DEPARTMENT OF ECONOMICS Uppsala University Master Thesis Author: Jessica Höjvall Supervisor: Patrik Hesselius Spring 2006

A COST-OF-ILLNESS STUDY of skin, soft tissue, bone and lung infections caused by Staphylococci

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Abstract

The essay investigates the economic burden of skin, soft tissue, bone and lung infections in

Sweden 2003. The cost-of-illness method, based on the human capital theory, is used in the

estimation. A prevalence approach and a top-down method were chosen for direct as well as

indirect costs. Also there is a discussion concerning health economic aspects of antibiotic

resistance and evidence of the increasing costs because of it. The lack of data leads to a result

within a large interval of uncertainty; the direct costs are estimated to 1 072 million SEK and

indirect costs are estimated to 4 655 million SEK.

Key words: Cost-of-illness, Staphalycocci infections, ICD-10, antibiotic resistance

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LIST OF CONTENTS

1 Introduction.........................................................................................4

2 Infections ............................................................................................5 2.1 About Staphylococci and the infections they cause .......................................................7 2.2 Antibiotic resistance .....................................................................................................8

3 Cost-of-illness.....................................................................................9 3.1 Incidence and prevalence ............................................................................................10 3.2 Top-down and bottom-up............................................................................................10 3.3 Direct and indirect costs..............................................................................................10

4 Data and methods of calculation ......................................................14 4.1 Direct costs .................................................................................................................14 4.2 Indirect costs...............................................................................................................16

5 Results...............................................................................................19

6 Conclusions.......................................................................................22

References

Appendix Data and calculations

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1 Introduction

Health economics has gained a greater importance as a discipline within economics and health

care. As the economic conditions for health care have changed, the need for economic

evaluations has increased. During the 60’s and 70’s Sweden experienced a constant growth

and had good public finances. The changed situation in the 90’s, in the form of low growth

and deficit of public finances, in combination with more expensive treatment methods has

increased the importance for the health care to economize the scarce resources.

In October 2002 a new central government authority was founded, the Pharmaceutical

Benefits Board (PBB). The authority strives to attain a cost-effective use of pharmaceuticals,

it is responsible for deciding whether reimbursement status for a new drug should be granted

or not. Simoultanously as the new authority entered upon duty; new reimbursement rules for

reimbursement of pharmaceuticals were formulated. PBB was assigned to revise the

reimbursement status, which concerns about 2 000 pharmaceuticals. The range of

pharmaceuticals is divided into 49 therapeutic areas and the investigation is scheduled to be

finished in five years. The reimbursement decisions are among other things based on health

economic evaluations but PBB do not perform any calculations, the task lies upon the

applicating pharmaceutical company (Thord Redman, Coordinator at PBB).

AstraZeneca is one of the pharmaceutical companies for which products the cost-effictiveness

will be evaluated. The essay is written upon request of the company and the objective of the

study is to estimate total costs associated with skin, soft tissue, bone and lung infections in

Sweden 2003. Delimitation is made to only look into the diagnoses which can be caused by

the bacteria Staphylococci. The contacts at AstraZeneca are Thomas Paulsson and Göran

Karlsson, both Health Economists. The reason why the essay investigates infectious diseases

is that no previous Swedish study exists and also because the reimbursement status for drugs

against infections are yet to be evaluated by PBB. Further, there is an important economic

aspect concerning infectious diseases caused by bacterias. Namely, the growing problem

concerning antibiotic resistance, which there will be a further discussion about in the essay.

A cost-of-illness study is an economic analysis over illness. The purpose for estimating the

societal costs that a certain disease causes is to shed light on the gain that could be attained in

the society if the disease decreases or ceases. Björn Lindgren (1981, p 23-24) is furthermore

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of the opinion that intertemporal and international comparisons are other objects for cost-of-

illness studies.

A number of cost-of-illness studies concerning different illnesses have been carried out in

Sweden. For example serie of studies areaccomplished at the Center for Medical Technology

Assessment (CMT) at Linköping University, amongst others CMT Report 2000:2 about heart

diseases and CMT Report 2003:5 about rheumatic diseases, or Henriksson and Jönsson’s

(1998) study about multiple sclerosis. A broad cost-of-illness study over all the illnesses in

Sweden was made by Jacobson and Lindgren (1996), which have been useful to this essay

concerning the methodology. No Swedish or international cost-of-illness studies that

investigate any of these infections have been found, consequently there is no comparable

support for the result.

To ensure the quality of the economic evaluations and also increase the possibility to compare

them, PBB has released “General guidelines for economic evaluations”. Relevant parts of

these guidelines will be adherent to.

2 Infections

This chapter presents an outline of the groups of infections that form the foundation for the

cost calculations. As accounted for earlier, it is skin, soft tissue, bone and lung infections

caused by Stapylococci that are investigated.

Britt-Marie Eriksson, Head Physician at the Department of Infectious Diseases at Uppsala

University Hospital, has assisted with expertise for identifying the relevant codes for the

various diagnoses. The ICD-10 system is used throughout the essay; which is an international

classification system of diseases that is managed by the World Health Organization (WHO)1.

The ICD-10 codes which will be included in the study are presented in Table 1 below. It

should be noted that some of the diagnoses may be caused by another bacteria than

Staphylococci. The adequacy of the identified codes for the types of infections has then been

confirmed by Carl Granert, Head Physician at the infection clinic at Karolinska University

Hospital.

