Cost-of-illness of scleroderma: The case for rare diseases

Cost-of-Il lness of Scleroderma: The Case for Rare Diseases

Leslie Wilson

Objective: To determine the societal costs of scleroderma (SSc), a rare chronic connective tissue disease that affects approximately 98,000 Americans. Lack of reliable national databases limit rare disease cost studies, and this study suggests methods of using multiple data sources to assess the costs of rare diseases. Methods: Primary and secondary data sources were used to calculate direct and indirect costs of SSc, including discounted lifetime mortality and morbidity costs. A prevalence-based, human capital approach was used. Sensitivity analyses were used to vary parameters that are uncertain, such as prevalence, mortality, and labor costs. Results: Annual direct and indirect costs of SSc in the United States are $1.5 billion. Morbidity represents the major cost burden, with costs of $819 million (56%) of total costs. The current value of lifetime earnings lost was $179 million (12%) or $300,000 per death. Direct costs were $462 million (32%) or $4,731 per person annually, indicating that costs are spread over the long disease duration. Conclusions: This study provides one model for the assessment of rare disease costs. Triangulation of data sources and sensitivity analyses are important for determining the costs of rare diseases. The high cost of SSc, despite its low prevalence, suggests that the burden of rare chronic diseases can be high. The high morbidity costs reflect the young age of onset of the disease as well as the need for treatments to decrease morbidity costs. Local shared databases and national surveys are needed to improve cost estimates of rare diseases. Semin Arthritis Rheum 27:73-84. Copyright © 1997 by W.B. Saunders Company

INDEX WORDS: Cost; scleroderma; cost-of-illness; cost-effectiveness; systemic sclerosis; rare disease; connective tissue disease.

A NALYSES of the economic costs of many types of illness have been used to assist a

variety of national and local health policy decisions (1, 2). The economic burden of rare diseases, however, has not been extensively studied because of the difficulty of finding sufficient data and because the cost impact of any single rare disease on society is thought to be small. However, rare diseases often have a chronic and intense pattern of health care use, with extended periods of morbidity and early mortality. Viewed collectively, rare diseases may represent a significant societal burden that should receive an appropriate share of health care resources. As new and seemingly expensive treatments are developed for rare diseases such as Gaucher's disease and multiple sclerosis, it will become increasingly important to determine both the costs of those diseases and the potential impact of these new treatments. Methods to determine the societal costs of rare diseases such as the triangula-

tion of data sources (ie, the use of multiple data sources to support an estimate) used in this paper to study scleroderma (SSc) will provide a way to assess the magnitude of the economic burden of those diseases.

The Federal Drug Administration definition of rare disorders for drugs and devices with orphan drug status, also used by the National Organization

From the School of Pharmacy, Universio~ of CalifotTTia, San Francisco.

Leslie Wilson, PhD: Assistant Adjunct Professor, School of Pharmacy, University of California, San Francisco.

Supported ~ an unrestricted grant from Connetics Corp, PaIo Alto, CA.

Address reprint requests to Leslie Wilson, PhD, Assistant Adjunct Professor, School of Pharmac); Box 0622, University of California, San Francisco, 521 Parnassus Ave, San Francisco, CA 94143.

Copyright © 1997 by W.B. Saunders Company 0049-0172/97/2702-000255. 00/0

Seminars in Arthritis and Rheumatism, Vo127, No 2 (October), 1997: pp 73-84 73

74 LESLIE WILSON

for Rare Disorders (NORD), is that fewer than 200,000 persons are affected with a disease in the United States (Stephen C. Groft, February 1996, personal communication). NORD lists approximately 1,000 rare diseases in it's database.

This article outlines methods and data available to determine the cost of illness of systemic sclerosis (SSc), a rare connective tissue disease affecting approximately 100,000 Americans. There are two major problems associated with the cost calculation of rare diseases: the lack of national data sets that include these diseases in sufficient numbers, and the biases associated with the use of local and specialty medical practice data in making patient epidemiology and cost calculations. National attention to the funding of rare disease databases that can be standardized across regions is suggested.

Systemic sclerosis, the severe form of a group of disorders called scleroderma, is an autoimmune connective tissue disease characterized by microvas- cular damage and excessive matrix production by fibroblasts, resulting in both local and systemic damage to the skin and the internal organs, primarily the gastrointestinal system, kidneys, lungs, and heart (3-6). SSc affects predominantly women of young adult age, with a mortality of 50% to 70% in 7 years, primarily of pulmonary and renal damage (7-9). The cause of the disease is unknown, and treatment currently consists primarily of symptom- atic therapies for the major organs affected (10).

