumatoid arthritis' or ‘other arthritis'. The agreed categorisation is presented in Table 2-1. Access Economics notes that it would be desirable for a widely agreed list of ICD-10 arthritic conditions to be endorsed at international level, for which the list agreed in this study might provide a useful starting point. Public inpatient data were purchased from the NZHIS, which provided details of 25,591 admissions where the agreed arthritic codes were one of 20 diagnoses for admission. To avoid overstating or double counting of arthritic conditions, only the primary diagnosis was used in the costing (11,827 admissions). Access Economics notes that these data are rich in the ability to identify co-morbid conditions. Data were used where the discharge date was from 1 July 2003 to 30 June 2004, and Access Economics limited the length of stay to 365 days in order to accurately achieve an annual cost estimate. This entailed scaling down the large raw data cost-weights for six admissions by the extent they were over 365 days. Average length of stay was 5.2 days after scaling down (5.6 days without). Other information in the data included patient age, gender, ethnicity, cost-weight and facility type4, among other variables. Data were provided by year of age, which Access Economics grouped as 0-14, 15-24, 25-34, 35-44, 45-54, 55-64, 65-74, 75-84 and 85+. Ethnicity was grouped into Mäori (comprising New Zealand Mäori and Cook Islands Mäori, categories 21 and 32) and non-Mäori (all other categories). The cost-weight for each stay is calculated via a complex algorithm which takes account of length of stay as well as other issues related to cost complexity of admissions (District Health Boards of New Zealand, 2003). The cost-weight multiplier converts the cost-weight to a dollar amount; in 2003-04 the multiplier was $2,728.55 for medical/surgical inpatients. 4 While most public inpatient services are provided in public hospitals, some are provided in private hospitals and a very few in facilities classified as health centres. Economic Cost of Arthritis in New
TABLE 2-1: CLASSIFICATION OF ARTHRITIS, ICD-10 CODES
ICD-10 Descriptor
Rheumatoid
Arthritic
arthritis
arthritis
arthritis
Pyogenic arthritis Direct infections of joint in infectious and parasitic diseases classified elsewhere Reactive arthropathies Postinfective and reactive arthropathies in diseases classified elsewhere Seropositive rheumatoid arthritis Other rheumatoid arthritis Psoriatic and enteropathic arthropathies Juvenile arthritis Juvenile arthritis in diseases classified elsewhere Other crystal arthropathies Other specific arthropathies Arthropathies in other diseases classified elsewhere Coxarthrosis [arthrosis of hip] Gonarthrosis [arthrosis of knee] Arthrosis of first carpometacarpal joint Polyarteritis nodosa and related conditions Other necrotizing vasculopathies Systemic lupus erythematosus Systemic sclerosis M35.0 Sicca syndrome [Sjögren] M35.1 Other overlap syndromes M35.3 Polymyalgia rheumatica Ankylosing spondylitis Other inflammatory spondylopathies M48.0 Spinal stenosis M48.1 Ankylosing hyperostosis [Forestier] Spondylopathies in diseases classified elsewhere Synovitis and tenosynovitis Disorders of synovium and tendon in diseases classified elsewhere M70.0 Crepitant synovitis (acute) (chronic) of hand and wrist M71.2 Synovial cyst of popliteal space [Baker] M75.0 Adhesive capsulitis of shoulder Enthesopathies, lower limb, excluding foot M77.2 Periarthritis of wrist M77.3 Calcaneal spur M77.5 Other enthesopathy of foot M77.8 Other enthesopathies, not elsewhere classified M77.9 Enthesopathy, unspecified Source: New Zealand Health Information Service and specialist expert consultation. Economic Cost of Arthritis in New
PUBLIC INPATIENT COSTS
Table 2-2 summarises the results from the NZHIS public inpatient data. TABLE 2-2: ARTHRITIS PUBLIC INPATIENT COSTS BY ICD-10 CODE, 2003-04
ICD-10 Descriptor
Coxarthrosis [arthrosis of hip] Gonarthrosis [arthrosis of knee] Pyogenic arthritis5 Spinal stenosis6 Other rheumatoid arthritis Synovitis and tenosynovitis Other inflammatory spondylopathies Seropositive rheumatoid arthritis Polymyalgia rheumatica Other necrotizing vasculopathies Juvenile arthritis Ankylosing spondylitis Other crystal arthropathies Systemic lupus erythematosus Enthesopathies, lower limb, excluding foot Synovial cyst of popliteal space [Baker] Arthrosis of first carpometacarpal joint Adhesive capsulitis of shoulder Other specific arthropathies Crepitant synovitis (acute) (chronic) of hand Polyarteritis nodosa and related conditions Enthesopathy, unspecified Reactive arthropathies Other enthesopathy of foot Systemic sclerosis Sicca syndrome [Sjögren] Ankylosing hyperostosis [Forestier] Other enthesopathies, not elsewhere classified Source: New Zealand Health Information Service special data purchase. 5 Pyogenic arthritis, also known as infectious or septic arthritis, is a serious infection of the joints characterized by pain, fever, chills, inflammation and swelling in one or more joints, and loss of function in those joints. It is considered a medical emergency because of the damage it causes to bone as well as cartilage, and its potential for creating septic shock, which is a potentially fatal condition. 6 Spinal stenosis is mostly a complication of degenerative arthritis, with narrowing of spaces in the spine (backbone) that results in pressure on the spinal cord and/or nerve roots. Pressure on the lower part of the spinal cord or on nerve roots branching out from that area may give rise to pain or numbness in the legs. Pressure on the upper part of the spinal cord (that is, the neck area) may produce similar symptoms in the shoulders, or sometimes the legs. Economic Cost of Arthritis in New
Total public inpatient costs for arthritis in 2003-04 were $73.24m.
Osteoarthritis was responsible for 79.3% of public inpatient costs, rheumatoid arthritis for 4.6% and other arthritis for 16.2% of costs. Osteoarthritis of the hip and knee alone accounted for over 70% of costs. To extrapolate the $73.24m estimate to 2005, it is multiplied by two factors, totalling 8.2% over the 1½ years. Health cost inflation, estimated at 2.9% per annum between 2003-04 financial year and calendar year 20057; and Growth in prevalence of arthritis of 3.7% between 2003-04 and 2005 (based on
prevalence rates by age, gender and ethnicity multiplied by the average of the
2003 and 2004 official population estimates for these sub-populations).
The implicit assumption over the reasonably short period is that services expanded in line with prevalence rather than waiting lists lengthening. Public inpatient costs are thus estimated to be $79.8m in 2005. Figure 2-1 depicts the
shares by major types of arthritis.
FIGURE 2-1: PUBLIC INPATIENT COSTS BY TYPE OF ARTHRITIS, 2005
OA of knee
Synovitis &
Source: Access Economics based on NZHIS data. 7 Health cost inflation data were not provided by NZHIS. Average health cost inflation of 2.9% per annum was thus based on Access Economics (2005) and OECD (2004). Economic Cost of Arthritis in New
FIGURE 2-2: ARTHRITIS PUBLIC INPATIENT COSTS BY AGE AND GENDER, $M, 2005
0-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 Figure 2-2 and Table 2-3 present public inpatient data by age and gender for 2005. 53.5% of inpatient costs are for women and 46.5% for men. Over a third of inpatient costs (34.5%) are for people aged over 75 years and nearly another third (31.4%) are for those aged 65-74 years. TABLE 2-3: ARTHRITIS PUBLIC INPATIENT COSTS BY AGE AND GENDER, $M, 2005
% of total
Age group
Total 42.91
Table 2-4 presents the public inpatient data by ethnicity and facility. 9.3% of total inpatient costs were for Mäori people and 90.7% for non-Mäori people (recalling overall prevalence or arthritis for Mäori people was 9.2% of total arthritis prevalence). 93.3% of public inpatient services were performed in public hospitals and 6.7% in private hospitals. The relative shares in public and private hospitals were not significantly different between Mäori and non-Mäori people. Economic Cost of Arthritis in New
TABLE 2-4: PUBLIC INPATIENT COSTS BY ETHNICITY AND FACILITY, $M, 2005
Facility
Non-Mäori
Public hospital ($m) Private hospital ($m) Source: NZHIS data. The proportion of inpatients in health centre was negligible. PRIVATE INPATIENT COSTS
The National Joint Registry (also known as the New Zealand Joint Replacement Register) is operated by the New Zealand Orthopaedic Association and is based at Christchurch Hospital. Professor Alastair Rothwell is the Register Supervisor. The National Joint Register has expanded considerably since its establishment in 1998 by the New Zealand Orthopaedic Association, so that broad coverage of technical information about joint surgeries (hip, knee, shoulder, elbow and ankle) is now recorded. For the 12 month period November 2003 to October 2004 (the most recent available),
there were 11,859 joint replacements performed in New Zealand. This figure includes
primary and revision hips, knees (including uni-compartmental knees), ankles,
shoulders, elbows and lumbar disc replacements. 6,502 (54.8%) were performed in
public hospitals and 5,357 (45.2%) in private hospitals. The ratio of private to
public joint replacements is used in order to derive the ratio of private to public inpatient
costs for New Zealand.
To cross-check the reliability of these proportions, they are compared with the number of public and private hospital beds available in New Zealand. In 2002 (the most recent year for which data are available), NZHIS data show there were 12,484 public hospital beds (52.4%) and 11,341 private beds (47.6%) of the total 23,825 beds that were not in ‘old peoples homes'. The proportions from the Joint Registry thus seem reliable in order to estimate private inpatient costs. The estimate of private inpatient costs for 2005 is thus $65.8m, with the same age,
gender ethnicity and type of arthritis splits estimated as for public inpatient costs.
Total inpatient costs (public and private) are $145.6m.
To provide triangulation for reality checking, the inpatient data per person is compared to similar data for Australia from Access Economics (2005) in Table 2-5. In 2004, inpatient costs in Australia were estimated as A$932.4m which, across the 3.37m Australians with arthritis, results in an estimated A$277 inpatient cost per person with arthritis. Converting to 2005 NZ dollars using Australian health cost inflation, demographic growth and purchasing power parity of NZ$1.071=A$1 (OECD, 2005) this is equivalent to NZ$313 per person with arthritis in 2005. The New Zealand estimate of inpatient costs per person with arthritis of NZ$279 per person in 2005 is about 89% of the Australian estimate. This fits well with data that suggest that average hospital inpatient stays in New Zealand are shorter than in Australia. For example, OECD data for the most recent 2-year Economic Cost of Arthritis in New
comparative period available (OECD, 2004) show the average length of stay in New Zealand is 85% of that in Australia. The estimate of inpatient cost of arthritis in New Zealand of $145.6m in 2005 thus appears robust. TABLE 2-5: TRIANGULATION OF INPATIENT DATA
Prevalence (people) Cost/person NZ$
Australia
Inpatient costs A$m Prevalence (people) Cost/person NZ$
Source: Access Economics. OUTPATIENT COSTS
The fourth and final step in estimating hospital costs is estimating outpatient costs, where a combination of survey and triangulated top-down data has been used. Survey data for outpatients were sought by contacting all the District Health Boards with a brief questionnaire (see Appendix D). The DHBs were asked what outpatient services they provided and, for specialist and allied health services, they were asked how many hours of services were provided to people with arthritis who were not inpatients, for their arthritis, and the average cost of these services. A problem encountered and expressed by DHBs was that they do not code by disease within non-admitted patient systems so have no way of separating patients with arthritis from those without, while noting that patients with arthritis access their services, particularly in relation to follow-up from joint replacement surgery. As such only one DHB was able to respond with data estimates, inadequate for statistical use but the return is summarised below for interest. Specialist medical services, physiotherapy and occupational therapy services are provided as outpatient services for people with arthritis in 2005 through the DHB. For specialist services, 750 outpatient hours are estimated to be provided to treat arthritis at an average cost of $245 per hour. For allied health services, 1,250 physiotherapy hours and 600 occupational therapy hours are provided at an average cost of $60 per hour. The share of beds in this DHB outpatient facility is 0.7% of the total number of beds in New Zealand, with the total estimated as 49,214 beds for 2005 based on modest actual average annual growth rate of 0.5% over the period 1993-2002 projected to 2003-2005. A ballpark estimate from these data would imply $25.8m for outpatient specialist
services across New Zealand and $15.6m for outpatient allied health services -
$41.4m in all.
