Estimating the Cost of COPD—A Matter of Perspective

“The highest use of capital is not to make more money, but to make money do more for the betterment of life.”

—Henry Ford

In recent years there have been several articles published on the cost of COPD, and two more appear in this issue of the Journal ([1], [2]). This is another positive sign that we have made significant progress in the treatment of this disease. Not long ago, when most physicians believed there was not much that could be done for people suffering from COPD, there was correspondingly very little interest in the financial investment. In a study that compared the number of dollars awarded in 1996 by the U.S. National Institutes of Health for research into the major causes of death to the number of persons dying from those illnesses, COPD came in a distant last place ([3]). Now that new treatments and disease management programs are showing promise of substantially improving quality of life and survival, attitudes towards treatment in COPD are rapidly changing, along with interest in the costs of treatment. We have evolved from an era where the common question was “Can we do any good?” to an era where the question is “How can we do the most good for the most people?”

The article by Foster et al. (page 211) is not only an excellent review of the current literature, it also handles the complexity of examining health care costs in a systematic and well-presented fashion. On a cursory look at the results of the reviewed studies, one might decide that there must be something wrong with at least some of these analyses (see figure, page 215). Their results describe annual costs per COPD patient treated ranging from $1,221 to $8,451 per year, after adjusting for inflation. However, describing the cost of a disease is not the same as describing the cost of a commodity because there is more than just a manufacturer and a consumer involved.

The first thing to consider when examining the cost of a disease is the perspective. Most projects assume the view point of the healthcare provider or payer, such as an insurer or managed care system, and only the costs of specific medical services and treatments, also known as the direct medical costs. The article by Nurmagambetov et al. in this journal (page 203) is an example of this perspective. They collected claims data from a large database of employment-based health insurers for all covered patients between the ages of 35 and 65 who had a diagnosis of COPD. They found average costs per year for each COPD patient ranging from $1,460 in 1999 to $960 in 2003. This figure in itself would seem to be sufficient justification for employment-based health plans to invest in COPD prevention and disease management programs, but direct medical costs do not describe the full cost impact of COPD on a corporation. There is also lost time from sick days, decreased productivity, and early retirement and disability to consider, and not just for the employee, but also the employees' family. One of the unique findings of the Nurmagambetov article is that employers spent more on the costs of COPD treatment for the employees' spouses than for the employees. Articles on direct medical costs can be very precise in their estimates because they are based on actual payments, but their perspective is limited and their results often difficult to generalize.

A radically different perspective on costs is that of the patient. Patients are responsible for the costs of treatment not covered by health insurance, such as co-pays and over-the-counter medications, and for lost revenue due to either their own disability or that of a family member. These are very difficult costs to capture, and few projects have made the attempt—only 2 are cited by the Foster article. A third view is the societal perspective, which could be that of a health policy maker, who may not only be responsible for budgeting for the direct medical cost of COPD (for example, Medicare), but also the costs of COPD-related disability (for example, Social Security for disability benefits and Medicaid for nursing home care). In 2004, the U.S. government paid an estimated $20.9 billion in direct medical costs for COPD, and an additional $16.3 billion in non-medical costs ([4]).

Another source of dramatic variability in COPD cost estimates is due to the different methods for identifying specific costs. The most intuitive approach is to use what is often described as an ‘attributable’ or ‘summation’ method, in which one identifies a range of specific procedures and treatments, such as spirometry, bronchodilators, and oxygen, that can reasonably be assumed to be a directly related to COPD. One then simply identifies the costs for each of these that a COPD patient used during a specified time period and adds them up. The major problem with this approach is that there are many consequences and comorbidities that are not obviously related to COPD that will be missed. For example, depression is very common among persons with COPD; in our case-control study we found that the Lovelace Health System paid more for antidepressants than for antibiotics for its COPD patients ([5]).

In order to capture all of the increases comorbidities and costs that are related to COPD, some investigators have used an ‘excess’ or ‘marginal’ cost approach, wherein COPD patients are matched to similar patients who do not have COPD, and all differences in their utilization and costs are captured. Using this approach on a cohort of COPD patients treated in 1997, we found that expenditures for COPD patients are double those of persons of the same age and gender who do not have COPD, but only approximately half of this increase is directly attributable to pulmonary procedures and treatments ([5]).

Why is precise information about the cost of COPD needed? One major reason is the need to prove the cost-effectiveness of new treatments. The economic impact of treatment is usually described in one of four ways: cost-minimization, cost-benefit, cost-effectiveness, and cost-utility ([6]). Each of these methods are well established and rich in technical detail, but there results are only as good as the specific cost data that is being examined.

Recent articles that have examined the cost effectiveness of various COPD treatments have usually found very favorable results, especially as compared to already standard treatments such as statin therapy for coronary artery disease ([6]). The implications go far beyond the concerns of those who sit on formulary committees and those who fret over rapidly inflating pharmacy budgets. The good news for patients, insurers, and providers is that in COPD, we are able to make money do more to help patients live longer and happier lives.