Background:
Researchers and policy makers have determined that accounting for productivity costs, or"indirect costs," may be as important as including direct medical expenditures whenevaluating the societal value of health interventions. These costs are also important whenestimating the global burden of disease. The estimation of indirect costs is commonly doneon a country-specific basis. However, there are few studies that evaluate indirect costs acrosscountries using a consistent methodology.
Methods:
Using the human capital approach, we developed a model that estimates productivity costs asthe present value of lifetime earnings (PVLE) lost due to premature mortality. Applying thismethodology, the model estimates productivity costs for 29 selected countries, bothdeveloped and emerging. We also provide an illustration of how the inclusion of productivitycosts contributes to an analysis of the societal burden of smoking. A sensitivity analysis isundertaken to assess productivity costs on the basis of the friction cost approach.
Results:
PVLE estimates were higher for certain subpopulations, such as men, younger people, andpeople in developed countries. In the case study, productivity cost estimates from our modelshowed that productivity loss was a substantial share of the total cost burden of prematuremortality due to smoking, accounting for over 75 % of total lifetime costs in the United Statesand 67 % of total lifetime costs in Brazil. Productivity costs were much lower using thefriction cost approach among those of working age.
Conclusions:
Our PVLE model is a novel tool allowing researchers to incorporate the value of lostproductivity due to premature mortality into economic analyses of treatments for diseases orhealth interventions. We provide PVLE estimates for a number of emerging and developedcountries. Including productivity costs in a health economics study allows for a morecomprehensive analysis, and, as demonstrated by our illustration, can have important effectson the results and conclusions.