Economic Cost of Arthritis in New
It is recommended that DHBs record outpatient services (patient hours and
average costs) are provided by broad disease group, so that the cost-
effectiveness of interventions can be compared.
Greater confidence in an outpatient cost estimate was thus deemed to be derived by
using the ratio of outpatient to inpatient costs from AIHW data, since clinical practice at
the tertiary care level is quite similar in New Zealand and Australia. In Australia
outpatient costs are quite robustly estimated as 32.0% of inpatient costs (Access
Economics, 2005). Outpatient costs measured through proportionality are estimated
as $46.5m in 2005. The average of this and the ballpark estimate above is taken as
the estimate of outpatient costs in New Zealand $44.0m.
Altogether hospital costs for arthritis are thus estimated as $189.6m.
FIGURE 2-3: HOSPITAL COSTS ARTHRITIS, NZ, 2005
$65.8m 35%
$44.0m 23%
GENERAL PRACTICE COSTS
GP SERVICES ATTRIBUTABLE TO ARTHRITIS
Data were purchased from the Royal New Zealand College of General Practitioners Research Unit, based at the Department of General Practice, University of Otago, to estimate the number of GP consultations for people with arthritis, as well as medications prescribed and referrals, for the most recent year available (2003). A total of 323,975 consultations (N) with coded diagnoses (read codes) were recorded for all patients in the database in 2003. These consultations represented 131,343 different individuals (58,455 males, 72,842 females and 46 with gender not recorded). Of the total coded consultations, 8,551 (2.64%) were identified that included at least one Arthritis read code during 2003 (n). This represented 5,047 different individuals (1,851 males and 3,196 females). A matrix of managed conditions in addition to arthritis is presented in Table 2-6. 36% were for arthritis only, while 25.7% were for arthritis and one other condition, 16.6% were for arthritis and two other conditions, and 21.7% were for arthritis and three or more other conditions. Economic Cost of Arthritis in New
The 3,076 ‘arthritis only' consultations represented 2,335 individuals (865 males and 1,470 females). 5,113 or 59.8% of the 8,551 consultations are estimated to be attributable to
arthritis (3,076+2,199/2+1,422/3+1,854/4) – thus 1.58% (5,113/323,975) of all GP
consultations in New Zealand are attributable to arthritis (the ‘attributable
fraction').
TABLE 2-6: CONSULTATIONS FOR ARTHRITIS, BY OTHER PROBLEMS MANAGED, 2003
Consultations Number
(a) Arthritis only consultation (b) Arthritis + 1 additional read code (c) Arthritis + 2 additional read codes (d) Arthritis + 3 or more additional read codes (b) + (c) + (d) No. of Arthritis consults with additional read codes (a) + (b) + (c) + (d) Total No. of Arthritis consults (n) Source: RNZCGPRU. Thus RNZCGPRU data provides surprisingly low estimates relative to similar Australian
data from Bettering the Evaluation and Care of Health (BEACH), which are nearly four
times higher – suggesting 5% of GP visits are due to arthritis. As such, because of
coding inconsistencies related to the RNZCGPRU data8 and the relatively small sample
size (less than 2%), Access Economics has adopted an average of the two as the
estimate of the attributable fraction – 3.7%.
The NZHS also found that the mean number of GP visits per annum was 4.0 (95% confidence interval 3.8–4.1) and 8 out of 10 people had visited a GP in the past year. This suggests, based on expected 2005 population data, that overall there will be 16,383,920 GP visits in New Zealand in 2005. Access Economics notes that this is a much lower rate of visiting GPs overall than in Australia, where average visits per annum per capita exceed 5, although this may relate to relatively tighter funding (Malcolm, 2004). On the basis of the NZHS data, 608,260 GP visits in 2005 in New Zealand are
estimated as attributable to arthritis.
The New Zealand Health Survey (NZHS) contains data on General Practitioner costs, noting: Overall, the most common charge for the last GP visit was in the range $31 to $40. One in 10 adults (9.3%; with a 95% confidence interval of 8.3% to 10.3%) was not charged for their last GP visit, while one in 20 adults (5.0%; with a 95% confidence interval of 4.4% to 5.7%) was charged more than $50. 8 The RNZCGPRU database is comprised of raw data as entered at the time of encounter and thus is subject to error due to incomplete field entries by the provider, as they are not required to code and do it of their own accord. RNZCGPRU note that the discrepancy is likely to relate to doctors not consistently coding all managed problems as well as omitting codes for most (80%) of consultations. Economic Cost of Arthritis in New
These distributional data were used to identify the mean cost of a GP consultation in 2003 as $27.87 inflated to 2005 using the average health cost inflator to give $29.93 per consultation (Figure 2-4). FIGURE 2-4: COST OF LAST VISIT TO GENERAL PRACTITIONER, BY GENDER
Source Ministry of Health (2004a). Aged 15 and over. Age-standardised. Thus the 608,260 visits for arthritis at $29.93 per visits implies total arthritis-related
GP costs in 2005 are $18.2m.
This is considerably lower than would be expected from Australian data (NZ$40.1m), but is explainable in relation to: lower unit costs for GP visits in NZ; fewer visits per person overall in NZ; a lower apparent attributable proportion of GP visits in NZ to arthritis relative to other conditions. That said, the estimate of GP costs it is likely to be conservative, given the small
sample size in the RNZCGPRU data.
2.3 PHARMACEUTICAL
Pharmaceutical costs are estimated by: utilising price and quantity data purchased from IMS Health to estimate total costs for prescribed and over-the-counter drugs for arthritis; and dosages of different types of pharmaceuticals prescribed using the RNZCGPRU data are also presented for comparison. Economic Cost of Arthritis in New
IMS Health is a global company specialising in pharmaceutical market information. In order to analyse data regarding pharmaceutical expenditures, IMS has an international panel of experts (pharmacologists, medical specialists and others) that assess the classification of every drug or compound legally available and assign it an anatomical classification. In this case the M1 market data were used – M for musculoskeletal, M1A being non-steroidal anti-inflammatory drugs (NSAIDs) and the remainder of M1 being other anti-rheumatic drugs including leflunomide, TNF-inhibitors and methotrexate. There are three subsets within the M1A classification – non-steroidal plain, non steroidal combination and Cyclo-oxygenase-2 (COX-2) inhibitors. Arthritis patients have also benefited from new PHARMAC spending in recent years. The range of subsidised products has been expanding, with new investments such as leflunomide (Arava), funded since May 2002 and now accounting for some $2.6 million of the pharmaceutical budget (McNee, 2005). Etanercept was first funded in New Zealand in 2004 for children with juvenile chronic (rheumatoid) arthritis. The access criteria specify that patients need to be under 18 when they first apply for the drug however access does not halt when patients reach 18 if JCA progresses to rheumatoid arthritis. Humira (adalibumab) and Remicade (infliximab) are other TNF inhibitors. By selecting the M1 national New Zealand market, the analysis includes all relevant drugs marketed and classified under these categories, although some may be used for purposes other than their arthritis indication. Conversely, some drugs outside the musculoskeletal indication may be used by people with arthritis that are not included in the IMS data (eg, paracetamol). Moreover, the disaggregated data from IMS are limited to retail sales and do not capture direct merchandising (for example, if a manufacturer sold direct to a supermarket chain). Direct hospital sales are also not captured, although these were relatively small (IMS advise around 2.5% of totals in New Zealand). In an attempt to overcome these data weaknesses, a comparison of a similar data estimate for Australia was provided by IMS and compared with the robust estimate of pharmaceutical expenditure for 2004 provided in Access Economics (2005), with the IMS database found to capture 56.6% of the total. The estimates from the IMS retail sales search are presented in Table 2-7 and Table 2-8 below, segmented into pharmaceuticals available only by prescription in New Zealand and those available over the counter. Total retail sales were estimated to be $22.9m for arthritis pharmaceuticals in the
year to March 2005.
$21.5m was spent on prescription drugs, of which Celebrex and Vioxx
together represented 38.9% (capturing the withdrawal of Vioxx during the period).
$1.4m was spent on over-the-counter pharmaceuticals, of which Voltaren
represented 89.4%
Economic Cost of Arthritis in New
TABLE 2-7: M1 PRESCRIPTION DRUGS: PRICE, QUANTITY & VALUE, YR TO MAR '05
Average Price $ Total value $ % share
ANTIRHEUMATIC SYSTEM-M01 902,662 Source: IMS Health. TABLE 2-8: M1 OVER-THE-COUNTER DRUGS: PRICE, QUANTITY & VALUE, YR TO MAR '05
Average Price $ Total value $ % share
ANTIRHEUMATIC SYSTEM-M01 228,368 BIOZONE JOINT EASE Source: IMS Health. Factoring up these retail-only sales by 100/56.6% provides an estimate for total
pharmaceutical expenditure on arthritis for 2005 of $40.5m.
Economic Cost of Arthritis in New
Again this is considerably lower than expected, about half the per capita expenditure in Australia, while noting that: Australia has experienced rapid pharmaceutical growth in recent years and, in particular, considerable ‘leakage' in expenditure on Celebrex and Vioxx in 2000-01, the year on which the Australian data are based and before the withdrawal of Vioxx, which may drive a wedge between Australian and New Zealand expenditure. New Zealand differs from many countries in the way it funds and manages spending on prescription medicines, by defining an annual pharmaceutical budget and establishing an agency to manage spending within it. This was in response to the high and rapidly rising costs of medicines through the 1980s and early 1990s, and the result has been that overall pharmaceutical spending is relatively lower than elsewhere (McNee, 2005). The effects of etanercept listing do not seem to have worked through fully in New Zealand yet, and this element may grow in the near future. As with the estimate of GP costs, the pharmaceutical cost estimate should be
considered as a conservative lower bound.
RNZCGPRU DATA
Of the 3,076 consultations where arthritis was the only managed condition, 1,843
(59.9%) resulted in prescriptions obtained on the same date for 1,514 different
individuals. A total of 265 different drug types were prescribed for these consultations.
The total number of individual drug prescriptions was 4,093 (a ratio of 1.33 per arthritis
consultation). Extrapolating this to the whole New Zealand population suggests over
800,000 scripts with an average price per script of $23.81 (from the IMS data) - $19.3m
in total for prescription drugs – similar to the IMS estimate of $21.5m for this element.