SSc is classified by the American College of Rheumatology into limited and diffuse forms. The limited form of the disease often presents with skin involvement confined to the area below the elbows, hands, feet, and face and progresses at a slower rate than the diffuse form. Patients with limited disease often are diagnosed after years with Raynaud's phenomenon, and problems such as pulmonary hypertension more commonly occur late in the disease. Patients with diffuse SSc present with skin involvement above the elbows and often on the trunk, have organ damage at an earlier stage, and exhibit an earlier death (11-14).

METHODS AND DATA SOURCES

Two approaches can be used to calculate the costs of illness; a prevalence approach, which is most often used with chronic diseases and is the "stream of medical costs attributable to all patients alive with the disease during a specified time

period," and an incidence approach, used more commonly for acute disease, and which is "the present discounted expected sum of current and future costs accruing to all incident cases in a time period" (15). This study uses a prevalence-based, human capital approach to calculate annual direct and indirect costs of illness (defined later), including discounted lifetime mortality costs or the costs attributable to premature death of the disease. In the human capital approach, the cost attributable to early mortality is calculated as the loss of work productivity as a member of the labor force or as a homemaker.

Illness costs are primarily categorized into direct costs and indirect costs. Direct costs are the value of all resources used in the medical treatment of a disease or its effects. Indirect costs are the productivity losses or gains attributable to morbidity and premature mortality from the disease.

National surveys are the usual source of data for cost of illness studies. Because these surveys generally sample a very small proportion of the population, they do not contain enough persons with rare diseases to provide reliable estimates of health care utilization or expenditures. There were essentially no reliable cost data from national data sets available on SSc for use in this cost study. For this study, a variety of state and local databases (described later) were used to support national data in the calculation of both direct and indirect costs.

Prevalence and Incidence

The study of SSc epidemiology has been ham- pered by its relative rarity. Studies have reached different estimates of prevalence of the disease, which vary over time and depend on the methodology used to gather the data (ie, hospital or commu- nity surveys) (6, 13, 16-18). SSc has a variable age of disease onset, but the highest incidence rates are in the 45- to 64-year age range (6). The incidence is three to eight times higher in women than in men (6, 13, 16, 17). The most recent prevalence estimates, which account for the increased survival since 1980 attributable primarily to the introduc- tion of ACE inhibitors, suggest a prevalence of 375 per million population. This number is based on an incidence of 25/million and an average disease duration of 15 years (Thomas Medsgar Jr., MD, Pittsburgh, PA, personal communication, 1995). This prevalence number is used as the base case for this study, but calculations were done varying the

COST OF ILLNESS OF SCLERODERMA 75

prevalence number from 253 to 525 per million to determine the impact of the various estimates on cost (13, 16, 17).

Direct Costs

Categories of direct medical costs include hospitalizations, outpatient and clinic services, physician services, pharmacist and pharmacy expenses, dental services, skilled nursing facility/intermediate care facilities, optometrist and optometry services, clinical laboratory services, other professional providers (chiropractor, podiatrist, psychiatrist, acu- puncturist), prosthetics, orthotics, durable medical equipment, medical transportation, home health and rehabilitation facilities, Short Doyle facilities for detoxification or methadone treatment, and other (primarily nonprofessional providers of sup- plies). Data sources for hospitalization rates were obtained from published literature, the National Hospital Discharge Survey (NHDS) (19), the Mary- land State Data Base (20), and the American Rheumatism Association Information System (ARAMIS) data (21). Physician and hospital cost data sources include ARAMIS and Medi-Cal. Al- though Medi-Cal data provided the most complete direct cost data, the other data sources were used to provide support for the validity of the Medi-Cal estimates.

The NHDS, the only national data set used in this study, is a population-based survey of discharges from short-stay hospitals in the United States. The NHDS showed 13,000 patient discharges (relative standard error 10.54) and 99,000 days of care in 1992 for patients with SSc (all-listed ICD-9 of 710.1) (19) having an average length of stay (LOS) of 7.2 days (22). The NHDS publishes hospital discharges for both first-listed and all-listed diagnoses. All-listed diagnoses were used here because SSc causes many types of organ failures, which may be the primary hospital discharge diagnosis; but because they are caused by SSc, the costs should be attributed to SSc. This choice will overcount hospitalizations somewhat, because some hospitalizations will be unrelated to SSc.

