Total Cost-of-Illness

Most COI studies focus on a single disease (e.g., cancer), condition (e.g., brain injury) or class of health problems (e.g., accidents). But several studies have sought to calculate the overall cost of illness in the U.S. using a standardized method across all diseases (Rice et al. 1980). More recently, at the request of Congress, the NIH has sought to assemble COI estimates for specific diseases and compare how these might relate to NIH research funding by disease (Kirschstein 2000).

However, it is difficult to arrive at a composite estimate in this “bottoms up” fashion both because methodologies across various studies differ greatly and because in some cases, the studies overlap in the costs being measured. This is particularly problematic for conditions that are correlated, such as smoking and drinking. If one merely compares health costs for smokers compared to those of non-smokers, the entire difference should not be attributed exclusively to smoking since at least some may be related to other risk-taking behaviors more common among smokers than non-smokers; the same limitation applies to estimating the cost of excess alcohol use, but too often this caution is ignored so that there inevitably would be double-counting if one merely added the estimated cost of drinking from one study to the estimated cost of smoking from another. Thus, the most meaningful estimates of the aggregate cost of illness apply a standardized methodology and data sources to the full range of health conditions to arrive at an estimate that is collectively exhaustive without duplication:

• Dorothy P. Rice. 1966. Estimating the Cost of Illness: Health Economics Series No. 6. PHS Pub. No. 947-6 (Washington, D.C.: U.S. Government Printing Office). Economist Dorothy Rice pioneered the first national estimates of the cost of illness in the U.S. for the year 1963, establishing the conceptual framework and a basic methodology that was replicated in many subsequent studies.
• Dorothy P. Rice. Estimating the Cost of Illness. American Journal of Public Health 57(3): 424-440. This is an abbreviated version of her PHS monograph that focused on estimating the single year cost of illness, i.e., not accounting for the lifetime mortality losses of decedents in 1963, but instead including only their losses during 1963. In 1963, the estimated total cost of illness was $46.3 billion ($22.5B in direct costs, $21.0B in morbidity losses, and $2.7B for annual mortality losses).
• Dorothy P. Rice and Barbara S. Cooper. The Economic Cost of Illness Revisited, Social Security Bulletin 39(2) (Feb. 1976), 21-36. [Abstract]. This updated the original Rice estimates to 1972. In 1972, the estimated total cost of illness was $188 billion: $75 billion for direct costs, $42 billion for morbidity, and $71 billion for lifetime mortality losses among 1972 decedents.
• Dorothy Rice, Thomas A. Hodgson and Andrea Kopstein. The Economic Costs of Illness: A Replication and Update. Health Care Financing Review 7, No. 1 (Fall 1985): 61-80. [Abstract] This article gives the total cost of illness in the U.S. in 1980. In 1980, the estimated total economic costs of illness were $455 billion: $211 billion for direct costs, $68 billion for morbidity, and $176 billion for mortality.
• Samuel A. Mitchell and John A. Virts. Health Care Cost Containment: What is Too Much? Health Affairs Winter 1986: 112-120 (pdf). Exhibit 1 in this article shows that while direct costs of illness as a percent of GDP rose from 1963 to 1972 to 1980, indirect costs (both mortality and morbidity losses) were declining, resulting in a small reduction in the overall burden of illness in the U.S. over this period.