Table 2-9 shows the 20 drugs most frequently prescribed in arthritis-related consultations with calculated average daily dose, relative to the same drugs prescribed to the total population (N). Appendix C (Table C-1) gives the number of prescriptions and average daily doses for all 265 drugs. Note that some doses could not be calculated due to lack of data from prescribers, some drugs are prescribed at less than the rates in the general population and, particularly for the latter category, some of the drugs prescribed appear to be for non-arthritic conditions. All the top 20 drugs are associated with arthritis treatment to varying degrees, noting that they are classified by active ingredients rather than brand name. Diclofenac sodium – is the generic name of Voltaren, Apo-Diclofenac, Apo-Diclo, Diclax, Flameril, Anfenax and other NSAIDs with that active ingredient. Dextropropoxyphene - is an analgesic in the opioid category that is used to treat severe pain in rheumatoid arthritis Naproxen – is the generic name of Naprosyn and Synflex (also available over-the-counter as Naprogesic and Sonaflam) and other NSAIDs with that active ingredient. Rofecoxib – Vioxx. Celecoxib – Celebrex. Economic Cost of Arthritis in New
Methotrexate – is an antimetabolite drug used to treat rheumatoid arthritis (Rheumatrex, Trexall). Triamcinolone acetonide is a synthetic corticosteroid - corticosteroids decrease inflammation and thus help control a wide number of disease states, including allergic reactions, inflammation of the lungs in asthma and inflammation of the joints in arthritis. Ibuprofen (prescription brand names I-Profen and Brufen, also available over-the-counter as Nurofen, Act-3 and Panafen) is another NSAID for arthritic pain and inflammation. TABLE 2-9: TOP 20 DRUGS PRESCRIBED, ARTHRITIS RELATIVE TO TOTAL, 2003
Average daily dose
Difference
Drug name
in share Arthritis (N-n) %
Arthritis (N-n)
diclofenac sodium Dextropropoxyphene with Paracetamol Methotrexate 1.84 Acetonide Ibuprofen 1.64 Paracetamol 1.47 Calcium Carbonate Amitriptyline 0.89 Paracetamol with 1.83 0.99 3723mg + 60mg Sulphasalazine 0.63 Source: RNZCGPRU. PATHOLOGY AND DIAGNOSTIC IMAGING COSTS
PATHOLOGY
The RNZCGPRU data provided pathology referrals by type for the arthritis-related consultations and also for these same referrals in the general 2003 patient population. Of the 3,076 consultations where arthritis was the only managed condition, 414
(13.5%) resulted in a referral for laboratory tests on the same date. This represented a
total of 379 different individuals. A total of 8,616 laboratory tests were undertaken for
these consultations, representing 132 different types of laboratory test and in a ratio of
2.8 tests per arthritis consultation.
Economic Cost of Arthritis in New
Table 2-10 shows the top 20 laboratory referrals (40% of all referrals) for the arthritis patients relative to the general population. Appendix C (Table C-2) gives results for all 132 different laboratory tests for which the arthritis patients were referred. TABLE 2-10: TOP 20 LABORATORY REFERRALS, ARTHRITIS RELATIVE TO TOTAL, 2003
Lab test type
% Difference in share Arthritis (N-n) % Arthritis % Total (N-n)
Glycosylated haemoglobin Eosinophil antibodies Erythrocyte sedimentation rate Rheumatoid Factor Aspartate Aminotransferase Gamma-glutamyl transpeptidase C-Reactive Protein Anti Nuclear Antibodies Anti-dsDNA antibodies Mean corpuscular hemoglobin Mean corpuscular volume Antinuclear Antibody Test antibody test – RNP antibody test - SCL-70 Source: RNZCGPRU. (Fasting status was returned in the top 20 but deleted as it is an information code rather than a costed service.) Using the data from RNZCGPRU for the number of arthritis consultations, it is estimated there would be 1,703,760 tests in 2005. The average price for these top 20 referrals was based on telephone calls to a sample of major New Zealand pathology providers. The estimated average price of the tests was $10.84. The estimate of pathology costs for arthritis for 2005 is thus $18.5m.
This is some 50% higher than expectations, but reasonably so since pathology is provided through multiple funding methods by both the public and private sectors, so there can be incentives that increase relative volumes and costs for pathology in New Zealand (France et al, 2003). DIAGNOSTIC IMAGING
In the RNZCGPRU database, referrals for X-rays and diagnostic scans (eg magnetic resonance imaging) are listed with laboratory referrals in a patient record. Appendix C (Table C-2) shows that of the arthritis consultations, only one X-ray referral and six general radiology referrals were given. No referrals for scans were issued. In the general population, 498 radiology referrals were given. This is an unexpectedly low Economic Cost of Arthritis in New
result and a possible explanation from RNZCGPRU is that some doctors may not be using electronic methods to record X-ray and scan referrals. As such, these data were not utilised in the costing – rather, survey data were sought. Survey data for diagnostic imaging, as with outpatients, were requested from District Health Boards through a brief questionnaire (see Appendix D). The DHBs were asked how many hours they provided diagnostic imaging services to people with arthritis in relation to their arthritis in the most recent year and the average cost per hour of the services. However, as with outpatients, the sample size was inadequately small to be of use, while noting that, of the data received, indications were that X-ray costs were approximately equivalent to those of bone scans and MRI. The method thus used to estimate diagnostic imaging costs is based on the relative ratio of imaging to pathology from Australian data (Access Economics, 2005), where imaging costs are derived as 4.2 times the costs of pathology for people with arthritis, deflated to allow for the high pathology estimate (60% greater than expectation). The estimate for diagnostic imaging in 2005 is thus $48.5m and the cost for
pathology and imaging together is $66.9m.
2.5 RESEARCH
There are no data available on overall expenditure (private and public sector) on health and medical research by disease/condition in New Zealand. The approach adopted was thus to: estimate public sector expenditure from data supplied by the Health Research Council of New Zealand (HRC); and estimate private sector expenditure from OECD estimates of NZ relativities. HRC undertook a search for research projects that it had sponsored based on the search terms: spondylopathy/ies Economic Cost of Arthritis in New
A list of the ICD-10 codes used to define arthritis assisted with the search. Projects were requested to include applied research as well as 'basic' or 'developmental' level research that would also provide primary benefits to people with arthritis – for example, studies of inflammatory processes, or public health/management studies to educate or assist people in the management of their arthritis. Projects identified for the years 2001-2004 are summarised in Table 2-11, with a total cost of $10.5m over the four years and an average cost of $2.6m. TABLE 2-11: HRC RESEARCH PROJECTS RELATING TO ARTHRITIS, 2001-2004, $
Year Title
Comparative mapping in human and mouse to characterise the IDDM6 autoimmune disease locus Viral virulence and pathogenicity: Multi-component manipulation of Genetics of Rheumatoid Arthritis and Gout in New Zealand Mäori Development of mesenchymal stem cell therapies in a cartilage Oxidants, antioxidants and inflammatory diseases Biomechanical vulnerability of the joint tissues with respect to maturity and degree of degeneration Identification of a novel obesity gene Chromosome 18 and susceptibility to autoimmune disease The HRC-sponsored research has been increasing, with trend growth for recent years illustrated in Figure 2-5. FIGURE 2-5: HRC RESEARCH PROJECTS RELATING TO ARTHRITIS, 2001-2004, $M
y = 2.0088Ln(x) + 1.0177 Economic Cost of Arthritis in New
Extrapolating trend growth to 2005 provides our estimate of public-funded research for
this year. The trend growth curve approximates y = 2Ln(x) + 1; for 2005 the estimated
public research spending on arthritis is thus $4.25m.
The private sector research spend estimate is based on proportionality from a 12-
country comparison by the OECD of health R&D in New Zealand and other member
countries (OECD, 2004). This study showed the ratio of private health R&D in NZ as
1.33 times public health R&D for the most recent year provided. The estimate of
private arthritis R&D is thus $5.67m and of total arthritis R&D $9.92m in 2005.
OTHER COSTS FROM SURVEY DATA
As noted above, survey methods and questions are provided at Appendix D. SPECIALIST COSTS
As at October 2003, there were an estimated 251,211 people per rheumatologist in New Zealand, lower than published recommendations, international service provision and lower than the level found in a 1999 New Zealand survey (Harrison, 2004). By 2005, this rate equates to (only) 16.3 full time equivalent rheumatologists in the country. Seven of the ten rheumatologists surveyed responded to the questionnaire regarding
hours worked in the non-hospital sector (to avoid double-counting with outpatient costs)
and costs per hour. Due to the small sample size, for confidentiality reasons these
data are not presented. Extrapolating these data to the population, estimated non-
hospital rheumatology costs in 2005 are only $2.8m.
The Medical Council of New Zealand (2005) estimated that there were 230 orthopaedic surgeons in the New Zealand workforce in 2003. However, the New Zealand Orthopaedic Association provided an estimate of 180 orthopaedic surgeons practising in New Zealand in 2005. Five of the ten orthopaedic surgeons surveyed responded to the questionnaire
regarding hours worked in the non-hospital sector (again to avoid double-counting with
outpatient costs) and costs per hour. As with rheumatologists, due to the small sample
size, for confidentiality reasons these data are not presented. Extrapolating these data
to the population, non-hospital orthopaedic surgery costs in 2005 are estimated to
be $21.8m.
While other specialists may treat people with arthritis outside of the hospital system,
these costs are likely to be very small and difficult to ascertain, and thus have not been
estimated. Total medical specialist costs for people with arthritis in New Zealand
are thus estimated as $24.7m in 2005.
While noting that the sample size of 12 specialists is relatively small, the result is 32% higher than the per capita cost of medical specialists in Australia, suggesting a possibly greater reliance on specialists relative to primary care in New Zealand for treating arthritis compared to Australia, and possibly also higher relative unit costs. Alternatively, since arthritis hospital outpatient costs are estimated to be lower in New Economic Cost of Arthritis in New
Zealand than in Australia per person, there may be a different mix of arthritis specialist services provided through outpatient or private facilities in the two countries. ALLIED HEALTH COSTS
Allied health is defined in New Zealand as "an area of health, such as pharmacy, physiotherapy and occupational therapy, most often based in the community, that does not include doctors and nurses" (Health Workforce Advisory Committee, 2003). Allied health professionals who would treat people with arthritis for their arthritis are likely to mainly comprise physiotherapists and occupational therapists. An allowance of 33% of the total was provided for other allied health workers who may work with people with arthritis for their arthritis-related issues (eg, social workers, psychologists). There are an estimated 1,300 registered psychologists (NZ Psychologists Board) and over 8,000 social workers (Aotearoa New Zealand Association of Social Workers). The Physiotherapy Board of New Zealand (2004) noted that over 2,800 annual certificates to practise were distributed in the year 2003. By 2005 the Physiotherapy Board provided a verbal estimate of 2,900 practising physiotherapists. The New Zealand Occupational Therapy Board website provides a public register of active occupational therapists, of which there were 3,018 listed in May 20059. Four responses were received from physiotherapists and occupational therapists
surveyed regarding hours worked in the non-hospital sector (to avoid double-counting
with outpatient costs) and costs per hour. Due to the small sample size, for
confidentiality reasons these data are not presented. Extrapolating these data to the
population, estimated allied health costs in 2005 are $65.0m. This estimate should
be treated with caution due to the small sample size.
AGED CARE COSTS
Survey responses in relation to aged care were inadequate to estimate the aged care
cost element of arthritis. Proportionality from Access Economics (2005) was therefore
used to estimate this element. The ratio of aged care costs to all other health costs so
derived was 16.8%. Applying this to the sum of cost elements above provides an
estimate of the aged care costs for people with arthritis in New Zealand in 2005
of $69.7m.
It is noted that this is only an approximation since either differences in the institutionalisation of people with arthritis or in relative cost structures for residential care may cause variation. SUMMARY OF HEALTH SYSTEM COSTS
A summary of the health system costs derived from the discussion so far in Chapter 2 is provided in Table 2-12 and Figure 2-6. Economic Cost of Arthritis in New
Total ‘allocated' costs are estimated to be $484.6m in 2005. However, this excludes around 14% costs that are not allocated in recurrent spending – namely, capital expenditures, expenditure on community health, public health programs, health administration and health aids and appliances. Allowance is made for the unallocated component by factoring up for these costs in the manner adopted by the AIHW (AIHW, 2005) – the factor, based on Australian data and used in Access Economics (2005) is 100/(100-14)=16.3% The ‘unallocated' component, comprising the administrative and other items detailed above, is estimated as $78.9m in 2005 for arthritis. Total health costs of arthritis for 2005 are thus estimated to be $563.5m.