Medi-Cal-paid claims data, used to determine average direct costs, represent a population fairly representative of SSc patients who are primarily young adult women. Because the number of SSc patients is small, the claims files were searched by diagnoses for those claims that include diagnosis, and searched again by patient record numbers for

those claims (such as pharmacy) not available by diagnosis. A 10% sample of Medi-Cal data identi- fied 77 SSc patients, suggesting that approximately 770 SSc patients filed Medi-Cal claims in 1994. The Medi-Cal data provide a rare look at costs across a population of patients treated in a variety of settings, as opposed to information gar.hered only from scleroderma clinics, which are the basis of most of the published patient data. Medi-Cal data therefore are likely to represent a fairly accurate, but lower end range of patient care costs, whereas data from specialty clinics may represent the higher range of treatment costs.

The Maryland State Database (20) is one of the most accurate state databases for hospital charge reporting and may reflect the long-term interests of the Maryland Cost Review Commission in oversee- ing Maryland hospital costs. These data were used to estimate hospital costs of SSc patients.

Costs were obtained also from the ARAMIS data bank at Stanford University (21). This is a unique database that was set up in 1974 under a federal grant to collect data on a convenience sample of patients with rheumatic diseases. The database surveyed SSc patients in several major SSc centers, including Stanford University, University of Pitts- burgh, University of Maryland, and Johns Hopkins (23). It includes medical information, health care utilization data, productivity losses, and quality of life data. Data were collected every 6 months through self-administration of an extensive questionnaire, primarily the Arthritis Impact Measure and the Health Assessment Questionnaire (23-25). Pri- marily because of lack of continued funding, however, these SSc databases generally were allowed to lapse. The best remaining set of SSc utilization data still available, and used for this study, is kept by J. Fries at Stanford University. This set includes 183 cases with data from up to nine data collection periods spaced 6 months apart; 14% of these cases were men, and 86% were women, (a ratio of 1 to 6) (21).

Indirect Costs

Indirect costs are losses of output to society and are separated into mortality and morbidity losses. There are two major approaches to the valuation of life in the calculation of indirect costs: the human capital approach and the willingness to pay (WTP) approach. The human capital approach, used here, values time lost to illness or premature death as the

76 LESLIE WILSON

current value of future expected earnings that will be lost as a result of that illness or death. The WTP approach values time lost by the amount patients

would be willing to forgo to avoid that illness or death, and therefore includes intangible costs such as pain and suffering. The WTP literature is grow- ing and has been reviewed elsewhere (2, 26). In a review of 29 credible WTP studies, Miller (2, 26) estimated the value of life with 40 years to live to be $1.95 million (standard deviation = $0.5 million) or $120,000 per life-year (2). These estimates are generally between one and six times the amount

estimated by the human capital approach (2). The human capital approach therefore provides a conser- vative estimate of indirect costs.

Indirect costs were calculated using published epidemiology and mortality data. Mortality costs were estimated by determining the life expectancy and future earnings by age, gender, and labor force participation rate. Calculations of lifetime earnings lost were estimated using data from D. Rice (Prof. Emeritus, UCSE Institute for Health and Aging, written communication, 1995), separated by age and gender, using data from the Bureau of Labor Statistics to determine earnings and labor force participation rates. The 1992 employment and earnings were inflated by 1.069 to estimate 1994 productivity losses (27). The value of household work for men and women also is added to these labor force earnings so as not to undervalue female productivity. The methodology of Peskin is used, which determines the mean time spent keeping house by men and women and values these contri- butions by the specific tasks performed and the prevailing wage rate for similar tasks (28). A discount rate of 4% (varied from 2% to 6%), to express future earnings as a reduced present value, and an average annual increase of 1% in wage earner productivity were used.

Morbidity costs were obtained from the ARAMIS health care utilization data and included the value attributable to lost employment, activity losses, disability, and sick leave reported as having oc- curred because of the disease, including housekeeping. For morbidity, housekeeping was valued as the wage rate of paid market workers for similar tasks. The median weekly earnings of private household service workers in 1985 was inflated to 1994 using the Consumer Price Index for wages (29).

Mortality

SSc has a highly variable course but generally has a high mortality rate. Cumulative survival for SSc in one study was less that 80% at 2 years, 50% at 8.5 years, and 30% at 12 years (8). Before the use of angiotensin-converting enzyme (ACE) inhibitors to reduce renal crisis in the 1980s, mortality was much higher, with a 20% 1-year cumulative survival rate (6). Now pulmonary dysfunction, which ultimately develops into severe interstitial fibrosis, is the most frequent cause of death (30). Silman and others (8, 9, 13, 31) suggest a mortality rate of 2.29/million (859 deaths in 1994), which includes the increased longevity of patients treated with ACE inhibitors, and this figure is used to calculate the base case indirect costs.

