Lifetime Cost-of-Illness

COI methods also have been used to estimate the per capita lifetime direct costs of different health conditions. Such estimates are useful for calculating incidence-based COI estimates, for conducting cost-effectiveness analysis (especially CEAs related to prevention) and for determining the incremental lifetime costs associated with health-related behaviors such as smoking and obesity. There is a companion literature that assesses the external costs of health-related behaviors, i.e., accounting only for medical and other costs imposed on others by smoking, drinking, physical inactivity etc. Such estimates are useful in determining at what level to set excise taxes or similar incentives to discourage such behavior.


  • B. Alemayehu and K.E. Warner. The Lifetime Distribution of Health Care Costs. Health Services Research 39, no. 3 (2004): 627–642.
  • Hodgson TA. Annual costs of illness versus lifetime costs of illness and implications of structural change. Drug Information Journal 1988;22:323-341.

Lifetime Costs for Selected Conditions

  • Max, Wendy. Rice, Dorothy P.; and MacKenzie, Ellen J. The Lifetime Cost of Injury. Inquiry 1990; 27: 332-343.
  • Nelson S. Hartunian, Charles N. Smart, Mark S. Thompson. The Incidence and Economic Costs of Cancer, Motor Vehicle Injuries, Coronary Heart Disease, and Stroke: A Comparative Analysis. American Journal of Public Health 70, No. 12 (December 1980): 1249-1260 [Abstract]. Incidence figures reported in Table 2 and aggregate COI figures reported in Table 6 (discounted at 6%) can be used to derive lifetime cost figures (direct, indirect, total) for 9 types of cancer (including all cancers), 4 types of CHD (including all CHD), 7 types of MV accidents (including all such accidents) and 4 types of stroke (including all types).
  • Strauss, David, Robert Shavelle and Jordan Brooks. Discounting the cost of future care: Current methods overestimate the present value. Includes a spreadsheet for calculating the correct multiples for determining the remaining lifetime costs of care for autism, cerebral palsy (CP), Down syndrome, spinal cord injury (SCI), traumatic brain injury (TBI), and vegetative state.
  • T.N. Taylor et al., Lifetime Cost of Stroke in the United States. Stroke 1996; 27(9): 1459–1466.

Lifetime Costs for Elderly

  • A.M. Garber, T.E. MaCurdy, and M.B. McClellan. Medical Care at the End of Life: Diseases, Treatment Patterns, and Costs. NBER Working Paper no. 6748 (Cambridge, Mass.: NBER, October 1998).
  • A.M. Garber, T.E. MaCurdy, and M.B. McClellan. Persistence of Medicare Expenditures among Elderly Beneficiaries. NBER Working Paper no. 6249 (Cambridge, Mass.: National Bureau of Economic Research, October 1997).
  • D.R. Hoover, C. Stephen, K. Rizie, U. Sambamoorthi, J.C. Cantoret. 2002. Medical expenditures during the last year of
    life: findings from the 1992– 1996 medicare current beneficiary survey. Health Services Research 37 (6), 1625–1642.
  • Geoffrey F. Joyce, Emmett B. Keeler, Baoping Shang, and Dana P. Goldman. The Lifetime Burden Of Chronic Disease Among The Elderly. Health Affairs Web Exclusive, September 26, 2005. [Abstract] The high costs of treating chronic diseases suggest that reducing their prevalence would improve Medicare’s financial stability. In this paper we examine the impact of selected chronic diseases on the distribution of health spending and its variation over the course of disease. We also use a microsimulation model to estimate these conditions’ impact on life expectancy and health spending from age sixty-five to death. A sixty-five-year-old with a serious chronic illness spends $1,000–$2,000 more per year on health care than a similar adult without the condition. However, cumulative Medicare payments are only modestly higher for the chronically ill because of their shorter life expectancy. This analysis includes remaining lifetime costs for seven high-prevalence or high-cost conditions (or both): hypertension, diabetes, cancer (excluding skin), chronic obstructive pulmonary disease (COPD), acute myocardial infarction (AMI), coronary heart disease (CHD), and stroke. Their definition of cancer includes lung, breast, prostate, colon, uterine, throat, bladder, kidney, and brain cancer. COPD is a category of respiratory illness that includes chronic bronchitis, emphysema, and some forms of asthma.
  • J. Lubitz et al. Health, Life Expectancy, and Health Care Spending among the Elderly. New England Journal of Medicine 349, no. 11 (2003): 1048–1055.
  • Lakdawalla DN, Goldman DP, Shang B. The Health and Cost Consequences of Obesity Among the Future Elderly. Health Affairs—Web Exclusive, September 26, 2005, pp. W5-R30–W5-R41.

Lifetime Costs of Health-Related Behaviors

Lifetime Medical Costs

  • Hodgson TA. Cigarette smoking and lifetime medical expenditures. Milbank Quarterly 1992;70:81-125.
  • Thompson D et al. Lifetime health and economic consequences of obesity. Archives of Internal Medicine. 1999; 159:2177–2183.
  • P.H. van Baal, J.J. Polder, G.A. de Wit, et al. Lifetime medical costs of obesity: prevention no cure for increasing health expenditures. PLoS Med (2008) 5:29. [Abstract]
  • Eric A. Finkelstein, Justin G. Trogdon, Derek S. Brown, Benjamin T. Allaire, Pam S. Dellea and Sachin J. Kamal-Bahl. The Lifetime Medical Cost Burden of Overweight and Obesity: Implications for Obesity Prevention. Obesity 2008; 16 (8): 1843–1848. [Full Text]
  • Schackman, B. R., Gebo, K. A., Walensky, R. P., Losina, E., Muccio, T., Sax, P. E., Weinstein, M. C., Seage, G. R., Moore, R. D., and Freedberg, K. A. (2006). The lifetime cost of current human immunodeficiency virus care in the United States. Medical Care, 44, 990-997.
  • Strauss DJ, Shavelle RM, Pflaum C, Bruce C (2001). Discounting the cost of future care for persons with disabilities. Journal of Forensic Economics, 14:79-87.
  • Strauss DJ, Shavelle RM, Pflaum C, Bruce C (2000). Incorporating the effect of reduced life expectancy into awards for future costs of care. The Expert Witness, Winter 2000, volume 5, number 4.

External Costs

  • W.G. Manning et al. The Taxes of Sin: Do Smokers and Drinkers Pay Their Way? Journal of the American Medical Association 1989; 261 (11): 1604–1609.
  • W.G. Manning et al., eds., The Costs of Poor Health Habits (Cambridge, MA: Harvard University Press, 1991).

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