Hospital costs represent around one third of total costs. Pathology and imaging is estimated to be 12%, while aged care and allied health are each also around 12% of the total. TABLE 2-12: SUMMARY OF HEALTH COSTS OF ARTHRITIS, NEW ZEALAND, 2005
Health cost element
Public inpatients Private inpatients Total inpatients Outpatients 44.0 Total hospital Pharmaceuticals 40.5 Pathology & imaging Specialists 24.7 Sub-total allocated
Unallocated (administrative, capital, public health etc) Total 563.5
Economic Cost of Arthritis in New
FIGURE 2-6: SUMMARY OF HEALTH COSTS OF ARTHRITIS, NEW ZEALAND, 2005
Aged care
Research 2%
Pathology & imaging
Figure 2-7 compares the relative shares of different cost items between New Zealand and Australia, highlighting less relative expenditure on hospitals, GPs and pharmaceuticals in New Zealand and higher relative expenditure on pathology and imaging, specialists and allied health. Similar trends are apparent in per capita spending for people with arthritis (Figure 2-8). FIGURE 2-7: SHARE OF HEALTH COSTS BY TYPE OF COST, NZ & AUSTRALIA (% TOTAL)
Economic Cost of Arthritis in New
FIGURE 2-8: PER CAPITA HEALTH COSTS BY TYPE OF COST, NZ & AUSTRALIA (NZ$, 2005)
Per person with arthritis, total health spending in New Zealand is estimated to be 95% of that in Australia. In 2005 health spending is $1,080 per person with arthritis per annum
(compared to NZ$1,137 in Australia).
Health spending on arthritis represents 0.39% of GDP (compared with 0.42% of
GDP in Australia).10
10 GDP estimate for NZ based on http://www.treasury.govt.nz/nzefo/2005/selected.asp . For Australia,
Access Economics (2005).
Economic Cost of Arthritis in New
3. INDIRECT
The World Health Organization and cost of illness studies in the past have typically classed indirect costs as all those costs that are not direct health system costs, the approach adopted here. More recently, the importance of making the economic distinction between real and transfer costs has been recognised. Real costs use up real resources, such as capital or labour, or reduce the
economy's overall capacity to produce goods and services.
Transfer payments involve payments from one economic agent to another that
do not use up real resources, for example, a disability support pension, or
taxation revenue. These payments impact more on the distribution, rather than
total level of wellbeing in society.
Transfer costs are important when adopting a whole-of-government approach to policy
formulation and budgeting. Measurement of indirect costs remains a matter of some
debate and controversy. In this report, we estimate two types of indirect costs of
arthritis.
Financial costs (this section) include lost production from arthritis-related
morbidity and the associated deadweight taxation losses), and other financial
costs eg, carers, aids and home modifications for those disabled.
Non-financial costs (Section 4) derive from loss of healthy life—the pain,
premature death and loss of life quality that result from arthritis. These are more
difficult to measure, but can be analysed in terms of the years of healthy life lost,
both quantitatively and qualitatively, known as the ‘burden of disease', with an
imputed value of a ‘statistical' life so as to compare these costs with financial
costs of arthritis.
3.1 PRODUCTIVITY LOSSES
Access Economics measures the lost earnings and production due to both illness and premature death using a ‘human capital' approach. The lower end of such estimates includes only the ‘friction' period until the worker can be replaced, which would be highly dependent on labour market conditions and un(der)employment levels. In an economy operating at near full capacity, as New Zealand is at present, a better estimate includes costs of temporary work absences plus the discounted stream of lifetime earnings lost due to early retirement from the workforce. In this case, it is likely that, in the absence of illness, people with arthritis would participate in the labour force and obtain employment at the same rate as other New Zealanders, and earn the same average weekly earnings. The implicit and probable economic assumption is that the numbers of such people would not be of sufficient magnitude to substantially influence the overall clearing of the labour market, thus making a net addition to the productive capacity of NZ. LOWER WORKFORCE PARTICIPATION
Overall, New Zealanders with arthritis are less likely to be employed than those without arthritis. Figure 3-1 shows that rates of employment among people with arthritis are lower than for people of the same age who do not have arthritis. Moreover, for people aged 45-64, who account for around 39% of all New Zealanders with arthritis, the rate Economic Cost of Arthritis in New
of employment is significantly lower. These years also tend to be when people are at their most productive, receiving higher wages. FIGURE 3-1: EMPLOYMENT RATES BY AGE, NEW ZEALAND, 2003
Source: Access Economics based on a special data request from Ministry of Health NZHS. Arthritis is known to be more prevalent in female, older people and people of Mäori descent. All these groups also tend to have lower levels of workforce participation and employment than the average New Zealand population. For this reason it is necessary to standardise for the differences in age, gender and ethnic background between the two groups. As Figure 3-2 shows, when these compositional differences are accounted for, the overall rate of employment for people with arthritis is 64.2%. This is 4.9% lower than the rest of the New Zealand population at the same time. Assuming that, in the absence of arthritis, these people would obtain employment at the same rate as other New Zealanders, we can attribute the entire 4.9% difference in employment rates to the disabling effects of arthritis. Economic Cost of Arthritis in New
FIGURE 3-2: AGE-STANDARDISED EMPLOYMENT RATE, NZ, 2003
In 2005, if 4.9% of people with arthritis were not working due to their arthritis, this would
equate to 25,440 people. It is assumed that if they were employed, these people
would, on average, earn the same average weekly earnings as other New Zealanders.
In March 2005 the average weekly total earnings for a New Zealander was $794.83
(Statistics New Zealand, 2005a,b), including full-time and part-time earnings. As Table
3-1 shows, the total value of these lost earnings would be $1,053.6m in 2005.
TABLE 3-1: COST OF REDUCED EMPLOYMENT, NEW ZEALAND, 2005
People not employed due to arthritis Average weekly earnings Lost earnings due to lack of workforce participation Lost earnings due to increased absenteeism Total productivity losses
$1,071.6 m
TEMPORARY WORK ABSENCES
As well as premature workplace separation, some people with arthritis will take
temporary leave from work (eg, for joint replacement surgery) without exiting the
workplace entirely. In New Zealand, no data is collected on the level of excess
temporary absenteeism resulting from arthritis. Access Economics has previously
estimated, based on Australian data, that the cost of reduced earnings due to arthritis-
related absenteeism is around 1.7% of the cost due to reduced workforce participation
(Access Economics, 2005). If a similar ratio holds for New Zealand, the cost of
absenteeism would be $17.9 million in 2005, and total productivity losses due to
arthritis will be over $1.07 billion.
TAXATION REVENUE FOREGONE
People with arthritis who work less or retire early not only forego income, but also pay less personal income tax. To the extent that people with lower incomes also consume a smaller set of goods and services, indirect taxes levied on consumption will also fall. Economic Cost of Arthritis in New
While these effects would best be calculated in the context of a general equilibrium model of the economy, a partial equilibrium estimate can be obtained using average tax rates as fol ows. Personal income tax foregone is estimated as a product of the average personal
income tax rate (22%, as estimated in the Access Economics macroeconomic model
estimate for 2005) and the foregone earnings. With arthritis and lower income, there
will be less consumption of goods and services, estimated up to the level of the
disability pension ($193.17 per week is used, the average of single and each member
of a couple's maximum adult invalid benefit rate per week, with rates from 1 April 2005
obtained from www.workandincome.govt.nz). Without arthritis, it is conservatively
assumed that consumption would comprise 90% of income (the savings rate may well
be lower than this). The indirect tax foregone is estimated as a product of the foregone
consumption and the average indirect tax rate, proxied as the current rate of GST in
New Zealand, 12.5%. This estimate of taxation foregone is conservative since the
average tax rate of people with arthritis may be less than the average tax rate of people
across Australia, since more of them may work part time and their average incomes
(and hence marginal tax rates) may thus be lower.
Table 3-2 shows that the potential tax revenue foregone in 2005, due to people
with arthritis working less or leaving the workforce, is $306.9 million. Of this
$235.7 million (76.8%) is foregone personal income tax and the remaining $71.2 million
(23.2%) is foregone indirect tax.
Lost taxation revenue is not in itself a real economic cost, but a transfer payment. Taxation payments transfer income from individual members of society to the Government who then transfers it again to other members of the community through the welfare system and government services. However, in reality these transfers are not costless to orchestrate. For example, administration of a taxation system has costs. In Australia, a comparison of the total amounts spent and revenue raised in 2000-01, relative to the Commonwealth department running costs, suggests that administration costs account for 1.25% of each taxation dollar raised (Access Economics, 2005). Even greater costs are incurred due to the distortionary impact that taxation has on workers' work and consumption choices. Work by the Australian Productivity Commission (2003, p6.15-6.16 with rationale) found the efficiency cost (or deadweight loss – DWL) associated with these distortions amounts to 27.5% of each tax dollar. In New Zealand, studies by Diewert and Lawrence (1994, 1995, 1996) found that in 1991 the deadweight loss associated with personal income tax was 18% and for consumption taxes around 14%. They also noted that the DWLs associated with labour taxation increased from 5% to over 18% in the 20 years up to 1991. In this report, we use the 18% for the estimate of the deadweight losses, noting that that it may be a conservative estimate in view of another study (McKeown and Woodfield, 1995) based on 1988 data that generated estimates ranging from 24.6% to 146.2% of taxes raised. Neither estimate includes possible DWLs from the taxation of income earned on capital (appropriate in this application), or administration and compliance costs (unfortunate in this application). The use of 18% balances the upside risk that the DWLs have continued to increase since 1991 against the downside risk that tax raised from non-labour sources has lower associated DWLs. Table 3-2 shows that the DWL associated with the additional taxation required is
$55.2m in 2005.
Economic Cost of Arthritis in New
TABLE 3-2: COST OF FOREGONE TAXATION, NEW ZEALAND, 2005
Average personal income tax rate Potential personal income tax lost Average indirect tax rate Potential indirect tax lost Total lost tax revenue
Deadweight loss from additional taxation DWL from additional taxation
3.2 INFORMAL AND FORMAL COMMUNITY CARE
A significant number of people with arthritis will receive informal care from family and friends as either a substitute for or complement to care provided through the formal health sector. However estimates of the health sector costs set out in the previous chapter include only the resources utilised by the formal sector to provide assistance to New Zealanders for their arthritis. As informal care is unpaid it is sometimes also thought of as free. However, the time devoted by a carer is time they cannot use for other activities such as paid employment or leisure activities. It is noted that, as with the approach to production losses, this analysis is partial (rather than a general equilibrium approach) and that an implicit principle is that the economy is operating at full capacity (and therefore carer tasks are a net resource cost). In this context, there are several possible methods for valuing the time foregone by caregivers including: Opportunity cost: the value of wages foregone;
Replacement valuation: the cost of buying a similar amount of services from the
formal care sector; and
Self-valuation: what carers themselves feel they should be paid.
Due to the lack of information about the demographic characteristics of carers of New Zealanders with arthritis, Access Economics has first estimated the replacement valuation and from this derived an estimate of the opportunity cost valuation approach, noting that replacement valuation will always give higher results than the other two methods. HOURS OF COMMUNITY CARE PROVIDED
In New Zealand, as in other countries, there are few robust data on the need and use of carers, by people with arthritis for their arthritis. The NZHS asked people whether they had reduced time spent, or had difficulty with regular daily activities as a result of their physical health. Daily activities could include work, housekeeping and looking after a child or other person. Responses of people with arthritis are set out in Table 3-3. Economic Cost of Arthritis in New
TABLE 3-3: EFFECT OF PHYSICAL HEALTH ON DAILY ACTIVITIES, NEW ZEALAND, 2003
Type of arthritis
Reduced time spent
Had difficulty performing
on activities (%)
activities (%)
Rheumatoid arthritis Osteoarthritis 32.2 Source: Special data request from the MoH 2003 NZHS A Dutch study of rheumatoid arthritis patients (Brouwer et al, 2004) found approximately 50% of patients receive some level of informal care from their partner. These informal care-givers spent, on average, 27.4 hours per week providing care, comprising around 15 hours per week on household tasks such as shopping, cleaning and other household chores and 12.4 hours per week assisting the patient with the activities of daily living (ADL). Informal care was supplemented with formal assistance with household tasks in 24% of cases (around 13% of all patients) for an average of 4.5 hours per week and for ADL in 3.9% of cases (2.0% of all patients) for an average of 2.5 hours per week. In addition, 6.1% of patients receiving informal care were on a waiting list for formal care. Using the relative need for assistance for different types of arthritis from the NZHS
together with the Dutch study results, it is possible to estimate the value of formal and
informal care provided to New Zealanders with arthritis in 2005. To be conservative
the estimate of average time spent by informal care-givers each week is limited to
hours spent providing personal care, not household chores. On this basis a total of
1.5m hours of formal care and 113.9m hours of informal care will be provided to
New Zealanders with some form of arthritis in 2005.