Base Case Estimates and Sensitivity Analyses

All of the estimates in this study are subject to varying amounts of imprecision. Calculations were made for a set of base case estimates of prevalence, mortality, and discount rates. Low- and high-range estimates also were made as determined by ranges of literature estimates (Table 1). Sensitivity analyses were performed on the final costs using these range estimates by substituting each value singly and estimating a new total cost based on that changed estimate. Total direct and indirect costs were recalculated using varying prevalence and death rates, direct medical costs, and annual earn-

Table 1: Epidemiology: Systemic Sclerosis, 1994

Base Variable Case Low High

Incidence* Number per year 6,508 5,466 7,809

Per mil l ion 25 21 30

Disease duration

(yr) 15 12 17.5

Preva lencei

Number per year 97,613 65,867 136,680

Per mil l ion 375 253 525

Deaths$ Number per year 859 484 1,061

Rate per mil l ion 2.29 1.29 2.83

*Data from Steen and Medsgar (6), SiIIman and Hochberg (13), Medsgar (16), and Maricq et al (17)~ tData from Medsgar (16) and Michet et al (18). SData from Altman et al (8), Maricq et al (17), and Sillman (31).

COST OF ILLNESS OE SCLERODERMA 77

ings. Discount rates of the current value of lifetime earnings varied from 2% to 6%.

RESULTS

Direct Costs

Total direct costs for SSc patients are estimated at $462 million annually, $458 million of medical costs plus $4 million of research costs.

Direct Medical Costs

Medi-Cal payments (Table 2) vary considerably by age, which may reflect the intensity of medical care use at various disease stages. The average annual payments per patient are highest in the 21- to 30-year age range ($8,182), and next highest in the 31- to 44-year age-group ($6,466). The 31- to 44-year age-group also has the greatest disease prevalence (32% of all with the disease). Costs decline to $3,192 per patient in the age-group 45 to 54 years, perhaps representing less i l l patients who have survived to this age or those with new disease onset.

Average annual direct medical costs (Table 3) amount to $4,694 per patient. Most of these costs are attributable to hospitalization and medications, which represent 45% and 22% of the total costs, respectively. In addition, physician services and clinic and outpatient services represent 11% and 8% of the total costs, respectively. A relatively high percentage (10%) of total costs was spent on items corresponding to the significant disability that can occur with SSc, such as durable medical equip-

ment, skilled nursing facility care, prosthetics and orthotics, medical transportation, and home care and rehabilitation, (5.5%, 3% and 0.6%, 0.4%, 0.2% respectively) (Table 3).

Direct costs obtained from other databases were compared with the Medi-Cal direct costs to determine their general validity. The Maryland state data were examined for costs of hospitalization, and the ARAMIS data were examined for hospital stays, physician visits, radiographs, and nursing home use. Maryland state data show that the average charge per SSc hospitalization was $10,433. Using the average Maryland cost-to-charge ratio of 0.89, the average cost for an SSc admission is $9,285. Every SSc patient does not have an ammal hospitalization, and the Medi-Cal data indicate that on average, one of four SSc patients is hospitalized in a given year. This gives an average Maryland annual hospitalization cost of $2,321 per patient, similar to the Medi-Cal cost per year of $2,092. Using this same Maryland cost per hospitalization of $9,285, and dividing by the average annual SSc LOS for these patients from the NHDS, a cost per day of $1,290 was calculated. This number was used (Table 4) with the 1.6 annual hospital days from the ARAMIS data to estimate the average SSc hospital cost per year of $2,064, also similar to the Medi-Cal and Maryland hospital cost calculations described earlier.

Table 4 also shows the total annual direct costs calculated with the ARAMIS utilization data. These data do not include reliable estimates of laboratory,

Table 2: Estimated Total Claims and Medi-Cal Payments for Systemic Sclerosis Patients by Age and Gender, 1994

Payments

Total Men Women Total Per Patient

Number of claims 38,530 2,270 36,260 Number of patients 770 80 690 Claims per patient 50 28 53 Age groups:

Total 770 80 690 $3,534,640 $4,590 <15 yr 50 10 40 84,910 1,698 15-20 20 10 10 102,670 5,134 21-30 50 10 40 409,120 8,182 31-44 250 30 220 1,616,470 6,466 45-54 190 10 180 606,470 3,1£2 55-64 140 0 140 590,190 4,216 65-74 30 0 30 22,840 761 75 + 40 10 30 101,970 2,549