1 The number ten stand for the fact that the system has been revised ten times.

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Table 1 The ICD-10 diagnoses for which the costs will be calculated A41.0 Septicaemia due to Stapylococcus aureus A41.1 Septicaemia due to other specified staphylococcus A41.2 Septicaemia due to unspecified staphylococcus A48.3 Toxic shock syndrome A49.0 Staphylococcal infection, unspecified G06 Intracranial and intraspinal abscess and granuloma H00.0 Hordeolum and other deep inflammation of eyelid H60.0 Abscess of external ear H60.1 Cellulitis of external ear H61.0 Perichondritis of external ear H62.0 Otitis externa in bacterial diseases classified elsewhere H75.0 Mastoiditis in infectious and parasitic diseases classified elsewhere J34.0 Abscess, furuncle and carbuncle of nose J85.1 Abscess of lung with pneumonia J85.2 Abscess of lung without pneumonia L00 Staphylococcal scalded skin syndrome L01 Impetigo L02 Cutaneous abscess, furuncle and carbuncle L03 Cellulitis L04 Acute lymphadenitis L05 Pilonidal cyst L08 Other local infections of skin and subcutaneous tissue M00 Pyogenic arthritis M49.3 Spondylopathy in other infectious and parasitic diseases classified elsewhere M60.0 Infective myositis M71 Other bursopathies M86 Osteomyelitis N76.4 Abscess of vulva O86.0 Infection of obstetric surgical wound O91.0 Infection of nipple associated with childbirth O91.1 Abscess of breast associated with childbirth O91.2 Nonpurulent mastitis associated with childbirth

In estimating the cost-of-illness problems may arise concerning delimitation of the

consequences of the disease. The presence of multiple diagnoses composes the primary

problem. To avoid double counting; the principal diagnosis is proceeded from. A consequence

of this is that cases of postoperative infections that have been diagnosed as secondary

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diagnosis will not be included in the estimation. This proportion is, however, unknown.

Postoperative complications are relatively unusual; according to Britt-Marie Eriksson

infections arise in about three percent of the operations. They are nevertheless associated with

large costs.

2.1 About Staphylococci and the infections they cause

Most people, above all medical personnel, injecting drug addicts and diabetics, are at intervals

carriers of stapylococci, in most cases in the nose but also at other mucous membranes and on

the skin (www.smittskyddsinstitutet.se). Since Staphylococci are bacteria, all of the diagnoses

can be treated with penicillin and related antibiotics. The duration of the penicillin treatment

depends on the type of infection. For these infections the variation is large, from ten days up

until lifelong treatment (Britt-Marie Eriksson). Sometimes allergies occur in the penicillin

treatment, costs associated with allergy will only be considered in the form of more

expensive drugs.

According to STRAMA (Swedish Strategic Programme for The Rational Use of

Antimicrobial Agents) skin and soft tissue infections are the second most common type of

infections in outpatient care. Examples of skin and soft tissue infections are impetigo and

boils in the skin. In additions to treatment with antibiotics, surgery could be needed to lance

boils that have to be drained.

Bone infections usually require long treatment. Osteomyelitis implies infection in bone tissue

and treatment with antibiotics is given during 6-12 months. In certain cases surgery has to be

applied and sometimes amputation is necessary. Arthritis is an infection that is usually caused

by Staphylococci but can also arise from surgical operations, since the joint is particularly

sensitive to infections. Early treatment with antibiotics along with flushing the joint to remove

pus is very important (Ericson & Ericson, 2002, p 101-102).

The only Staphylococci related diagnosis that is associated with the lungs is abscess of lung,

which is a rather unusual complication to pneumonia according to the Swedish Union of

Specialists in infectious diseases (2004). A treatment with antibiotics is given during at least

three weeks.

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2.2 Antibiotic resistance

During the 1940’s the first penicillins were introduced. The possibilities seemed endless since

a remedy for among other pneumonia and wound infections was found. These infections had

earlier posed a lethal threat. At that point all the Staphylococci bacteria were sensitive to

penicillin and it was much used. This is the underlying cause to why Staphylococci started

developing resistance to penicillin during the 60’s and 70’s. Once again these bacteria were

difficult to treat and “hospital infections” affected personnel.

After an intense research in the beginning of the 70’s, beta-lactamase resistant penicillins ( so-

called staphylococci penicillin) were released. These are now frequently used since almost all

Staphylococci produce beta-lactamase. However, the Staphylococci continued developing

new resistances. During the 80’s, Methicillin Resistant Staphylococcus Aureus (MRSA)

appeared. Infections caused by MRSA are above all spread inside and between care

institutions and have quickly become the most outstanding hygiene problem in health care all

over the world. In the year 2000 MRSA infections became mandatory to report to The

Swedish Institute for Infectious Disease Control (SMI). The same year 327 cases of MRSA

infected patients in Sweden were reported, the corresponding number in 1996 was 60 (Ericson

& Ericson, 2002, p 38-39, 200).

It is hard to overestimate the medical importance of antibiotics. The possibility to control

bacterial infections with drugs implies a health standard that we have come to regard as given.

A growing public health problem has arisen following antibiotic resistance since it impairs the

possibilities of an effective treatment of bacterial diseases. It entails large costs for the health

care system in the form of resistance testing, isolated patients, increasing resources for

hygienic health care, prolonged health care duration and more expensive drugs.

In December 2005 the Swedish Government handed over the proposition ”Strategy for a co-

ordinated work against antibiotic resistance and health care related diseases” to the

Parliament. In the proposition, alterations of laws are proposed, for example that the

insistence on a good hygienic standard is clearly expressed in the health care law.

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3 Cost-of-illness

This part describes the theoretical basis of the essay, namely the cost-of-illness method. The

essential in the analysis, just like in other economic theory, is that the resources are limited.

The value of what the individual or the society miss out on is the actual cost to satisfy the

need, the so-called opportunity cost (Pindyck & Rubinfeld, 2000 p 204). If nothing other is

stated, the costs are presented in the prices of 2003. Observed market prices for goods,

services and wages are used in the calculations. Market prices are however only

approximations of the true opportunity costs. According to Jacobson & Lindgren (1996, p 16),

the market prices reflect the opportunity costs only if certain conditions are fulfilled. For

example all markets have to be in the state of equilibrium and have enough concurrence;

external effects in the production nor consumption cannot exist. If the conditions are not met,

for example because of a large profit marginal for some products, adjustments have to be

made. Drummond & McGuire (2001, p 78) advocate an application of so-called cost-to-

charge ratios that indicate how the price should be deflated to better reflect the opportunity

costs. This has been applied in American studies but since it does not seem to be an

established practice in Sweden, no such adjustments are made in this paper.

According to PBB’s guidelines the economic evaluation should have a societal perspective.

By that means that all costs should be included, no matter who pays for them. It is however

unusual that economic evaluations succeed to include precisely all costs since many of them

are hard to measure.