VALUE OF CARE
The hours of care (both formal and informal) are valued at the average hourly cost of
employing a person to work as a carer, including a loading for employee on-costs,
administration and capital overheads. Access Economics estimates the hourly cost for
a worker in Australia is A$25.01 per hour in June 2005, or NZ$26.78 converting at
purchasing power parity (PPP) of 1.0708. This includes allowances for on-costs such
as superannuation, and administrative and capital overheads. A brief internet search
appears to suggest that this a similar unit cost applies in New Zealand (see, for
example, www.domestic.co.nz). At this unit cost, the total value of care provided is
$3.60 billion in 2005. Of this, over 98.9% ($3.56 billion) is the replacement value
of informal care and the remaining $40 million formal care provision, as set out in
Table 3-4.
While it is quite legitimate to use the replacement valuation estimate for formal
community costs, for informal costs a (preferable) opportunity cost estimate is made by
multiplying the value of care by the average employment rate (in this case the 15%
employment rate for those aged over 65). The alternative opportunity cost measure
is thus much lower (than $3.56bn) at $536.7m.
Economic Cost of Arthritis in New
TABLE 3-4: VALUE OF CARE PROVIDED TO PEOPLE WITH ARTHRITIS, NEW ZEALAND, 2005
Rheumatoid
Other arthritis
All forms of
arthritis
arthritis
Average hours per week
% of people receiving care
Total hours of care per year (million)
$ value of care
Total (replacement) 872 Total (opportunity)
Note: Numbers may not sum due to rounding and the existence of people with arthritis of unknown type (see Chapter 1). 3.3 OTHER INDIRECT COSTS
DEADWEIGHT LOSSES FROM WELFARE PAYMENTS
Duthie et al (2004) highlighted the 2001 New Zealand Disability Survey that collected data on arthritis as a cause of disability (Statistics New Zealand, 2002). This study found that arthritis was the main condition causing disability for 14% of the disabled population. In 2004 the NZ Department of Social Policy provided Invalid Benefits worth $976.1 million and Sickness Benefits worth $469.5 million (Ministry of Social Development, 2004). If arthritis accounts for 14% of these payments, the total welfare support to people due to arthritis was $202.4 million in 2003-04. Without further information on the number of people with arthritis that do receive a
benefit, the type, their financial and living arrangements and age, it is not possible to
accurately project the amount of welfare payments that will be made to them this year.
From 1996 to 2002 the number of recipients of invalid benefits whose most serious
condition was a musculoskeletal complaint increased 97% or 13.8% per annum from
4,703 in 1996 to 9,274 in 2003. Over the same time the number of recipients of
sickness benefit with a musculoskeletal condition increased 53%, although some of this
rise may be attributable to coding changes in the mid 1990s (Ministry of Social
Development, 2005). To remain conservative, we merely inflate the 2003-04 estimate
by 2.8% for expected inflation to June 2005. On this basis, the total value of arthritis-
related disability pensions in 2005 is estimated to be $208.1 million.
Recalling that invalid and sickness benefits are transfers, not real costs, they should not be included in the estimation of total costs. As with taxation foregone, welfare Economic Cost of Arthritis in New
payments do, however, have associated real DWLs due to the distortions they impose
on production patterns and the need to fund the administration of the welfare system.
As in Section 3.1.3, these are estimated as 18% of the value of the transfers, so the
total deadweight losses from welfare payments in 2005 are estimated to be
$37.4m.
AIDS, MODIFICATIONS AND TRAVEL
There are also the costs of mobility aids, modifications to the homes of people with arthritis, travel to health services and other indirect costs of arthritis. There is a paucity of data on these costs, while noting that there is an allowance for medical aids and equipment in the scale-up factor for non-allocated health costs described in Section 2.7. Walsh & Chappell (1999) conducted a survey on behalf of the Australian Department of
Family and Community Services of 409 recipients of disability support pension who had
a musculoskeletal impairment. The study estimated the additional expenditure of these
people on personal care, home help, and other aids and appliances. Based on these
data, Access Economics (2005) estimates the cost of formal (paid) community carers
for Australian arthritis sufferers in 2004, and the costs of aids, modifications and travel
associated with their condition. The ratio (1.164) of these latter costs to the formal care
($40m from Table 3-4) is used to derive an estimate here of the cost of aids,
modifications and travel of $46.8m for New Zealanders with arthritis in 2005.
SUMMARY OF THE FINANCIAL COSTS OF ARTHRITIS
The total real financial costs of arthritis are thus estimated to be $2.35bn in 2005,
summarised in Table 3-5 and Figure 3-3.
Lost earnings are the largest cost item at $1.07bn (46% of the total). Informal sector care (measure on an opportunity cost basis) is second largest at 23% ($537m). Hospitals represent 9% of total costs, while residential age care is 3% and other health costs 11% of total costs. Community care and aids, modifications and travel are each around 2% of total costs at $47m and $40m respectively. The deadweight costs of welfare and taxation transfers comprise the remaining 3% ($93m). Indirect costs outweigh direct health costs over 3 to 1. Annual costs per person with arthritis are $4,505, $574 for every New
Zealander and 1.6% of GDP in total.
Economic Cost of Arthritis in New
TABLE 3-5: ARTHRITIS, FINANCIAL COST SUMMARY, 2005, $M
Cost element
Real cost
Transfer
Allocated health costs Other al ocated health Unallocated health costs Total health costs
Indirect financial costs Lost earnings (people with arthritis) Tax foregone (people with arthritis) Opportunity cost of informal carers Welfare payments Aids, modifications and travel Formal community care Total indirect financial
Subtotal, financial costs
Per person with arthritis Per capita (population) FIGURE 3-3: ARTHRITIS, FINANCIAL COST SUMMARY, 2005, % TOTAL
Aids, modifications & travel 2%
Aged care
Other health costs
Community care 2%
Transfer DWLs
Note: Numbers may not sum due to rounding. Access Economics' findings regarding New Zealand cost shares for arthritis concord well with the Australian results (Access Economics, 2005), noting that: Only the value of paid carers was included in the Australian study, so overall the estimated cost in New Zealand is higher (1.6% of GDP compared to 1.4% in Australia), as it also includes a valuation of informal care. Economic Cost of Arthritis in New
4. BURDEN
The term ‘burden of disease' refers to the impact of pain, suffering, disability and premature death resulting from disease and injury. SUFFERING AND PREMATURE DEATH
METHODOLOGY
VALUING LIFE AND HEALTH
Since Schelling's (1968) discussion of the economics of life saving, the economic
literature has properly focused on willingness to pay (willingness to accept) measures
of mortality and morbidity risk. Using evidence of market trade-offs between risk and
money, including numerous labour market and other studies (such as installing smoke
detectors, wearing seatbelts or bike helmets etc), economists have developed
estimates of the value of a ‘statistical' life (VSL).
The willingness to pay approach estimates the value of life in terms of the amounts that individuals are prepared to pay to reduce risks to their lives. It uses stated or revealed preferences to ascertain the value people place on reducing risk to life and reflects the value of intangible elements such as quality of life, health and leisure. While it overcomes the theoretical difficulties of the human capital approach, it involves more empirical difficulties in measurement (BTE, 2000, pp20-21). Viscusi and Aldy (2002) summarise the extensive literature in this field, most of which has used econometric analysis to value mortality risk and the ‘hedonic wage' by estimating compensating differentials for on-the-job risk exposure in labour markets, in other words, determining what dollar amount would be accepted by an individual to induce him/her to increase the possibility of death or morbidity by x%. They find the VSL ranges between US$4 million and US$9 million with a median of US$7 million (in year 2000 US dollars), similar but marginally higher than the VSL derived from US product and housing markets, and also marginally higher than non-US studies, although all in the same order of magnitude. They also review a parallel literature on the implicit value of the risk of non-fatal injuries. A particular life may be regarded as priceless, yet relatively low implicit values may be assigned to life because of the distinction between identified and anonymous (or ‘statistical') lives. When a ‘value of life' estimate is derived, it is not any particular person's life that is valued, but that of an unknown or statistical individual (Bureau of Transport and Regional Economics, 2002, p19). Weaknesses in this approach, as with human capital, are that there can be substantial variation between individuals. Extraneous influences in labour markets such as imperfect information, income/wealth or power asymmetries can cause difficulty in correctly perceiving the risk or in negotiating an acceptably higher wage. Economic Cost of Arthritis in New
Viscusi and Aldy (2002) do not include any New Zealand studies in their meta-analysis (if they exist) but do include two Australian studies, notably Kniesner and Leeth (1991) of the Australian Bureau of Statistics (ABS) with VSL of US2000$4.2 million and Miller et al (1997) of the National Occupational Health and Safety Commission (NOHSC) with quite a high VSL of US2000$11.3m-19.1 million (Viscusi and Aldy, 2002, Table 4, pp92-93). There is also the issue of converting foreign (US) data to New Zealand dollars using either exchange rates or preferably purchasing power parity and choosing a period. Access Economics (2003) presents outcomes of studies from Yale University (Nordhaus, 1999) – where VSL is estimated as $US2.66m; University of Chicago (Murphy and Topel, 1999) – US$5m; Cutler and Richardson (1998) – who model a common range from US$3 million to US$7m, noting a literature range of $US0.6 million to $US13.5 million per fatality prevented (1998 US dollars). These eminent researchers apply discount rates of 0% and 3% (favouring 3%) to the common range to derive an equivalent of $US 75,000 to $US 150,000 for a year of life gained. DALYS AND QALYS
In an attempt to overcome some of the issues in relation to placing a dollar value on a human life, in the last decade an alternative approach to valuing human life has been derived. The approach is non-financial, where pain, suffering and premature mortality are measured in terms of Disability Adjusted Life Years (DALYs), with 0 representing a year of perfect health and 1 representing death (the converse of a QALY or "quality-adjusted life year" where 1 represents perfect health). This approach was developed by the World Health Organization (WHO), the World Bank and Harvard University and provides a comprehensive assessment of mortality and disability from diseases, injuries and risk factors in 1990, projected to 2020 (Murray and Lopez, 1996). Methods and data sources are detailed further in Murray et al (2001). The DALY approach has been adopted and applied in Australia by the Australian Institute for Health and Welfare (AIHW) with a separate comprehensive application in Victoria. Mathers et al (1999) from the AIHW estimate the burden of disease and injury in 1996, including separate identification of premature mortality (YLL) and morbidity (YLD) components. In any year, the disability weight of a disease (for example, 0.18 for a broken wrist) reflects a relative health state. In this example, 0.18 would represent losing 18% of a year of healthy life because of the inflicted injury. Martin Tobias and the New Zealand Burden of Disease Study (NZBDS) team utilised the global and Australian studies to estimate the burden of disease for New Zealand (Ministry of Health, 2001). Estimates of YLL, YLD and DALYs for over 100 conditions in nine age groups for both genders and two major ethnic groups (Mäori and non-Mäori) are provided for the year 1996. The DALY approach has been successful in avoiding the subjectivity of individual valuation and is capable of overcoming the problem of comparability between individuals and between nations, although nations have subsequently adopted variations in weighting systems. The main problem with the DALY approach is that it is not financial and is thus not directly comparable with most other cost measures. In public policy making, therefore, there is always the temptation to re-apply a financial measure conversion to ascertain Economic Cost of Arthritis in New