78 LESLIE WILSON

Table 3: Annual Direct Medical Costs of Systemic Sclerosis Per Person by Type

of Service, Medi-Cal Data, 1994

Type of Service Amount %

Total paid per year $4,694* 100 Hospitalization 2,092 45 Pharmacist/pharmacy 1,017 22 Physician services 513 11 Outpatient and clinic services 392 8 Durable medical equipment 257 5.5 SNF/ICF 127 3 Dental services 93 2 Clinical laboratory services 41 0.9 Prosthetics/orthotics 28 0.6 Other professional providers 23 0.5 Optometrist/optometry 23 0.5 Medical transportation 18 0.4 Home health/rehabilitation

facilities 9 0.2 Short Doyle facilities 46 1 All other 14 0.3

Abbreviatien: SNF/ICF, skilled nursing facility and intermediate

care facility care. *Total paid does not match total in Table 2 because of

rounding,

medications, and dental use, so the total excludes these costs. Total ARAMIS costs are $2,940 annually, which is close to the Medi-Cal annual costs of $3,124 after excluding laboratory, medications, and dental costs. The Medi-Cal patient costs (Table 3) are the most inclusive, with all direct cost items except patient out-of-pocket expenses, and the total direct costs of $4,694 will be used in the remainder of this analysis for direct medical costs. The use of alternative data sources to calculate both hospitalization and total costs give added validity to the estimated direct costs of SSc patients. Using the Medi-Cal estimate, total annual direct medical costs were calculated to be $458 million for all SSc patients.

Direct Research Costs

The costs of research of the disease are included in the direct societal illness costs. National Insti- tutes of Health research funding in 1994 for SSc included 30 grants from five research institutes. A total of $2.7 million was awarded, with more than half coming from the Arthritis and Rheumatic Disease unit ($1.85 million) (Stephen Groft, written communication, February, 1996). Money was

also awarded in 1994 for SSc listed as a secondary research purpose, with six grants awarded totalling another $1.9 million. For this study, half of this amount was added to the total amount where SSc was the primary research purpose to total $3.6 million spent on research in 1994, amounting to only $37 per SSc patient.

Total Indirect Costs

Indirect costs for this study include costs attributable to mortality and morbidity. Total annual indirect costs for SSc are estimated at $998 million, 29% of which is attributable to men and 71% to women.

Mortality

Costs attributable to premature mortality are calculated as the current value of lifetime earnings lost by age and gender and include losses for those in the labor force and those providing housekeeping services. A total of approximately $180 million in lifetime earnings is lost because of the approximately 597 annual deaths attributable to SSc (Table 5). Because the prevalence and deaths are so much greater for women than men (483 female deaths v 114 male deaths per year), the value of lifetime earnings lost by women is more than three times that of men ($136 million v $43 million, respectively), although not as much greater as the four times greater annual deaths of women to men. This difference is primarily attributable to wage differ- ences attributable to men and women in the calculation of earnings lost.

The total of $180 million is a relatively high value for life lost because of premature death of SSc patients when one considers the rare prevalence of this disease (98,000 Americans in 1994). These costs reflect both the high rates of disease mortality and the high rate of mortality in the younger population. Most of the years lost are in those younger than the retirement age of 65 years (Table 5). The deaths for both men and women are highest in the 55- to 64-year age-group (31% for men and 28% for women) and the 45- to 54-year age-group (25% for men and 23% for women), both maximally productive timeframes. The highest lifetime mortality costs for both men and women is in the 45- to 54-year age-group, with $15.5 million (36%) and $43.5 million (32%) lost. The 23% of female deaths in this age-group account for 32% of the female costs, whereas the

COST OF ILLNESS OF SCLERODERMA

Table 4: Annual Direct Costs of Systemic Sclerosis Patients by Type of Costs, ARAMIS and Northern California Hospital Data, 1994

79

Utilization Per Year

Type of Cost Total Men Women Cost per Unit* Total Cost

Totalt $2,940

Cases 183 26 157

Hospital days 1.6 0.8 1.8 $%2905 $2,064

Rheumatologist visits 4.0 4.0 4.0 101 404

Other doctor visits 6.8 6.0 7.0 59 40'1

Emergency visits 0.04 0.0 0.4 177 71

Outpatient surgery 0,6 0.3 0.6 119 7'1

Podiatry visits 1.2 0.0 ! .4 80 96

Social work/PT visits 1.8 1,2 1.9 50 90

Chest radiographs 0.4 1.2 0.3 90 36

GI radiographs 0.4 1.2 0.3 360 144

Other radiographs 1.0 1,8 0.8 180 180

Nursing home days 0.16 0.0 0.18 158 25

Abbreviations: PT, physical therapy; GI, gastrointestinal. *Northern California medicat center costs except as noted. tTotal excludes laboratory tests, medications, and dental costs, because these were unreliable in the ARAMIS database. SMD state and National Hospital Discharge Survey data.