Furthermore, there are three choices concerning the method of the cost-of-illness study; i) if

the study should be based on the incidence or prevalence of the disease; ii) if a top-down or

bottom-up approach should be applied; and iii) how direct and indirect costs should be

defined and measured (Lindgren, 1981).

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3.1 Incidence and prevalence

A study with an incidence approach is defined as the number of new cases of a disease during

a given time period. Future costs and productivity losses are calculated as present values. To

use the incidence approach it is required that the future development of the disease is known.

The advantage with this approach is that it emphasizes changes of the occurrence of the

disease. By measuring the difference in the number of people falling ill in a certain disease

between two years, the effect of the prevention can be measured as the number of cases that

have been avoided. It is therefore often used when the effects of preventive measures are

studied.

As the incidence approach requires knowledge of the development of the disease it is not

appropriete to use it in this essay. The incidence approach is too complex for the given time

period of this essay. Therefore, the prevalence approach is applied. All the cases of illness in a

given time period are comprised, including prevention, treatment and rehabilitation. Even

losses as a consequence of morbidity and mortality that arise during the time period of interest

are included. An advantage with a cost-of-illness study based upon prevalence is the

possibility to relate to total health care expenditures.

3.2 Top-down and bottom-up

Top-down implies that data over consumption of resources are collected from different public

registries, while bottom-up means collecting primary data directly from patients, for example

using questionnaires. It is also possible with a combination of both. This essay uses the top-

down method, which demands reliable data and where incorrect diagnoses could possibly

result in uncertain estimations.

3.3 Direct and indirect costs

In economic evaluations three different types of costs are usually mentioned; direct, indirect

and intangible. The essay only includes direct and indirect costs; they are further explained

below. The intangible costs, which are associated with for example pain, anxiety and

suffering, are neglected because of the difficulty to measure them.

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The direct costs as a consequence of illness are composed of the value of the other goods and

services that could have been produced if the resources had not been used for health care.

According to this opportunity cost reasoning the direct costs are measured in terms of the

resources that are required to prevent, diagnose and treat the diseases. Since there are

limitations of what can be identified and measured, most of the studies concentrate on costs

for drugs, inpatient and outpatient care. Transport costs to and from the medical service and

waiting time are also regarded as direct costs but are often neglected in cost-of-illness studies

since they may be hard to measure. One Swedish study that includes these costs has been

found; Magnus Johannesson’s dissertation on costs in hypertension treatment (1991). There, a

bottom-up approach is applied, whereas the patient’s waiting time and distance between home

and care institutions are known, which facilitates those cost estimations. This essay has no

access to individual data and a prospective estimation would be too deceptive; these costs are

therefore disregarded in this essay.

In Figure 1, direct costs are described by means of a production possibility curve. If no

resources are used for health care; T units of other consumption are obtained, and vice versa.

Health care involves in this case all the goods and services that exist as a result of illnesses

and accidents. Preventing efforts such as safety belts, lifebuoys etc are also included. All

combinations along and under the production possibility curve are possible. It should be noted

that the area under the curve means inefficiency; with the same resources more health care as

well as other consumption can be produced. In a society where the resources are distributed

according to point A; S units of health care and K units of other consumption can be attained.

The direct cost for all the diseases corresponds to the difference between T and K. The direct

cost for one disease is illustrated as the difference between L and T (Jacobson & Lindgren,

1996, p 13-14).

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Figure 1 Direct costs in an economic cost analysis

Source: Jacobsson and Lindgren, "Vad kostar sjukdomarna?", 1996

When people’s working capacity decreases as a consequence of illness, indirect costs arise.

With the assumption about full employment the society gets a production loss, that is; a

difference on what is produced and what could be produced if everybody were healthy. Cost

calculations concerning productivity loss should, according to PBB, be based on the human

capital method, which implies a calculation of interest to the present value of the individuals

expected work contribution. The method has been criticized since it does not consider the

economic contribution of children and old people in the calculation of the production loss

(SBU, 2000).

Jacobson and Lindgren (1996, p 15) separate production loss as a consequence of 1)

temporary illness, 2) permanent illness or handicap and 3) mortality. Temporary illness

comprehends shorter periods during which illness lowers the working capacity completely or

partially. Permanent illness or handicap refers to situations when the illness lowers the

working capacity completely or partially for the rest of the person’s active life.

Whether the production loss because of premature death should be included or not is a matter

of opinion. In PBB’s guidelines only production loss as a result of treatment and illness is

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pointed out. Johannesson and Meltzer (1998) recommended an inclusion of costs or benefits

that arise during the extra years an individual live because of interventions. That should be

equivalent to the difference between total consumption and total production during the extra

years of life; the method has been supported by PBB. As in the human capital method the

production is only determined by gainful employment, which means that individuals younger

than the retirement age lead to savings, while individuals older than 65 years result in extra

costs.

The calculation of the net production is beyond the scope of this essay, a presentation of the

production loss as a result of premature death will be made, however in brackets.

In figure 2 below, production possibility curves of the indirect costs are illustrated. Because

diseases exist, the consumption is limited by the curve TT´. If there were no diseases; the

production capacity would have been bigger and the production possibility curve would then

move further away from the point of origin. The indirect cost as a consequence of illness is

measured as the difference between P and T for all the diseases, U and T for one single

disease.

Figure 2 Indirect costs in an economic cost analysis

Source: Jacobsson and Lindgren, "Vad kostar sjukdomarna?", 1996

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To sum up, Table 2 presents and incorporates the costs which are included in the essay.

Table 2 Classification of costs associated with skin, soft tissue, bone and lung infections caused by Staphylococci. Direct costs Indirect costs

Outpatient care

Inpatient care

Pharmaceuticals

Temporary illness

Permanent illness or handicap

Premature death

4 Data and methods of calculation

A quantitative methodology is used and calculations are based on public statistics. Despite the

fact that a considerable amount of statistics are collected within the Swedish health care

system it is insufficient in some parts. The principal problems concern outpatient care and

absence from work due to illness, where a number of assumptions have been necessary for the

estimation of costs. Furthermore, available data is sometimes not detailed enough to calculate

the total societal cost for the infections with certainty. All the costs are displayed in the prices

of 2003.