the cost of an injury or fatality or the value of a preventive health intervention. Such financial conversions tend to utilise "willingness to pay" or risk-based labour market studies described above. The Australian Department of Health and Ageing (based on work by Applied Economics) has adopted a very conservative approach to this issue, placing the value of a human life year at around A$60,000 per annum, which is lower than most international lower bounds on the estimate. "In order to convert DALYs into economic benefits, a dollar value per DALY is required. In this study, we follow the standard approach in the economics literature and derive the value of a healthy year from the value of life. For example, if the estimated value of life is A$2 million, the average loss of healthy life is 40 years, and the discount rate is 5 per cent per annum, the value of a healthy year would be $118,000.11 Tolley, Kenkel and Fabian (1994) review the literature on valuing life and life years and conclude that a range of US$70,000 to US$175,000 per life year is reasonable. In a major study of the value of health of the US population, Cutler and Richardson (1997) adopt an average value of US$100,000 in 1990 dollars for a healthy year. Although there is an extensive international literature on the value of life (Viscusi, 1993), there is little Australian research on this subject. As the Bureau of Transport Economics (BTE) (in BTE, 2000) notes, international research using willingness to pay values usually places the value of life at somewhere between A$1.8 and A$4.3 million. On the other hand, values of life that reflect the present value of output lost (the human capital approach) are usually under $1 million. The BTE (2000) adopts estimates of $1 million to $1.4 million per fatality, reflecting a 7 per cent and 4 per cent discount rate respectively. The higher figure of $1.4 million is made up of loss of workforce productivity of $540,000, loss of household productivity of $500,000 and loss of quality of life of $319,000. This is an unusual approach that combines human capital and willingness to pay concepts and adds household output to workforce output. For this study, a value of $1 million and an equivalent value of $60,000 for a healthy year are assumed.12 In other words, the cost of a DALY is $60,000. This represents a conservative valuation of the estimated willingness to pay values for human life that are used most often in similar studies.13" (DHA, 2003, pp11-12)." As the citation concludes, the estimate of A$60,000 per DALY is very low. The Viscusi (1993) meta-analysis referred to reviewed 24 studies with values of a human life ranging between $US 0.5 million and $US 16m, all in pre-1993 US dollars. Even the lowest of these converted to 2003 Australian dollars exceeds the estimate adopted (A$1m) by nearly 25%. The BTE study cited tends to disregard the literature at the higher end and also adopts a range (A$1-$1.4m) below the lower bound of the international range that it identifies (A$1.8-$4.3m). 11 In round numbers, $2,000,000 = $118,000/1.05 + $118,000/(1.05)2 + … + $118,000/(1.05).40 [AE comment: The actual value should be $116,556, not $118,000 even in round numbers.] 12 The equivalent value of $60,000 assumes, in broad terms, 40 years of lost life and a discount rate of 5 per cent. [AE comment: More accurately the figure should be $58,278.] 13 In addition to the cited references in the text, see for example Murphy and Topel's study (1999) on the economic value of medical research. [AE comment. Identical reference to our Murphy and Topel (1999).] Economic Cost of Arthritis in New
The rationale for adopting these very low estimates is not provided explicitly. Certainly it is in the interests of fiscal restraint to present as low an estimate as possible. It is understood the BTRE is currently in the process of revising its estimates upwards (to around A$2.5m). In contrast, the majority of the literature as detailed above appears to support a higher estimate for VSL, as presented in Table 4-1, which Access Economics believes is important to consider in disease costing applications and decisions. The US dollar values of the lower bound, midrange and upper bound are shown at left. The ‘average' estimate is the average of the range excluding the high NOHSC outlier. Equal weightings are used for each study as the: Viscusi and Aldy meta-analysis summarises 60 recent studies; ABS study is Australian (possibly more like New Zealand than elsewhere); and Yale and Harvard studies are based on the conclusions of eminent researchers in the field after conducting literature analysis. Where there is no low or high US dollar estimate for a study, the midrange estimate is used to calculate the average. The midrange estimates are converted to Australian dollars at purchasing power parity (as this is less volatile than exchange rates) of USD=0.7281AUD for 2003 as estimated by the OECD. Access Economics concludes the VSL range in Australia lies between A$3.7 million and A$9.6m, with a mid-range estimate of A$6.5m. These estimates have conservatively not been inflated to 2005 prices, given the uncertainty levels. In turn, we convert these to New Zealand dollars in the far right column, again using purchasing power parity. The VSL range in New Zealand lies between NZ$3.9 million and NZ$10.1m, with a mid-range estimate of NZ$6.9m. We conservatively use the lowest estimate, NZ$3.9m, in this study. TABLE 4-1: ESTIMATES OF VSL, VARIOUS YEARS, US$, A$ AND NZ$
Lower Midrange Upper 0.7281 .6892
Viscusi & Aldy meta- analysis 2002 Australian: ABS Yale (Nordhaus) 1999 Harvard (Cutler & Richardson) 1998 Average* * Average of range excluding high NOHSC outlier, using midrange if no data; conservatively not inflated. A$ and NZ$ conversions are at the OECD 2003 PPP rate. DISCOUNT RATE
Choosing an appropriate discount rate for present valuations in cost analysis is a subject of some debate, and can vary depending on which future income or cost stream is being considered. There is a substantial body of literature, which often provides conflicting advice, on the appropriate mechanism by which costs should be Economic Cost of Arthritis in New
discounted over time, properly taking into account risks, inflation, positive time preference and expected productivity gains. The absolute minimum option that one can adopt in discounting future income and costs is to set future values in current day dollar terms on the basis of a risk free assessment about the future (that is, assume the future flows are similar to the near-certain flows attaching to a long term Government bond). Wages should be assumed to grow in dollar terms according to best estimates for inflation and productivity growth. In selecting discount rates for New Zealand projects, we have settled upon the following as the preferred approach. Positive time preference: We use the long term nominal bond rate of 6.0% pa
(from recent history in trading of NZ Government 10 year bonds) as the
parameter for this aspect of the discount rate. (If there were no positive time
preference, people would be indifferent between having something now or a long
way off in the future, so this applies to all flows of goods and services.)
‰ Inflation: The Reserve Bank of New Zealand has an agreement with the New
Zealand government to pursue monetary policy that delivers 1% to 3% inflation on average over the medium term. Over the past few years inflation has consistently remained in the top half of this band, and is expected to remain above 2.5% until 2008 (New Zealand Treasury, 2005) and so we use an assumption of 2.2% pa for this variable. (It is important to allow for inflation in order to derive a real, rather than nominal, rate.) ‰ Productivity
growth: The New Zealand Treasury expects labour productivity
growth of around 2% per annum in the year to March 2007, before returning to its long-term trend of around 1.5% per annum (New Zealand Treasury, 2005). For New Zealand based disease costing, this estimate of 1.5% will be used. By way of comparison, in Australia the Commonwealth Government's Intergenerational report assumed productivity growth of 1.7% in the decade to 2010 and 1.75% thereafter. Access Economics uses 1.75% for disease costing in Australia. There are then two different discount rates that should be applied: To discount income streams of future earnings, the discount rate is: Ž 6.0 - 2.2 - 1.5 = 2.3%. To discount other future streams (healthy life, health services, legal costs, accommodation services and so on) the discount rate is: Ž 6.0 – 2.2 = 3.8% While there may be sensible debate about whether health services (or other costs with a high labour component in their costs) should also deduct productivity growth from their discount rate, we argue that these costs grow in real terms over time significantly as a result of other factors such as new technologies and improved quality, and we could reasonably expect this to continue in the future. Annualising the VSL of NZ$3.9 million in Table 4-1 using the discount rate of 3.8% over
an average 40 years expected life span (the average from the meta-analysis of wage-
risk studies) provides an estimate of the value of a life year (VLY) of $184,216.
Economic Cost of Arthritis in New
ESTIMATING THE BURDEN OF DISEASE FOR
ARTHRITIS IN 2005
The burden of disease for 2005 is based on the burden estimated by the Ministry of Health (2001) for 1996, inflated on the basis of the growth in arthritis prevalence over the period 1996 to 2005. The Ministry of Health reported selective statistics from the 1996 study, including that: Osteoarthritis has the 6th largest disability burden (YLD) in New Zealand; Musculoskeletal disease has five times the average disability:mortality (YLD:YLL) ratio and represents 3% of total DALYs, of which osteoarthritis accounts for two thirds; and Severe rheumatoid arthritis has the second highest disability weight in the NZBDS – 0.94, equal with severe dementia and just behind terminal phase AIDS (0.95). YLLs and YLDs were only reported for osteoarthritis (by gender) and for all musculoskeletal disease (by gender and by age). Total DALYs for osteoarthritis, rheumatoid arthritis and all musculoskeletal conditions were reported by gender and by ethnicity (Mäori/non-Mäori). Unfortunately, it was not possible to obtain from the Ministry for Health a detailed breakdown of YLLs and YLDs by age, gender, ethnicity and type of arthritis. Access Economics (2005), based on input from rheumatologists and the relative prevalence of conditions, estimated that around 51% of the burden of disease from musculoskeletal disease, other than osteoarthritis or rheumatoid arthritis, could be attributed to other forms of arthritis. We apply the same percentage here to estimate the pain and suffering associated with other forms of arthritis. The total burden of disease for all forms of arthritis in 2005 is estimated as
19,121 DALYs.
TABLE 4-2: BURDEN OF DISEASE, DALYS BY TYPE OF ARTHRITIS, NEW ZEALAND, 2005
DALYs Male
Non-Mäori
Rheumatoid arthritis Osteoarthritis 5,342 Total arthritis
As Table 4-2 and Figure 4-1 show, the majority of the burden of disease (70% or 13,470 DALYs in 2005) is accounted for by osteoarthritis, the most common form of arthritis. Rheumatoid arthritis accounts for another 2,843 DALYs or 15% of total DALYs from arthritis. Economic Cost of Arthritis in New
FIGURE 4-1: BURDEN OF DISEASE BY TYPE OF ARTHRITIS, 2005
Total DALYs, 2005
The majority of the burden of disease (63%, Figure 4-2) is borne by women, as would be expected from the increased prevalence of arthritis amongst females. FIGURE 4-2: BURDEN OF DISEASE BY GENDER & ETHNICITY, NEW ZEALAND, 2005
Maori, Male
Total DALYs, 2005
It is also possible from the NZBDS data to make comparisons with other disease categories, such as cardiovascular disease, cancer, injury, diabetes, asthma. In 1996 over 13% of the burden of disease in New Zealand was due to ischaemic heart disease. The next largest cause was stroke, responsible for 5.3% of all DALYs lost. Arthritis represents about 2.8% of the total burden of disease, more than breast cancer or dementia (Figure 4-3). Economic Cost of Arthritis in New
FIGURE 4-3: COMPARISON OF BURDEN OF DISEASE, NEW ZEALAND, 1996
Road traffic injury
Lung cancer
DALYs as a % of total DALYs
Note: COPD = chronic obstructive pulmonary disease; LRTI = lower respiratory tract infection. 4.3 VALUING THE BURDEN OF DISEASE
Multiplying the burden of disease in DALYs as derived in the preceding section by the
value of a life year (VLY) from Section 4.1.3 of $184,216 derived above provides a
monetary measure of the gross disability and premature mortality burden of arthritis.
The gross cost of disability and premature death from arthritis is estimated as
$3.5 billion in 2005.