25% of the male deaths account for 36% of the male mortality costs. Male and female deaths are also high for ages 65 to 74, with 19% and 21% of patients, respectively, dying annually at much lower relative lifetime costs of $1.3 million (3%) and $6.5 million (5%).

Discount rates have a large effect on total mortality costs, especially because of the younger age of mortality; the lower the discount rates, the higher the mortality costs. Table 5 shows lifetime mortality costs at 2%, 4%, and 6% discount rates. Mortality costs are $221 million at 2% and approximately two thirds of that ($150 million) at 6% discount rates.

Morbidity Costs

Morbidity costs include work loss days, job loss, unemployed activity loss, and disability and sick leave costs (Table 6). Average annual morbidity costs were calculated using the ARAMIS database. As Table 6 shows, annual total morbidity costs of the employed and unemployed from all causes of lost activity is estimated at $819 million for both sexes, $244 million for men and $575 million for women.

Work Loss

These data show an average of 2.1 work loss days per year for both men and women who are

currently employed. Given the prevalence of SSc and an average of 245 working days per year, there are a total of 831 person-years lost for the employed population because of morbidity from SSc. This results in a loss of $28.04 million, most of which ($19.5 million) are losses for women and only about $8.5 million of which are attributable to m e n .

Job Loss

Ten percent of the ARAMIS SSc patients reported job loss attributable to SSc. Using this number and dividing the total for SSc patients losing jobs (9,761) by 2 to reflect an even distribu- tion of job loss during a year period, a total of 4,881 SSc patients are estimated to have lost a full year of work because of their disease morbidity (3,660 women, and 1,220 men). This results in a total annual cost of SSc job loss of $164.7 million, $49.9 million lost by men, and $114.8 million lost by w o m e n .

Unemployed Activity Loss

The ARAMIS database also reported an annual activity loss of 11.79 days for the unemployed. If one considers these days as lost housekeeping days and values them at the same rate as is paid fi~r this service in the labor force ($9,232 yearly), then these 1,466 person-years lost from the unemployed

80 LESLIE WILSON

Table 5: Mortal i ty Costs: Present Value of Lifetime Earnings Lost Because of Scleroderma by Age and Gender, 1994

Amounts (Thousands) Amount + Age Number Years 4% Discount Cost per Discount Rates (yr) of Deaths Lost (Thousands) Death 2% 6%

Total 597* 15,619 $179,164 0-14 2.41 237 1,409

15-24 9.65 578 7,714 25-34 30.34 1,520 24,076 35-44 69.13 2,796 45,057

45-54 138.18 4,309 58,945 55-64 169.36 3,843 33,482 65-74 123.67 1,903 7,837 75 and over 54.36 499 643

Men: Total 114 2,589 $ 42,842

0-14 0.55 36 377 15-24 1.33 72 1,300

25-34 4.87 219 4,953 35-44 13.35 481 11,439 45-54 28.11 765 15,491 55-64 34.94 671 7,875 65-74 22.30 281 1,327 75 and over 8.64 65 81

Women: Total 483 13,030 $136,322

0-14 1.86 135 1,032 15-24 8.32 506 6,414 25-34 25.47 1,301 19,124

35-44 55.78 2,315 33,618 45-54 110.07 3,544 43,455 55-64 134.42 3,172 25,607 65-74 101.37 1,622 6,510 75 and over 45.72 434 562

$ 300,107 $220,788 $150,143

584,667 2,699 794 799,390 11,603 5,467 793,550 32,690 18,556 651,778 56,731 36,875

426,583 69,775 50,766 197,697 37,944 29,927 63,370 8,657 7,155 11,822 688 603

$ 375,806 $ 52,933 $ 36,356 684,692 731 209 977,403 1,974 908

1,016,970 6,701 3,813 856,865 14,220 9,442

551,073 18,010 13,533 225,389 8,765 7,148

59,496 1,446 1,226 9,385 86 76

$ 282 240 555 090 770 933 750 831 602 694 394 790 190 498 64,222 12,282

$168,322 $113,787 1,968 584 9,629 4,588

25,989 14,743 42,511 27,433 51,765 37,233 29,179 22,779

7,211 5,929 601 526

*Only 597 deaths had information on age and gender used to calculate mortality costs. Table I uses 859 deaths caused by a difference in disease prevalence used for calculations of deaths. Sensitivity analyses (Table 8) show effects of varying prevalence and mortality rates on total costs.

because of activity loss results in a total loss of $13.5 million, $4.0 million for men and $9.5 million for women.

Disability and Sick Leave

Disability and sick leave were the final indirect cost categories. The ARAMIS data show that 18.2% of SSc patients report being on disability and 0.6% on sick leave because of their disease. Using the average men's and women's salaries reported by the Bureau of Labor Statistics, this

results in a loss of $599.4 million for disability and $13.6 million for sick leave.