4.1 Direct costs

Statistics over outpatient care at hospitals and in primary health care is incomplete since there

are no demands on diagnosis registration. Skåne region has a relatively well developed system

for collection of statistics that are followed up regularly. By Thor Lithman and Dennis Noreen

at Skåne region I have received information about the number of medical visits in the region’s

outpatient care for each ICD-10 code. All of the care institutions are included and the

proportion private care is about 36 %. Some of the visits are not coded until the last level2,

these have been distributed according to the proportion within each group. For some of the

diagnoses the average cost is calculated for only a few cases which probably make some

estimations uncertain.

2 E.g: H00- instead of H00.1 or H00.2

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In the outpatient care in Skåne region, 15 900 persons were treated for any of the infections

above in 2003, to a total cost of 22,6 million SEK. Since there exists a lack of information

regarding outpatient care for the rest of Sweden, the numbers for Skåne region are applied to

Sweden in a calculation over the costs for the whole country. That is, it is assumed that the

frequency distribution of infections in Skåne corresponds to that in the rest of Sweden. Age

seems to be an important factor in the risk of getting infected; the majority of the infected

people are of a higher age. After having compared the demographies of Skåne with the rest of

the country it can be concluded that they are equivalent, wherefore no adjustments are made.

For other factors that influence the infection frequency, for example the number of

pregnancies; it is assumed that the proportion in the whole country is represented by the one

in the region of Skåne.

In 2003 Skåne region covered about 13 % of the population in the whole country (Population

statistics, Statistics Sweden). Before the calculations are made for the whole country, the

numbers are adjusted to represent the whole Skåne County, also with the assumption that the

medical visits in private care have the same diagnosis distribution as in public outpatient care.

The number of days in inpatient care per diagnosis is collected from the register of the

National Board of Health and Welfare. The data for the cost per day in medical care for each

ICD-10 code has been received from Leif Andersson and Caj Erlö at the Swedish Association

of Local Authorities and Regions (SALAR). SALAR is in control of the CPP database3,

which contains calculations of costs for each medical contact with inpatient care. For 2003

these estimations were based on 15 hospitals with a total of 400 000 cases of institutional

care, corresponding to 30 % of the somatic inpatient care in Sweden (KPP-nytt, 2005). The

average cost and the number of days in medical care for each ICD-10 code are presented in

Appendix. Like outpatient care, the average cost for some of the diagnoses is only based on

relatively few cases, which make some cost estimates uncertain.

Information about pharmaceutical sales is taken from Apoteket’s report ”The Total Sales of

Human pharmaceuticals in outpatient care , self-care and inpatient care”. The drugs given to

patients in hospitals are included in the cost for inpatient care, wherefore that share should be

3 CPP = Cost Per Patient

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excluded in this part. Apoteket informs, in the report ”The Development of Pharmaceuticals

2003”, that 11 % of the sales of pharmaceuticals went to inpatient care. It is assumed that this

proportion is applicable to the groups of antibiotics relevant to this essay; 11 % of the total

sum within each ATC-group are removed..

According to PBB’s guidelines for health economic evaluations, Apoteket’s selling price

(AUP)4 is used as a measure of the drug cost. To relate the cost with the sold quantity; the

number of DDD is also presented. DDD is an abbreviation of ”Defined Daily Dose” and

implies the assumed average maintenance dose per day for a drug used for its main

indication in adults (WHO).

The classification of pharmaceuticals is based upon the ATC system. The pharmaceuticals are

divided according to field of application, infectious diseases are noted with the code J. To find

out which sub-groups that are relevant for the infections in this study; FASS, the homepages

of Örebro County Council and Internetmedicin are used. The ATC codes that form the basis

for the calculation of the pharmaceutical costs are presented in table 3 below.

Table 3 ATC groups that are included in the cost calculation J01C E Beta-lactamase sensitive penicillins J01C F Beta-lactamase resistant penicillins J01D B06 Cefazedone J01F A Macrolides J01F F Lincosamides J01X C01 Fusidic acid D06A X Other antibiotics for topical use One group from the ATC-grouping D, which stands for skin diseases, is included. The group

contains antibiotics in the form of cream.

4.2 Indirect costs

The National Social Insurance Board has information about sickness benefit that has been

disbursed for different diagnoses at temporary illness. Since the diagnoses investigated in this

essay are relatively low in frequency (less than 200 cases per diagnosis) the National Social

4 AUP is the sum of the couny council’s special price and the patients national insurance contribution

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Insurance Board does not release statistics because of the risk of exposing individuals (Staffan

Khan, The National Social Insurance Board).

To retrieve a foundation for the calculations a number of specialists in infectious diseases

were contacted and asked to estimate an average length of sick reporting for each diagnosis.

All of them were of the opinion that the task is almost impossible since it differs a lot from

case to case.

Riksförsäkringsverket (nowadays the National Social Insurance Board) has released the report

”RFV redovisar”, which report on the total average sickness benefit for different diagnoses.

The calculation is made upon cases where the sick leave exceeds 14 days. It does not account

for the average sick benefit for each ICD-10 code, but for the chapter each diagnosis lies

within; it is the superior grouping to the sub-groups A, B, C and so on. How the groups relate

to one another, as well as the calculation, is to be found in Appendix. The data used in the

calculation of the mean value of the sickness benefit is collected during 1999-2002. The

report does not tell which year’s prices that have been used. “RFV redovisar” presents the

total average sickness benefit per case for men as well as women. Since the sex distribution is

not known for the figures in outpatient care, the mean income is used in the cost calculation.

It is assumed that all the cases lead to a sick leave for at least 15 days and include all the cases

for the ages 0-64 years. Children are included, since one parent has the right to be absent from

work with pay to nurture a sick child until the child reaches the age of 12. The age distribution

is known for inpatient care but it is more problematical with outpatient care since those are

not age distributed. Therefore, the proportion in outpatient care that corresponds to the

proportion older than 65 years in inpatient care is not accounted for.

The diagnoses the essay deals with lead relatively seldom to permanent illness or handicap.