TABLE 4-3: COST OF SUFFERING FROM ARTHRITIS, $M, NEW ZEALAND, 2005
Gross cost of suffering
Less health costs borne personally 42 Less after tax production losses 288 Less paid carers, aids, modifications and travel Net cost of suffering
2,337 2,560
NB: The total value of health costs, production losses, aids and welfare receipts are allocated in proportion to the gross cost of pain and suffering born by males/females and Mäoris/non-Mäoris with arthritis. The actual incidence of these costs may be slightly different, depending on the socioeconomic status, and severity of a person's arthritis. Bearing in mind that the wage-risk studies underlying the calculation of the VSL take into account all known personal impacts – suffering and premature death, lost wages/income, out-of-pocket personal health costs and so on – this base case Economic Cost of Arthritis in New
estimate of $3.5 billion should be treated as a ‘gross' figure. However, costs specific to arthritis that are not borne by the individual and are thus unlikely to have entered into the calculations of people in the source wage/risk studies (for example, publicly financed health spending, taxation on earnings) should not be netted out. In Table 4-3 these known impacts are deducted from the gross cost of suffering. New
Zealand does not have a central registry of health costs, such as that maintained by
the Australian Institute of Health and Welfare, which would allow us to estimate the
proportion of total health expenditure met through private contributions rather than
government funding. Instead we use the most recent Australian data (2002-03) where
personal contributions were estimated to be just under 20% of total health funding
(AIHW, 2004). The value of production losses and paid carers are as calculated in
Chapter 3 on indirect costs. With these adjustments the net cost of disability and
premature death due to arthritis in 2005 is $2.56 billion dollars.
Economic Cost of Arthritis in New
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APPENDIX A – NZHS PREVALENCE DATA
TABLE A-1: NZ PREVALENCE, ALL ARTHRITIS, BY AGE, GENDER & RACE, 2002-03
All Female Male All Female Male All Female Male
Estimate
17.3 13.9 11.3
10.4 12.4 16.2
(numerator) 2285 1415 870 688 403 285 1597 1012 585 Estimate
(numerator) 28 20 8 16 12 4 12 25-34 Estimate
3.8 3.3 4.9
5.2 4.5 3.4
(denom'r) 2431 1609 822 1002 35-44 Estimate
8.8 8.7 10 12 10.8 (numerator) 190 116 74 73 (denom'r) 2774 1738 1036 975 620 355 1799 1118 681 45-54 Estimate
15.4 16.6
14.2 22 15.3
14.8 16.7
(numerator) 368 215 153 137 71 66 231 144 87 (denom'r) 2111 1232 879 698 55-64 Estimate
31.6 25.6 28.3
27.6 29.1 28.7
65-74 Estimate
52.6 38.5 43.1
42.9 43.3 46.4
53.1 38.2
75-84 Estimate
55.5 46.9 51.2
58.8 38.7 51.5
55.4 47.1
(numerator) 419 257 162 79 52 27 340 205 135 85+ Estimate
(numerator) 93 65 28 6 (denom'r) 185 130 55 9 Economic Cost of Arthritis in New
TABLE A-2: NZ PREVALENCE, OSTEOARTHRITIS, BY AGE, GENDER & RACE, 2002-03
All Female Male All Female Male All Female Male
ALL Estimate
4.1 4.1 8.2 10.1 6.2
8.3 10.3 6.7 5.5 5.7 6.3 8.8 11.1 7 (numerator) 1013 15-24 Estimate
Estimate
(numerator) 17 14 3 11 (denom'r) 2412 1596 816 995 Estimate
(denom'r) 2733 1709 1024 961 610 351 1772 1099 673 Estimate
(numerator) 149 102 47 48 (denom'r) 2044 1193 851 680 55-64 Estimate
18 13.3 13.6
12.1 15.3 15.8
18.5 13.2
(numerator) 238 150 88 58 34 24 180 116 64 65-74 Estimate
35.1 16.4 16.8
20 13.5 27
35.9 16.5
(numerator) 278 211 67 52 41 11 226 170 56 75-84 Estimate
35.3 29.3 18.1
35.7 29.6
(numerator) 219 143 76 27 85+ Estimate
(numerator) 51 41 10 2 (denom'r) 164 117 47 7 Economic Cost of Arthritis in New
TABLE A-3: NZ PREVALENCE, RHEUMATOID ARTHRITIS, BY AGE, GENDER & RACE, 2002-03
All Female Male All Female Male All Female Male
Estimate
3.2 3.7 2.6
3.3 3.9 2.5
3.2 3.7 2.6
2.8 3.2 2 2.1 2.1 1.1 4.4 5.7 4 3.6 4.2 3.2 195 130 65 297 196 101 (denom'r) 12485 7575 4910 15-24 Estimate
(denom'r) 1618 956 662 Estimate
(denom'r) 2412 1596 816 Estimate
1.7 1.9 1.5
2.1 1.8 1.6 1.9
0.7 1.1 1 1.9 1.9 0.8 1.2 (denom'r) 2733 1709 1024 Estimate
3.1 4.3 1.8 5 6.5 3.3
2.9 4.1 1.7
(denom'r) 2044 1193 851 Estimate
5.2 5.1 5.4
8.2 10.3 5.9 5 4.6 5.4
1.8 1.7 2.7 6 10.4 5.5 (denom'r) 1631 920 711 Estimate
8.9 9.5 8.1
8.1 11.4 4.7
8.9 9.4 8.3
2.5 2.3 0 6.4 5.6 4.7 (denom'r) 1160 672 488 Estimate
9.1 12.2 5.6 8 9.2 9.1 12.3 5.6
1.4 0 6.6 8.1 2.8 6.6 9.7 2.6 4.2 2.8 (denom'r) 723 412 311 116 71 45 607 341 266 Estimate 12.8
Economic Cost of Arthritis in New
TABLE A-4: NZ PREVALENCE, ‘OTHER' ARTHRITIS, BY AGE, GENDER & RACE, 2002-03
All Female Male All Female Male All Female Male
ALL Estimate
1.5 3.2 2.4
0.8 4.2 2.3
15-24 Estimate
Estimate
(denom'r) 2412 1596 816 995 35-44 Estimate
1.2 2.4 2.3
(denom'r) 2733 1709 1024 961 610 351 1772 1099 673 45-54 Estimate
1.1 4.1 6.5
(denom'r) 2044 1193 851 680 55-64 Estimate
3.4 3.8 2.6
65-74 Estimate
3.2 11.1 12.6
3.5 21.6 6.5
Estimate
85+ Estimate
(denom'r) 164 117 47 7 Economic Cost of Arthritis in New
APPENDIX B– NZHS QUESTIONS
FIGURE B-1: SURVEY QUESTIONS FROM THE NZHS
Economic Cost of Arthritis in New
APPENDIX C – RNZCGPRU PHARMACEUTICAL AND
PATHOLOGY DATA
Table C-1 presents the number of prescriptions and average daily dose for arthritis consultations and the corresponding number of prescriptions and average daily dose of these drugs in the general population, from the RNZCGPRU data purchase. Table C-2 presents the number of laboratory referrals for arthritis consultations and the corresponding number of referrals for these tests in the general population. TABLE C-1: PRESCRIPTIONS, ARTHRITIS CONSULTATIONS VS TOTAL POPULATION
Average daily dose
Drug name
Arthritis
Arthritis
(N-n) Arthritis
11 535 0.27 0.17 21 1791 0.51 0.58 Amiloride with Hydrochlorothiazide 66 2234 1.61 0.72 15 1662 0.37 0.54 83 7994 2.03 2.58 21 2917 0.51 0.94 15 2263 0.37 0.73 18 3229 0.44 1.04 40 4692 0.98 1.52 14 1474 0.34 0.48 13 1535 0.32 0.50 18 3506 0.44 1.13 28 447 0.68 0.14 61 1458 1.49 0.47 Lactate-Gluconate 3 2012 0.07 0.65 87 769 2.13 0.25 15 887 0.37 0.29 5 1313 0.12 0.42 5 2839 0.12 0.92 chlordiazepoxide Economic Cost of Arthritis in New
Average daily dose
Drug name
Arthritis
Arthritis
(N-n) Arthritis (N-n)
Chlorpheniramine 1 1849 0.02 0.60 Ciclopiroxolamine 54 6994 1.32 2.26 11 1469 0.27 0.47 13 691 0.32 0.22 6 1192 0.15 0.38 53 1312 1.29 0.42 10 446 0.24 0.14 6 2720 0.15 0.88 Cyclopenthiazide 11 453 0.27 0.15 7 1995 0.17 0.64 Dextropropoxyphene 141 3130 3.44 1.01 13 1192 0.32 0.38 4 1043 0.10 0.34 25 381 0.61 0.12 19 1896 0.46 0.61 Diphenoxylate Hydrochloride wp* 13 429 0.32 0.14 11 1472 0.27 0.48 10 4751 0.24 1.53 Emulsifying Ointment BP 2 3568 0.05 1.15 Ethinyloestradiol 11 1692 0.27 0.55 37 1049 0.90 0.34 36 323 0.88 0.10 28 3265 0.68 1.05 8 4592 0.20 1.48 *wp = with paracetamol Economic Cost of Arthritis in New
Average daily dose
Drug name
Arthritis
Arthritis
(N-n) Arthritis (N-n)
Fluocortolone Caproate with Fluocortolone Pivalate 11 2945 0.27 0.95 24 5978 0.59 1.93 56 833 1.37 0.27 29 3228 0.71 1.04 9 3838 0.22 1.24 5 1084 0.12 0.35 9 1693 0.22 0.55 52 9337 1.27 3.02 hydrogen peroxide Hydroxocobalamin hydroxychloroquine 123 4257 3.01 1.37 20 307 0.49 0.10 11 390 0.27 0.13 13 1723 0.32 0.56 14 1153 0.34 0.37 16 1002 0.39 0.32 8 3221 0.20 1.04 Medroxyprogesterone 23 246 0.56 0.08 12 2308 0.29 0.75 77 109 1.88 0.04 Methotrimeprazine 7 1884 0.17 0.61 24 4350 0.59 1.40 6 1233 0.15 0.40 Economic Cost of Arthritis in New
Average daily dose
Drug name
Arthritis
Arthritis
Arthritis
5 1111 0.12 0.36 19 445 0.46 0.14 Mucopolysaccharide Polysulphuric Acid 7 1394 0.17 0.45 122 2524 2.98 0.82 10 583 0.24 0.19 5 2106 0.12 0.68 10 810 0.24 0.26 19 826 0.46 0.27 156 7282 3.81 2.35 13 775 0.32 0.25 10 560 0.24 0.18 37 1753 0.90 0.57 Paracetamol with Codeine 0.99 3723mg + 60mg 10 2851 0.24 0.92 Phenoxymethylpenicillin 4 1445 0.10 0.47 3 1758 0.07 0.57 16 286 0.39 0.09 12 803 0.29 0.26 103 4654 2.52 1.50 Prochlorperazine 14 1811 0.34 0.58 3 1060 0.07 0.34 Economic Cost of Arthritis in New
Average daily dose
Drug name
Arthritis
Arthritis
(N-n) Arthritis
46 3890 1.12 1.26 13 816 0.32 0.26 19 1536 0.46 0.50 95 776 2.32 0.25 42 9558 1.03 3.09 65 7360 1.59 2.38 10 882 0.24 0.28 sulfamethoxazole Tar with Triethanolamine Lauryl Sulphate and Fluor 15 1230 0.37 0.40 67 709 1.64 0.23 4 1413 0.10 0.46 40 3500 0.98 1.13 10 473 0.24 0.15 44 948 1.08 0.31 80 877 1.95 0.28 15 706 0.37 0.23 4 2137 0.10 0.69 10 515 0.24 0.17 27 1193 0.66 0.39 14 1668 0.34 0.54 43 2822 1.05 0.91 Economic Cost of Arthritis in New
TABLE C-2: LABORATORY REFERRALS, ARTHRITIS CONSULTATIONS VS TOTAL POPULATION
Lab test type
Arthritis
Total (N-n)
% Arthritis
% Total (N-n)
absolute retic count Alanine Aminotransferase Albumin-to-Creatinine ratio alkaline phosphatase Alpha Fetoprotein Anti Nuclear Antibodies antibodies - adrenal gland antibody - parietal cell antibody - smooth muscle antibody test – RNP antibody test - salivary gland antibody test - SCL-70 antibody test - SM (anti smith) antibody test - SS-A/Ro antibody test - SS-B/La Antibody test - strep A antideoxyribonuclease B Anti-dsDNA antibodies Anti-Neutrophilic Cytoplasmic Antibody anti-neutrophillic cytoplasmic antibody Antinuclear Antibody Test Anti-Streptokinase 6 antithyroid peroxidase antibody arsenic – urine Aspartate Aminotransferase Complement Activity complete blood count C-Reactive Protein Cytomegalovirus 2 Endomysial Antibodies Eosinophil antibodies epstein-barr antibody Erythrocyte sedimentation rate extractable nuclear antigens Fecal Occult Blood Test fluoride glucose Economic Cost of Arthritis in New
Lab test type
Arthritis
Total (N-n)
% Arthritis
% Total (N-n)
Follicle-stimulating hormone Gamma-glutamyl transpeptidase Gastric Parietal Antibodies gliadin antibody glycosylated haemoglobin hepatitis B surface antigen Hepatitis C antibody Human leukocyte antigen Hypochromic cells Immunoglobulin 15 INR/Prothrombin 18 Lactate dehydrogenase Large Unstained Cells Last Menstrual Period liver function test Luteinizing hormone mean cel haemoglobin Mean corpuscular hemoglobin Mean corpuscular hemoglobin concentration Mean corpuscular volume mean platelet volume mitochondrial antibody Packed cell volume Parathyroid Hormone Prostate Specific Antigen red blood cells - normochromic Red cell distribution width Economic Cost of Arthritis in New
Lab test type
Arthritis
Total (N-n)
% Arthritis
% Total (N-n)
Reticulocyte Count Rheumatoid Factor Saturated I.C.P. specific gravity Thyroglobulin antibody thyroid-stimulating hormone Total iron-binding capacity Triiodothyronine 19 Source: RNZCGPRU. Economic Cost of Arthritis in New
APPENDIX D – HEALTH DATA SURVEYS
Arthritis New Zealand supplied contact details for the supplementary health survey data, with the task of ensuring adequate representation in terms of demographic and regional characteristics, as outlined below. Outpatient and imaging services, from the 21 District Health Boards
Ž
Central Auckland Gisborne/Tairawhiti Nelson Marlborough North Shore, Rodney and Waitakere South Canterbury Aged care facilities – these were selected randomly from an internet search
using google.nz, yellowpages.co.nz and the NZS business search (names of
facilities are not reported for privacy reasons).
