Economic burden using the cost-of-illness method

cases or deaths in a given year. This approach is more appropriate for economic evaluations of NCD interventions because the costs are often immediate or ongoing, but the benefits of the interventions accrue well into the future. For this reason, the lifetime perspective is recommended for evaluating the costeffectiveness of NCD interventions. economic growth models tend to take this perspective. broadly, three methods are used here to quantify the economic burden of diseases: the cost-of-illness method, value of a statistical life method (incidence-based costs only), and dynamic economic growth modeling. This chapter discusses how to calculate the economic burden of NCDs using each of these methods, summarizes existing evidence, and generates new evidence where possible. A final section concludes with a brief summary.

ECONOMIC BURDEN USING THE COST-OF-ILLNESS METHOD

One common method for estimating both prevalence- and incidence-based costs is the static cost-of-illness method. This methodology can take one of several forms. For medical costs, a bottom-up approach for quantifying the burden of NCDs entails identifying the NCDs of interest, estimating the unit costs for treating each condition from claims data or other sources, multiplying prevalence (or incidence) times unit costs times population estimates, and, finally, summing across diseases to generate total costs.

Using this method, the economic burden of seven major NCDs is analyzed for Saudia Arabia. The seven NCDs considered are coronary heart disease, stroke, diabetes mellitus, breast cancer, colon cancer, chronic obstructive pulmonary disease (COPD), and asthma. These seven NCDs are the most costly and prevalent NCDs in Saudia Arabia (UN Interagency Task Force on NCDs 2017) and thus also where data are most readily available. As shown in table 4.2, assuming a population size of 34,268,528 in 2019 (World Population review 2020) and based on the unit cost estimates extrapolated from publicly available sources, a prevalence-based approach reveals the following:

• The annual direct medical cost for seven NCDs in Saudia Arabia totals

Int$9.7 billion (2019 international dollars) (WHO n.d.). • This cost represents 11 percent of annual health expenditures in Saudi Arabia or 0.6 percent of GDP (World bank 2018).

These results are somewhat lower than previous estimates for Saudi Arabia and globally. A 2011 World Health Organization (WHO) study compares costs across multiple Western countries for cardiovascular diseases, cancers, endocrine and metabolic diseases, and respiratory diseases and reports estimated costs for these diseases ranging from 19 percent of total annual health expenditures for Canada to 44 percent for estonia (Garg and evans 2011). A 2015 study using National Health Accounts data for Saudi Arabia estimates that these four diseases account for 21 percent of total health expenditures or roughly 1 percent of GDP (UN Interagency Task Force on NCDs 2017).

There is large uncertainty in both the unit cost data and the prevalence data used in this analysis. Prevalence data are from the Institute for Health Metrics and evaluation’s Global burden of Disease database (IHMe 2017). Cost data for coronary heart disease, stroke, diabetes mellitus, breast cancer, and colon cancer are from Ding et al. (2016). Cost data for COPD are from the United States (Dalal et al. 2010), Germany (Wacker et al. 2016), and Greece (Souliotis et al. 2017).