In most cases the infected person recovers after antibiotics treatment. For some cases however

the illness brings lifelong consequences. After consulting three specialists in infectious

diseases5 it can be established that, of the infections being investigated, bone infections carry

the longest sick leaves in general. That is confirmed by the newly granted sickness and

activity compensations in 2003, which has been received by Lena Ericson at the National

Social Insurance Board. The total number of newly granted compensations in 2003 is between 5 Britt-Marie Eriksson and Anders Lannergård, Head Physisians at Uppsala University Hospital, Ingegerd Hökeberg, Assistant Physisian in infectious diseases, Stockholm County Council.

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84-99. A more precise number can not be presented since the National Social Insurance Board

does not reveal the exact numbers for the diagnoses where the total number is less than three.

Therefore, only the number of certain cases are account for, namely 84 compensations. The

statistics does not contain a diagnosis distribution for the existence of sickness and activity

compensation, only for the newly granted each year.

Both types of compensation are reconsidered about once a year and it is therefore hard to get a

perception about the presence of early retirement pension. To be granted compensation it is

required that the working capacity is reduced with at least a quarter during at least one year.

All the consulted doctors find it very hard to estimate an average length of sick leave, but few

people get lifelong consequences. I choice is made to only calculate the productivity loss for

the following year, despite the fact that it leads to an underestimation. The granting is made in

the whole, ¾, ½ or ¼ sickness or activity compensation. Information about the distribution for

2005 has been received, an assumption that it corresponds to the distribution for 2003 and that

same proportions are relevant for these diagnoses is made. The distribution is presented in

Table 4, where the full time equivalent also has been calculated.

Table 4 Newly granted sickness and activity compensation in 2003 Whole compensation 49

3/4 compensation 3

½ compensation 23

1/4 compensation 9

Sum 84

Full time equivalent 65

The female share of the compensations is 54 %. The cost for the following year is calculated

from mean income, including social charges, in 2003 for women and men respectively.

Statistics of causes of death is published yearly by the National Board of Health and Welfare.

The studies show the number of deaths divided into gender, age and underlying diagnosis.

The indirect costs of premature death refer to patients who die before the age of 65 years. In

2003 the deaths caused by the studied diagnoses amount to 124, of which 12 persons were

between 16 and 64 years old. Only one person was under 16 years old.

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In accordance with Jacobson & Lindgren (1996, p 56-58) the average income for each age

group and gender is used to calculate the cost of premature death. The income has been

adjusted to be equivalent to 40 working hours per week, and therefore, domestic work has

been valued in the same way as paid work. Except for the income itself, costs for social

charges have been added, the reason is because profit maximizing companies will continue to

employ as long as the marginal employee will contribute to net profit. The income from work,

social charges included, will correspond to the value of the additional production. Anders

Ingelsson at the Swedish National Tax Board states that social charges amount to 45-50 %,

depending on collective agreement. PBB do not have any recommendations for a suitable

percentage. The percentage used in this study is 47 %. Also, it is assumed that full

employment exists; if no illness is present people are working. This rather strong assumption

is needed in order to use the concept of opportunity cost. To use the opportunity cost in an

empirical meaning, labour is considered as a limited resource. The potential loss of production

during 2003, due to premature death, depends not only on deaths but also on prior deaths

before 2003. However, in cost-of-illness studies it is not common to use estimates based on

deaths prior the year that is being examined. This study is following Jacobson and Lindgren’s

method (1996) and calculates therefore the production effects until the year of retirement. The

calculations are presented in table A4.1 and A4.2 in Appendix.

To consider people’s time preferences, since the incomes occur at different points in time,

future incomes are discounted. In compliance with PBB’s guidelines a discount rate of three

percent is presented in the results.

5 Results

The total costs for skin, soft tissue, bone and lung infections caused by Stapylococci in 2003

are presented in Table 5. Since the availability and quality of the data has varied can the total

costs I present only be considerate as approximations within a large interval of uncertainty.

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Table 5 Total costs in a top-down study of skin, soft tissue, bone and lung infections in Sweden 2003. Outpatient care

271 mkr (42 320 visits)

Inpatient care 457 mkr (69 493 days) Pharmaceuticals 306 mkr (24 500 230 DDD) Direct costs 1 034 milllion SEK

Temporary illness 4 596 mkr Permanent illness or handicap

22 mkr

Premature death 37 mkr Indirect costs 4 655 million SEK

Total costs 5 689 million SEK

The direct costs for skin, soft tissue, bone and lung infections amounts to 1 034 million SEK,

which corresponds to about 0,5 % of the total health care expenditures in 2003.6

The cost for medical visits in outpatient care runs to 271 million SEK. It is however necessary

to have in mind that the distribution of Skåne region might not be applicable on the whole

country. The access and quality of the information in outpatient care probably has to improve

to be a good basis for general statistics.

Inpatient care occupies around 40 % of the direct costs. The quality of the statistics in

inpatient care is considerably better than the statistics for outpatient care and the result is

therefore more reliable. But as have been mentioned earlier; the average cost is based on too

few cases for some of the diagnoses. Hence, there is a risk that extreme values have affected

the total cost; upwards as well as downwards.

To illustrate the increasing costs that arise because of antibiotic resistance, Table 6 is

presented. There it can be seen that beta-lactamase resistant penicillins, which are used when

Stapylococcus has developed resistency, is much more expensive. The cost for beta-lactamase

sensitive penicillins is about 8 SEK/DDD while the beta-lactamase resistant penicillins runs to

about 23 SEK/DDD, the more expensive pharmaceuticals involves a cost that is three times as

high.

6 The total expenditures for health care amounted in 2003 to 209 064 mkr, according to preliminary information from the report in 2004 of the National Board of Health and Welfare.

21

Table 6 The sales of pharmaceuticals in 2003. ATC code Denomination AUP excl VAT DDD

J01C E Beta-lactamase sensitive penicillins 103 539 349 12 483 481

J01C F Beta-lactamase resistant penicillins 95 169 373 4 103 736

J01D B06 Cefazedone 26 418 825 902 926

J01F A Macrolides 29 053 702 1 755 718

J01F F Lincosamides 37 813 450 883 326

J01X C01 Fusidic acid 3 920 836 70 803

D06A X Other antibiotics for topical use 9 863 915 1 605 215

Total 305 779 450 21 805 205 Source: Apoteket AB

The source for the numbers in Table 6 is Apoteket AB but it is important to remember that the

table presents the results after removing 11 % of the total sum for each group of

pharmaceuticals. The total cost of the pharmaceuticals above amounted to about 306 million

SEK in 2003. The cost can not however only be assigned to the types of infections in this

essay since several of the drugs can be used for other infections as well. Since the diagnosis,

for which the sold drugs are used, is not known the total sum is presented.