Total Economic Impact

SSc imposes a $1.5 billion burden on the U. S. economy (Table 7). A total of $402 million are attributable to men and over $1 billion to women. Per-person average annual costs are $14,959, $14,985 per SSc woman and $14,879 per man. Direct medical costs account for only 31% of the total costs. Research costs account for only 0.2% of

COST OF ILLNESS OF SCLERODERMA

Table 6: Morbidity Costs by Gender

8I

Person-Years Lost

Total Men Women Total

Costs (Thousands)

Men Women

Total morbidity 19,569 4,859 Employed population

Work loss 831 208 Unemployed population: Total 18,738 4,651

Job loss 4,881 1,220 Activity loss 1,466 434 Disability loss 11,988 2,997 Sick leave 403 0

14,714 $819,199 $244,082 $575,1013

623 28,040 8,499 19,541

14,091 791,159 235,583 555,567 3,660 164,663 49,908 114,752 1,037 13,530 4,010 9,523 8,991 599,372 181,665 417,697

403 13,595 0 13,595

NOTE, Items do not add exactly to totals because of rounding.

total costs. Indirect costs are the largest proportion (68%) of total annual costs, with morbidity costs accounting for 82% of these indirect costs.

Sensitivity Analyses

Total annual indirect costs were calculated with use of a base case and a range of higher and lower values for variables thought to be sensitive to costs. Prevalence rates were varied from 253 per million to 525 per million population, death rates from 1.29 per million to 3.29 per million, annual direct costs from $2,000 to $10,000 per person, and annual earnings from $34,000 to $76,000 per person (Table 8). Published prevalence figures for SSc show a wide range of values, and the effect on cost is direct and linear. For every change in prevalence of 1 per million, there is a change of approximately $4.6 million in total costs, with total costs varying from $1 to $2.1 billion. Changes in death rates also affected costs, and to a much greater degree than prevalence, with a change in 1 per million death rate equal to a change in $225 million in total costs, and the iow and high range of total annual costs from $1.4 to $t.6 billion. Direct costs also were varied, between $2,000 and $10,000 annually per person. In the base case, direct costs ($4,731 per person) were only approximately 32% of total annual SSc costs. Each change of $10,000 per SSc person in direct costs changes the total annual SSc costs by $1 billion. Average annual earnings also have a large effect on total costs, with a doubling of earnings almost doubling the total annual costs.

DISCUSSION

Morbidity costs of chronic diseases represent one of the major societal cost burdens, far outweigh-

ing that of acute diseases. Rare chronic diseases, as SSc morbidity costs show, are a major societal as well as personal burden. Data limitations can be overcome to study rare disease costs so that these chronic low-prevalence diseases can be included in the assessment of societies' health priorities.

Limitations of Data

The mixture of surveys and studies used to compile SSc costs each have their own biases. Although none is perfect, together they can serve as a collective estimate, which, if used with expertise and insight, can be helpful to policy and health care decision makers. The SSc costs presented in this article are based on relatively few patients from each data set and thus must be viewed with caution because of the large variability inherent in small samples. In this and other instances in which low patient prevalence makes it difficult to get cost of illness information, the use of multiple data sets that converge on cost estimates can provide a more valid picture of health care utilization and costs. These data are likely to be sufficiently accurate to make broad policy decisions about the disease and its societal impact, and to track its expenditure over lime.

The small number of SSc patients made it easier to conduct multiple-level searches of Medi-Cal claims data and match claims without diagnoses to a single SSc patient to obtain patient-level data. Additional data sources allowed a triangulation of data to provide an acceptable range of costs, tbr use in making policy decisions. More and better data are needed for a clearer understanding of the costs of rare diseases. NIH has recently authorized a

82 LESLIE WILSON

Table 7: Estimated Total Direct and Indirect Costs of Systemic Sclerosis, 1994

Aggregate Amount (Thousands of Dollars) Cost per Person

Total Men Women Total Men Women

Total $1,460,167 $402,379 $1,057,784 $14,959 $14,879 $14,985

Direct: Total 461,805 115,451 346,354 4,731 4,731 4,731

Med ical 458,193 114,548 343,645 4,694 4,694 4,694

Research 3,613 903 2,710 37 37 37

Indirect: Total 998,362 286,928 711,430 10,228 10,149 10,254

Mortal i ty 179,164 42,842 136,322 1,835 1,756 1,862

Morbid i ty 819,199 244,082 575,108 8,392 8,393 8,392

NOTE. Items do not add exactly to totals because of rounding.

national center for rare diseases, and health care utilization data collection should be one priority for funding fi'om this group.

