This paper attempts to develop a comprehensive understanding of the total cost of asthma in Australia. Although asthma has in recent years been recognised as a common health problem, affecting between 8% and 9% of Australians or around 1.4 million people, there have been few attempts to gain a detailed knowledge of the economic impact of the disease. The quantifiable costs of asthma, namely the medical related and indirect costs of lost productivity, have been evaluated here in an effort to fill this void.

The study relies on expert opinion and reliable sources of data to understand the total quantifiable cost of the disease and the prevalence of asthma in all age groups as well as the impact of asthma severity and control on cost for adult sufferers. The bearers of these quantifiable costs were also identified. No attempt, however, was made to place a financial value on the intangible yet significant "quality of life" costs.

TOTAL COST

The total 1991 cost burden of asthma to the Australian community is estimated to be in the range of $585 to $720 million. A range of values has been developed to account for the various estimates of the loss of productivity due to asthma. The total cost consists of around $320 million in medical related costs and around $260 to $400 million in indirect costs from lost productivity. This 1:1 relationship between direct and indirect costs compares well against overseas asthma cost studies. Thus, at its current cost level, asthma imposes a substantial burden on society. The disease's cost, though, is comparable with those of higher profile diseases in Australia such as coronary heart disease, which annually costs the community $623 million (includes medical and indirect costs of diet-related coronary heart disease only; Crowley et at, 1992).

A significant proportion of the total asthma cost, between 45% and 55%, is due to the costs of asthma related lost productivity. Historically, these opportunity costs of foregone output have not been valued and, as a result, the total cost of asthma based only on medical costs has been grossly underestimated.

 DIRECT COSTS

The medical related costs of asthma amount to around $320 million. Over 35% of the medical cost, or $120 million, is due to pharmaceutical prescriptions and devices. Another third of the cost, close to $100 million, arises from some 3 million medical consultations, predominantly GP services, provided annually to asthmatics outside the hospital system. The other significant medical cost is the cost of hospitalising asthmatics. This is estimated at approximately $60 million and includes the costs of caring for asthmatics as hospital inpatients and in the emergency and outpatient departments. The total cost figure is based on average hospital costs of $358 per day and total asthma bed days of 155,000 per year.

The remaining medical related costs are all much lower in value. Indirect medical costs of just over $30 million are due to the fact that asthma can exacerbate other medical conditions and hence increase the cost and demands placed on the health system. The cost of allied therapies sought by asthmatics represents another $8 million whereas the cost of ambulance transport for asthmatics amounts to only $5 million of the total cost.

INDIRECT COSTS

The indirect costs of asthma, estimated in the range of $260 to $400 million, are those costs incurred by an individual, an individual's family or the community because of the adverse consequences asthma may have on an individual's work and social activities. These opportunity costs of foregone output have been valued on a time basis at the GDP hourly rate.

Asthma related absenteeism accounts for over 60% of these indirect costs of asthma. Around $110 million, the equivalent of 0.5 days per year for each working asthmatic, is absenteeism directly due to asthmatic illness. Another $90 to $120 million, depending on the assumption of work days lost, is incurred as a result of employed caregivers having to stay with a sick asthmatic child.

Apart from resulting in absenteeism, asthma can also limit the effectiveness of employees while they are at work. This cost has been estimated between $40 and $100 million, based on assumptions of lost productivity in the range of 10% to 25% and a total of around 1.8 million work affected days. It excludes the costs of lost productivity from asthmatics taking time off work to attend consultations. The value of this foregone output represents an additional $20 to $60 million.

 COST OF ASTHMA BY SEVERITY END DEGREE OF CONTROL

The cost burden of asthma is not spread evenly across all asthmatic sufferers. The more severe the underlying asthma, the greater is a person's need for medical and other services. This study estimates that close to 40%, or $122 million of the total medical costs of adult asthma are for a small number of severe and very severe asthmatics, whereas the large number of very mild asthmatics only consume 15%. Similarly the medical costs incurred by an adult with poorly controlled asthma, defined as an asthmatic receiving inadequate or inappropriate treatment or exhibiting non-compliance, are higher than those for a well controlled asthmatic with the same inherent severity of disease. The possible cost saving if optimal control were achievable for all asthmatics with severe disease is around 45% of the total current $52 million medical cost. This represents a significant potential cost saving to society even without taking into account the improvement in an individual's quality of life or productive output.

TOTAL COSTS BY BEARER

Like the variable cost impact of asthma on individual sufferers, different segments of the economy incur different proportions of the total cost burden. Around 30% of the total cost falls on the private sector (including insurance companies), with the Federal Government assuming responsibility for another 35% and State Governments incurring closer to 20% of the burden. The remaining 15% of the cost burden can be attributed to individual asthmatics and their families.

The economic analysis in this study represents a starting point in improving the understanding of the cost burden of asthma to the community. The total cost, although substantial, is not comprehensive as the potentially significant impact asthma has on an individual's quality of life has been excluded. Over time this total cost estimate will more than likely be refined with the availability of more accurate data and more recognition of the need to fully understand the economic impact of common diseases.

Content Updated 1992