The indirect costs are dominated by temporary sick leaves. These are, however, probably

overestimated since the data for the outpatient care in Skåne region only presents the number

of medical visits, not the number of patients. For the inpatient care each individual is only

counted once but there is a risk of double counting if the person also has visited outpatient

care. Further, persons in the age of 12-15 years are included, they are not part of the labour

force nor have a parent who has the right to reimbursement for taking care of a sick child.

Also, the average sickness benefit is only calculated for the cases where the sick leave

exceeds 14 days. That overestimates the cost for the cases that last for a shorter time than 15

days.

The uncertainty about the duration of the newly granted sickness and activity compensations

implies that its cost is underestimated since the calculations are only based on the minimum

length, which is one year. Further, 84 compensations are included in the calculations although

a possible fall out exists.

22

Since the investigated infections only have caused a small number (12) of deaths for

individuals younger than 65 years; the present value for the mortality cost is relatively low

and does not affect the result to a larger extent. To investigate how the choice of discount rate

affects the result; a sensitivity analysis is displayed in Table 7 below.

Table 7: Sensitivity analysis with respect to the choice of discount rate. In million SEK. Discount rate, percent

0 % 3 % 5 %

Indirect cost of mortality

49,3 37,2 33,7

6 Conclusions

The essay’s question about the size of the cost for skin, soft tissue, bone and lung infections

does not have a simple answer. In this case it was estimated to about 5,7 billion SEK but the

result depends on the calculation method. A top-down approach has been used and it requires

amongst other reliable sources. The reliability is considered to be fulfilled but the data that

has been used has not always been detailed enough. The sources that have been used have had

different motives which none is in accordance with the object in this essay. After best ability

the relevant information has been sorted out and adjusted to the needs of the essay.

Furthermore the diagnosing of multiple illness conditions constitutes a data problem.

The definition of skin, soft tissue, bone and lung infections in the form of ICD codes has been

made by two specialists in infectious diseases at different hospitals. However it is necessary to

reflect over the fact that other physicians might have included or excluded codes, which of

course would lead to another result.

The result showed that the antibiotic resistance has a great impact on the cost of

pharmaceuticals. The effects of antibiotic resistance are important in medical as well as

economic terms. A worsened possibility to effective treatment of Stapylococci leads to an

increasing need for hospital care and also to an increased mortality, and this in turn involves

large costs.

23

Even if cost-of-illness studies have imperfections, they can increase the knowledge about the

economic consequences of different diseases. It would be interesting to compare the results

with a corresponding study where a bottom-up approach has been applied. The bottom-up

approach would probably lead to more correct estimations since for example the sickness

duration is known and calculations of costs for transport and waiting time can be made. The

lack of costs for transport and waiting time in this essay has meant that a large cost is missing.

Future studies of the cost for transports and waiting time are of a big value for cost-of-illness

studies.

VOCABULARY

abscess: varansamling. arthritis: ledgångsinflammation. bursopathies: sjukdom I slemsäck

carbuncle: varbildning i och under huden. cellulitis: inflammation i underhudens bindväv. cutaneous: som hör till huden. furuncle: varbildning i överhuden med en liten celldöd del. Liten furunkel = finne. granuloma: läkköttssvulst. hordeolum: vagel, inflammation eller retning i ögonhårens körtlar. impetigo: svinkoppor. incidence: antal personer som insjuknar i en sjukdom under en viss tidsperiod. inpatient care: sluten vård mastitis: inflammation i bröstkörteln. mastoiditis: inflammation i klippbenets vårtlika utskott bakom örat. myositis: muskelinflammation. osteomyelitis: benmärgsinflammation, inflammation i benröta. otitis: öroninflammation. outpatient care: öppen vård

perichondritis: inflammation i broskhinna. pneumonia: lunginflammation. prevalence: antal personer som har en sjukdom vid en bestämd tidpunkt. septicaimia: blodförgiftning somatic disease: en sjukdom som sitter i kroppen och inte i psyket. spondylopathy: ryggkotesjukdom. vulva: ytterdelarna av det kvinnliga könsorganet.

24

REFERENCES

Drummond, M och McGuire, A, (2001). Economic Evaluation in Health Care: merging theory with practice. Oxford University Press. Ericson, E och Ericson, T, (2002). Klinisk mikrobiologi. Liber AB. FASS 2003. Stockholm: Läkemedelsinformation AB.

Johannesson, M, (1991). Economic evaluation of hypertension treatment. Kanaltryckeriet Motala.

Lindgren, B. Cost of Illness 1964-1975, (1981). Lund Economic Studies. Malmö: Infotryck AB.

Pindyck, RS och Rubinfeld, DL, (2000). Microeconomics. Fifth edition. New Jersey: Prentice-Hall Inc. Stockholms läns landsting (STRAMA-gruppen), (2000). Hud- och mjukdelsinfektioner.

Published articles and reports

CMT Rapport 2000:2, Hjärtsjukdomars samhällskostnader, Linköpings universitet CMT Rapport 2003:5, Samhällsekonomiska kostnader för reumatiska sjukdomar, Linköpings universitet Henriksson, F och Jönsson, B. The Economic Cost of Multiple Sclerosis in Sweden in 1994. Pharmaeconomics 1998: May 13: 597-606

Jacobson, L och Lindgren, B. Vad kostar sjukdomarna? Socialstyrelsen. Stockholm, 1996 Johannesson, M och Meltzer, D. Some reflections on cost-effectiveness analysis. Health Econ. 1998: 7: 1-7

Regeringskansliet. Strategi mot antibiotikaresistens och vårdrelaterade sjukdomar, Faktablad Socialdepartementet, nr 27, 2005. SBU, Ont i magen – metoder för diagnos och behandling av dyspepsi, 2000, kap 15 Socialstyrelsen, Dödsorsaker 2003, p 76-132 Socialstyrelsen, (2004). Statistik över kostnader för hälso- och sjukvården 2003. Statistiska Centralbyrån (SCB), Folkmängden i riket den 1 november efter ålder och kön. År 2002-2005 Svenska infektionsläkarföreningen, Vårdprogram för samhällsförvärvad pneumoni 2004. Sveriges Kommuner och Landsting, (2005). KPP-nytt, nyhetsbrev nr 13.