Specialists – the New Zealand Rheumatology Association Executive comprised
the necessary 10 rheumatologists surveyed, being gender mixed, public and
private and geographically diverse. The New Zealand Orthopaedic Association
provided contact details for 14 other specialist members.
Allied health – 22 physiotherapists were randomly selected from the NZ Society
of Physiotherapists website, together with 6 occupational therapists from the NZ
Association of Occupational Therapists.
Surveys were designed with professional assistance from Dangar Research. The final survey forms follow (reverse pages are very similar so are not repeated). Surveys were emailed with a fortnight turnaround requested. Responses are summarised in the main body of the text relating to each costing. Economic Cost of Arthritis in New
Arthritis New Zealand Survey of Outpatient Services 2005
Definitions: Arthritis includes the conditions listed on the next page.
THIS SURVEY EXCLUDES HOSPITAL INPATIENT SERVICES.
If you have any concerns or questions about this survey or how to fill out responses to
certain questions, please contact Lynne Pezzullo or Annette Lancy: 61-2-6273 1222

Question 1
What outpatient services do you provide for people with arthritis?
Please tick as many as apply.
1 specialist medical services
2
3 occupational therapy 4 5 other, please specify

FOR THE SPECIALIST MEDICAL SERVICES
Question 2
In the most recent year, how many hours would you estimate that your specialists have
provided services to people with arthritis who were NOT inpatients, to treat their arthritis?
non-inpatient hours per year
Question 3
What do you estimate is the average cost per hour of your specialist services?
Please provide for the most recent period available:
Specialist medical consultations: share paid by the patient or private health insurance fund _% share paid by other funding sources? _%
FOR THE OTHER (ALLIED HEALTH) SERVICES
Question 4
In the most recent year, how many hours would you estimate that your allied health
workers have provided services to people with arthritis who were NOT inpatients, to treat
their arthritis?
non-inpatient hours per year
Question 5
What do you estimate is the average cost per hour of your allied health services?
Please provide for the most recent period available:
Al ied health services: share paid by the patient or private health insurance fund _% share paid by other funding sources? _%
Questions 6
How many beds are there in your facility?
Please exclude closed beds.
Economic Cost of Arthritis in New
Arthritic conditions included in this survey, by International Classification of Disease
(Tenth Revision) category

M00 Pyogenic
Direct infections of joint in infectious and parasitic diseases classified elsewhere Postinfective and reactive arthropathies in diseases classified elsewhere M05 Seropositive Other rheumatoid arthritis Psoriatic and enteropathic arthropathies Juvenile arthritis in diseases classified elsewhere M10 Gout M11 Other Arthropathies in other diseases classified elsewhere M15 Polyarthrosis M16 Coxarthrosis [arthrosis of hip] Gonarthrosis [arthrosis of knee] Arthrosis of first carpometacarpal joint Polyarteritis nodosa and related conditions Other necrotizing vasculopathies M32 Systemic lupus erythemastosus M34 Systemic M35.0 Sicca syndrome M35.1 Other overlap syndromes M35.3 Polymyalgia rheumatica M45 Ankylosing M47 Spondylosis M48.0 Spinal stenosis M48.1 Ankylosing hyperostosis [Forestier] M49 Spondylopathies in diseases classified elsewhere Disorders of synovium and tendon in diseases classified elsewhere M70.0 Crepitant synovitis (acute) (chronic) of hand and wrist M71.2 Synovial cyst of popliteal space [Baker] M75.0 Adhesive capsulitis of shoulder M76 Enthesopathies, lower limb, excluding foot M77.2 Periarthritis of wrist
M77.3 Calcaneal spur
M77.5 Other enthesopathy of foot
M77.8 Other enthesopathies, not elsewhere classified
M77.9 Enthesopathy, unspecified

Many thanks for taking the time to complete this confidential survey.
Survey conducted by Access Economics Pty Ltd on behalf of Arthritis New Zealand.
Please return this survey either:
By email to: [email protected]
OR by fax to:
61-2-6273 1223
OR by post to:
Lynne Pezzullo, Senior Economist, Access Economics
PO Box 6248 Kingston ACT 2604 AUSTRALIA
Economic Cost of Arthritis in New
Arthritis New Zealand Survey of Diagnostic Imaging Services
2005
Definitions: Arthritis includes the conditions listed on the next page.
If you have any concerns or questions about this survey or how to fill out responses to
certain questions, please contact Lynne Pezzullo or Annette Lancy: 61-2-6273 1222

Question 1
In the most recent year, how many hours would you estimate that you have provided
diagnostic imaging services to people with arthritis, in relation to their arthritis?

Question 2
What do you estimate is the average cost per hour of your diagnostic imaging services?
Please provide for the most recent period available:
Diagnostic imaging: $ _per hour share paid by the patient or private health insurance fund _% share paid by other funding sources? _%

Many thanks for taking the time to complete this confidential survey.
Survey conducted by Access Economics Pty Ltd on behalf of Arthritis New Zealand.
Please return this survey either:
By email to: [email protected]
OR by fax to:
61-2-6273 1223
OR by post to:
Lynne Pezzullo, Senior Economist, Access Economics
PO Box 6248 Kingston ACT 2604 AUSTRALIA
Economic Cost of Arthritis in New
Arthritis New Zealand Survey of Aged Care Facilities 2005
Definitions: Arthritis includes the conditions listed on the next page.
THIS SURVEY EXCLUDES HOSPITAL INPATIENT OR OUTPATIENT SERVICES.
If you have any concerns or questions about this survey or how to fill out responses to
certain questions, please contact Lynne Pezzullo or Annette Lancy: 61-2-6273 1222

Question 1
In the most recent year, what proportion of your facility's residents do you estimate are in
care PRIMARILY because of their arthritis?
%

Question 2
In the most recent year, what proportion of your facility's residents do you estimate who
HAVE arthritis, although they may be in care primarily for other reasons?
%

Question 3
What are the total annual costs of your facility? Note: Costs would equate to the total
expenditure or total income side of the balance sheet, whichever is larger.
Please provide for the most recent period available:
Aged care services: $ _per annum share paid by the patient or private health insurance fund _% share paid by other funding sources? _%
Question 4
How many beds are there in your facility?
Please exclude closed beds.
beds
Many thanks for taking the time to complete this confidential survey.
Please return this survey either:
By email to: [email protected]
OR by fax to:
61-2-6273 1223
OR by post to:
Lynne Pezzullo, Senior Economist, Access Economics
PO Box 6248 Kingston ACT 2604 AUSTRALIA
Economic Cost of Arthritis in New
Arthritis New Zealand Survey of Arthritis Specialist Services
2005
Definitions: Arthritis includes the conditions listed on the next page.
THIS SURVEY EXCLUDES HOSPITAL INPATIENT OR OUTPATIENT SERVICES.
If you have any concerns or questions about this survey or how to fill out responses to
certain questions, please contact Lynne Pezzullo or Annette Lancy: 61-2-6273 1222


Question 1
What is your specialty?
Please tick as many as apply.
1 rheumatology
2 orthopaedic surgery
3 other, please specify
Question 2
In the most recent year, how many hours would you estimate that you have provided
specialist services to people with arthritis, to treat their arthritis, NOT through a hospital
inpatient or outpatient service?
non-hospital hours per year
Question 3
What do you estimate is the average cost per hour of your specialist services? Note: Cost
would equate to the price charged in private practice or to hourly salary (including on-costs such
as superannuation) in other care settings.
Please provide for the most recent period available:
specialist medical consultations: share paid by the patient or private health insurance fund _% share paid by other funding sources? _%
Many thanks for taking the time to complete this confidential survey.
Please return this survey either:
By email to: [email protected]
OR by fax to:
61-2-6273 1223
OR by post to:
Lynne Pezzullo, Senior Economist, Access Economics
PO Box 6248 Kingston ACT 2604 AUSTRALIA

Economic Cost of Arthritis in New
Arthritis New Zealand Survey of Allied Health Services 2005
Definitions: Arthritis includes the conditions listed on the next page.
THIS SURVEY EXCLUDES HOSPITAL INPATIENT OR OUTPATIENT SERVICES.
If you have any concerns or questions about this survey or how to fill out responses to
certain questions, please contact Lynne Pezzullo or Annette Lancy: 61-2-6273 1222


Question 1
What is your specialty?
Please tick as many as apply.
1 physiotherapy
2 occupational therapy
3 other, please specify
Question 2
In the most recent year, how many hours would you estimate that you have provided
services to people with arthritis, to treat their arthritis, NOT through a hospital inpatient or
outpatient service?
non-hospital hours per year
Question 3
What do you estimate is the average cost per hour of your services? Note: Cost would
equate to the price charged in private practice or to hourly salary (including on-costs such as
superannuation) in other care settings.
Please provide for the most recent period available:
Al ied health services: share paid by the patient or private health insurance fund _% share paid by other funding sources? _%
Many thanks for taking the time to complete this confidential survey.
Please return this survey either:
By email to: [email protected]
OR by fax to:
61-2-6273 1223
OR by post to:
Lynne Pezzullo, Senior Economist, Access Economics
PO Box 6248 Kingston ACT 2604 AUSTRALIA

Source: http://www.ppge.ufrgs.br/giacomo/arquivos/eco02072/arthritis-2005.pdf