The shortcomings of the human capital approach for valuing the societal burden of a disease should be noted when evaluating the data. The value of female labor has a large effect on the morbidity and mortality costs of a disease such as SSc, which affects women three to eight times more frequently than men, and should be kept in mind when using these analyses to make health care decisions.

Not captured in this study are the pain, suffering, and isolation inherent in having a disease such as SSc. Additionally, out-of-pocket expenses are not considered here, although they could be consider- able, especially for travel to scleroderma centers and over-the-counter skin care products and ban- dages for ulcerations. Finally, the costs of experi- mental treatments, some of which could be consid-

erable, are not considered here. For example, at one hospital, the yearly direct per-patient charge for photophoresis treatment is, on average, $35,000. Despite these limitations, the data presented here are likely to be sufficiently accurate to help set health policy and research priorities, and more cost-of-illness studies are warranted.

The most important findings from this calculation of SSc costs were that despite the relatively low SSc prevalence, the total costs ($1.5 billion) are significant. Second, most of this burden results from the loss of productivity attributable to the disease morbidity and mortality; 68% of the total costs are indirect. If this were a disease predominantly of men and valued at a higher productivity rate, the amount would be even greater.

The low direct costs highlight the lack of effec- tive treatments for this disease, as well as the large number of years over which these costs are in-

Table 8: Sensitivity Analyses

Total Costs*

Range* High Low

Base Rate High Low (millions) (millions)

Prevalence per mil l ion 375 525 253 $2,154 $1,038

Mortal i ty rate per mil l ion 2.29 3.29 1.29 $1,651 $1,426

Direct medical costs per person $ 4,694 $10,000 $ 2,000 $1,974 $1,194 Average annual earnings $33,738 $76,350 $67,476 $2,317 $2,103

Total costs~ (mill ions) $ 1,460 $ 2,810 $ 1,294

*High and low ranges for sensitivity analyses were obtained from the literature for prevalence and mortality rate, approximately doubling and halving the base case rates for medical costs and low-range earnings, and to equalize the female salary with male salary

for the high-range earnings. 1-Total costs are calculated by changing one row parameter at a time, with all other factors being base case values. SThese are total costs for all base, high, or low parameter ranges taken together.

COST OF ILLNESS OF SCLERODERMA 83

curred. A treatment that lengthens the work productivity by l year would decrease costs by approximately $819 million over the 15-year course of the disease, and one that prolonged life by 1 year would decrease costs by $28 million (undis- counted). Finally, the annual morbidity costs are 4.6 times those attributable to mortality. Attention should be paid to improving patient function and keeping SSc patients working and active, as well as to those treatments that provide a longer life span. Significant societal losses could be reduced by the development of new technologies, even if they added significantly to direct care costs.

In comparison, the costs of ulcerative colitis, which has a prevalence of 240,000, are $400 to $600 million, and total annual costs of Crohn's disease are similar to those of SSc, approximately $1 to $1.2 billion (inflated to 1994 dollars) (32). Strokes cost approximately $15 to 30 billion annually (33, 34), and Alzheimer's disease costs society approximately $42 billion per year (35, 36). All of the rheumatic diseases and musculoskeletal conditions cost approximately $42 billion and $149 billion, respectively, with SSc accounting for approximately 3% and 1%, respectively, of this annual total (37). Despite the relatively low prevalence of SSc, and the low expenditures for direct

costs, the total loss to society primarily attributable to morbidity and mortality losses are quite high.

There are approximately 1,000 rare diseases listed by the Association of Rare Diseases. If a number of these diseases have a prevalence and societal cost burden similar to SSc ($1.5 billion), there is a significant societal impact from rare diseases that should receive national attention. More emphasis on the research of and treatments for SSc and other rare diseases could have an important impact on reducing societal burden from these chronic diseases. Further, given the collective cost of these diseases to society, continued collection of health cm'e utilization data should be a national priority. It is hoped that this study can serve as a model of how to collect and assess the cost of rare diseases and act to bring the importance of rare diseases such as SSc to the attention of policymakers.

ACKNOWLEDGMENT

The author acknowledges the helpful assistance of Bill Maxfield in searching the Medi-Cal data. The sharing of the ARAMIS database was offered by John Fries, Stanford Univer- sity. Many hours of expert data manipulation were integrated into already full days by Deana Ramey at Stanford University, and by Laura Trupen at UCSF, Institute on Aging. Finally, the author thanks Dorothy Rice, PhD, for her many helpful sugges- tions in reviewing the manuscript.

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Cost-of-illness of scleroderma: The case for rare diseases