25

Electronical sources Apoteket, Läkemedelsförsäljningen 2003 – försäljning Mkr http://www2.apoteket.se/om/VadViGor/Forsalj/Publicerad_statistik/default.htm 2006-05-20 Internetmedicin http://www.internetmedicin.se/download/megalathund.pdf 2006-05-20 Läkemedelsförmånsnämndens allmänna råd om ekonomiska utvärderingar 2003:2 http://www.lfn.se/LFNTemplates/Page____328.aspx 2006-04-19 Socialstyrelsen, länk till statistik från patientregistret http://www.socialstyrelsen.se/Statistik/statistik_amne/sluten_vard/Publicerat.htm 2006-05-20 Statistiska Centralbyrån, befolkningsstatistik http://www.scb.se/templates/Product____25785.asp 2006-05-20 World Health Organization (WHO) http://www.who.int/classifications/icd/en/ 2006-05-08 Örebro läns landsting http://www.orebroll.se/uso/page____9961.aspx 2006-05-20 Personal meeting Britt-Marie Eriksson, överläkare infektionskliniken, Akademiska sjukhuset, Uppsala. Thomas Paulsson, hälsoekonom, AstraZeneca, Södertälje.

Telephone interviews Thord Redman, samordnare LFN, Stockholm.

E-mail Leif Andersson, statistiker SKL, Stockholm. Lena Ericson, statistiker Försäkringskassan, Stockholm. Caj Erlö, statistiker SKL, Stockholm. Ingegerd Hökeberg, biträdande smittskyddsläkare Stockholms läns landsting. Anders Ingelsson, Skatteverket. Staffan Khan, statistiker Försäkringskassan, Stockholm. Anders Lannergård, överläkare infektionskliniken, Akademiska sjukhuset, Uppsala. Erik Liljegren, statistiker SCB, Örebro. Thor Lithman, Region Skåne, Dennis Noreen, statistiker Region Skåne,

26

APPENDIX Table A1 Application of Skåne regions statistics to Sweden, outpatient care 2003

Main diagnosis

Visits in Skåne region SEK/visit

Total cost Skåne region

Visits in total in Skåne (including private care)

Visits in total in Sweden

Total cost Sweden

A41.0 95 1081 102689 148 1142 1234244 A41.1 12 1024 12283 18,8 144,2 147634 A41.2 2 1477 2954 3,13 24,04 35510 A48.3 3 909,4 2728 4,69 36,06 32792 A49.0 24 1795 43076 37,5 288,5 517737 G06 66 2371 156485 103 793,3 1880826 H00 566 1237 700021 884 6803 8413712 H60.0 252 634,2 159814 394 3029 1920846 H60.1 18 548,7 9876 28,1 216,4 118707 H61.0 310 1246 386259 484 3726 4642540 H62.0 8 1268 10143 12,5 96,15 121911 H75.0 1 1910 1910 1,56 12,02 22955 J34.0 80 1236 98863 125 961,5 1188254 J85.1 5 762,5 3812 7,81 60,10 45822 J85.2 12 1112 13343 18,8 144,2 160370 L00 17 1170 19881 26,6 204,3 238954

L01 2762 1152 3180741 4316 33197 38230063

L02 3031 1535 4652474 4736 36430 55919157

L03 1642 1330 2184166 2566 19736 26251994

L04 673 1336 898844 1052 8089 10803416

L05 798 3124 2492856 1247 9591 29962210

L08 3521 1189 4186993 5502 42320 50324438

M00 793 1523 1207593 1239 9531 14514334

M49.3 1 1397 1397 1,56 12,02 16790 M60.0 37 1847 68341 57,8 444,7 821402 M71 287 2015 578329 448 3450 6951067 M86 458 1939 887930 716 5505 10672240 N76.4 119 1587 188802 186 1430 2269253 O860 50 1121 56057 78,1 601,0 673757 O910 23 1225 28184 35,9 276,4 338751 O911 80 904,3 72342 125 961,5 869493 O912 263 1065 280110 411 3161 3366712

27

SUM 15900

225713

70 191106 271290503

Table A2 Data over inpatient care 2003 Main diagnosis No of Days Cost per day Total (kSEK) A41.0 14 985 6 965 104 365 A41.1 3 010 14 056 42 309 A41.2 855 5 416 4 630 A48.3 45 5 294 238 A49.0 341 5 608 1 912 G06.0 2 381 9 093 21 650 G06.1 990 7 138 7 067 G06.2 509 8 849 4 504 H00.0 51 3 294 168 H60.0 116 6 768 785 H60.1 8 3 294 26 H61.0 110 4 789 527 H62.0 0 0 0 H75.0 0 0 0 J34.0 233 5 560 1 295 J85.1 1 123 5 417 6 083 J85.2 555 7 441 4 130 0 L00 380 6 761 2 569 L01 568 5 012 2 847 L020 349 5 027 1 754 L021 337 5 935 2 000 L022 1 786 6 094 10 883 L023 524 5 254 2 753 L024 3 910 5 622 21 981 L028 112 6 113 685 L029 1 561 5 338 8 333 L030 357 1 068 381 L031 1 349 5 599 7 553 L032 80 4 685 375 L033 314 5 211 1 636 L038 288 4 956 1 427 L039 2 018 5 316 10 727 L040 746 6 386 4 764 L041 10 6 523 65 L042 50 3 865 193 L043 33 4 180 138 L048 25 8 511 213 L049 139 7 297 1 014 L050 323 5 806 1 875 L059 446 6 693 2985 L08 4 960 5 148 25 532

28

M000 4 345 5 612 24 386 M001 180 4 857 874 M002 790 5 928 4 683 M008 662 6 116 4 049 M009 5 469 7 314 39 999 M600 682 6 514 4 443 M710 123 3 807 468 M711 199 3 988 794 M712 96 5 376 516 M713 29 11 350 329 M715 6 5 994 33 M719 74 5 451 403 M860 649 7 496 4 865 M861 1 801 6 461 11 636 M862 110 6 838 752 M863 44 8 248 363 M864 193 6 628 1 279 M865 61 4 359 266 M866 1 575 5 911 9 310 M869 4 785 5 496 26 297 N764 179 5 333 955 O860 267 6 456 1 724 O910 38 4 304 164 O911 869 5 858 5 090 O912 290 4 775 1 385 Total 69 493 457 437

Table A3.1 Productivity loss as a result of temporary illness, outpatient care 2003

Total sickness

benefit Number of cases

Chapter Group SEK/case

Outpatient

care

Total

(kSEK)

I Certain infectious and parasitic diseases A 19 950 650 12 968 VI-VIII Diseases of the nervous system and sense organs G, H 33 650 10 879 366 078 X Diseases of the respiratory system J 10 350 846 8 756 XII Diseases of the skin and subcutaneous tissue L 32 150 109 026 3 505 000 XIII Diseases of the musculoskeletal system and connective tissue M 41 500 10 130 420 395 XIV Diseases of the genitourinary system N 14 500 1 241 17 995 XV Pregnancy, childbirth and the puerperium O 22 200 5 000 111 001 4 442 000

29

Table A3.2 Productivity loss as a result of temporary illness, inpatient care 2003 Sickness benefit, SEK/case

Diagnoskapitel Group Women Men

I Certain infectious and parasitic diseases A 14 700 25 200 VI-VIII Diseases of the nervous system and sense organs G, H 29 000 38 300 X Diseases of the respiratory system J 9100 11 600 XII Diseases of the skin and subcutaneous tissue L 29 600 34 700 XIII Diseases of the musculoskeletal system and connective tissue M 37 000 46 000 XIV Diseases of the genitourinary system N 12 000 17 000 XV Pregnancy, childbirth and the puerperium O 22 200 0 No of cases, inpatient care Women Men Total(kSEK)

193 306 10 548 81 91 5 834 33 97 1 426 1112 1779 94 647 229 485 30 783 66 0 792 459 0 10 190 154 219

CALCULATION OF PRODUCTIVITY LOSS AS A RESULT OF PREMATURE DEATH Table A4.1 Example of table for "sum of present value of future expected incomesr" for a man in the age group 55-59 years, calculated with different discount rates. In thousand SEK.

Discount factor Tot. Disc. Income at disc. rate

Age P Y years

W kSEK

S kSEK 0% 3% 5% 0% 3% 5%

55-59 1 2,5 446,4 1116 1 0,964 0,941 1116 1076 1050

60-64 0,963 4,82 446,4 2152 1 0,863 0,784 2152 1857 1687

Sum 3268 3268 2933 2737

P = The probability that a person of 57 years lives until he turns 57 years (P = 1), until he reaches the age of 62 years (P = 0,963). Source: Swedish Statistics, "Population statistics part 3, 2003", table 4.13 "Life tables 2003". Y = Expected number of years the person will work in each age interval. In the first interval he will be working for 2,5 years in average. In the following intervals he works 5 years multiplied with the probability that he reached the middle age of the interval. W = Average total income from work for men in each age group, corrected for worked time and with social charges added (see the further calculation of W in table A4.2). S = The annual income, W, multiplied with the number of production years, Y, in each age interval.

30

Discount factor: Is calculated as ni)1(

1

+

, where i is the discount rate and n the number of

years from today until he received the income. In the table above, n is for the first row 1,25 years, for the second row 5 years, for the third row 10 years and so on. Total discounted income: Total income (S) multiplied with each discount factor. Table A4.2 Calculation of the annual income

Worked time

Age group

F kSEK h/week percent

J kSEK

W kSEK

16-19 26 23,9 59,8 43,5 63,9

20-24 127,6 36,2 90,6 140,9 207,1

25-29 236,2 39,2 97,9 241,3 354,8

30-34 236,2 39,2 97,9 241,3 354,8

35-39 293,1 40,0 100,1 292,9 430,6

40-44 293,1 40,0 100,1 292,9 430,6

45-49 302,8 40,2 100,4 301,7 443,5

50-54 302,8 40,2 100,4 301,7 443,5

55-59 292,5 38,5 96,3 303,7 446,4

Men

60-64 292,5 38,5 96,3 303,7 446,4

Mean value 37,6 246,4

16-19 25,6 19,6 48,9 52,4 77,0

20-24 99,5 30,0 75,0 132,7 195,0

25-29 176,5 33,6 83,9 210,4 309,3

30-34 176,5 33,6 83,9 210,4 309,3

35-39 210,3 33,7 84,1 250,0 367,5

40-44 210,3 33,7 84,1 250,0 367,5

45-49 228,3 35,1 87,8 260,0 382,2

50-54 228,3 35,1 87,8 260,0 382,2

55-59 215,6 32,9 82,1 262,5 385,9

Women

60-64 215,6 32,9 82,1 262,5 385,9

Mean value 32,0 215,1

F = Total income from work for 2003 (F) has been received by Erik Liljegren at Swedish Statistics. The mean income is calculated for those who have an income from work.

J = "Adjusted annual income" is the income from work adjusted so that it correspond to a 40 hour week of work. The mean actual worked time per week for each sex and age group is retrieved from the table "Medelarbetstid per vecka (AKU) efter kön och ålder" (Swedish Statistics). Average working time for women is then 32,0 h/week (80 % of full time)and for men 37,6 h/week (94 % of full time). W = The annual income (W) has been calculated as adjusted annual income (J) multiplied with 1,47, which corresponds to the social costs.

31

Table A4.3 Sum of present values for the otherwise expected incomes in the future for all the persons dying before the age of 65. 3 % discount rate. Thousand SEK. Age 3% 0% 5%

30-34 4432 8464 2948

40-44 12024 17088 11726

45-49 5885 7516 5073

55-59 11732 13072 10948

60-64 3082 3197 3008

Sum 37154 49337 33703