# Presentation: 492334

## Economic Costs of Fetal Alcohol Spectrum Disorders

- by**Henrick Harwood**

**FASD Field Trainers Meeting**
**Orlando, Florida****December 2, 2005**

## Overview

- FAS costs US $4.6 billion in 2004
- About $17 per capita; $17,000 per FAS
- US has up to 41,000 alcohol impacted (FASD) births/yr. or about 4,100 FAS births
- An FAS birth carries lifetime health/special ed costs of  $753,000 ($258,000 today) although can be as high as $3.7 million ($1.4 million)
- Including quality of life, FAS prevention may be “cost effective” at up to $516,000 per child
- FAS is among the most costly birth defects
- State FAS cost estimates are presented

## Economic Costs of Alcohol Abuse1

- $184.6 B in 1998;  $670 per capita; 2.1% of GDP
- Medical consequences of  FAS		$2.9
- Lost earnings due to FAS		$1.2
- Specialty alcohol services		$7.5
- Medical consequences, other		$16.0
- Lost earnings, mortality			$36.5
- Lost earnings, morbidity		$86.4
- Lost earnings, crime/victims		$10.1
- Crashes, fires, justice			$24.1

*1** Source: Harwood, H. Updating Estimates of the Economic Costs of Alcohol Abuse in the United States: Estimates, Update Methods,**and Data. Report prepared by The Lewin Group for the National Institute on Alcohol Abuse and Alcoholism, 2000. Available at http://www.niaaa.nih.gov.*

## This Effort

- Develop new estimates for FASD
- Update prior estimates by The Lewin Group (1998)
- Cost to the US of FAS in a year
- Review of literature by C. Lupton of NGIT
- Update and extend analyses published in 1986
- Cost of a “child born with FAS”
- Address cost effectiveness, quality adjusted life years and willingness to pay

## General Findings from the Literature

- The majority of the literature focuses solely on FAS
- Literature related to FAE is limited
- ARBD and ARND are rarely mentioned
- Cost estimates for treatment services related to FAS vary considerably

## Different Types of Economic Studies

- Cost of illness
- Cost effectiveness
- Cost benefits

## Concepts Behind Cost of Illness

- Assess overall burden on the economy in use and loss of resources per year
- Consequences (epidemiology)
- Primary and comorbid health, social/justice system
- Causality (epidemiology)
- Attribution factors
- Costs (economics)
- Approach to valuation, discounting

## COI Often Called “Gee Whiz” Numbers

- More readily grasped than a large variety of diverse impact estimates: a single number
- These numbers can be “large”
- Attention commanding
- Can be compared to other budgets and problems
- Suggest something SHOULD be done
- Do not tell us WHAT should be done
- Prevention versus treatment or other strategies

## Components of Economic Costs

- Direct Costs (actual use of goods and services)
- Health system (physical and mental)
- Educational, social, justice systems (not transfers)
- Indirect Costs (foregone potential productivity)
- Mortality
- Morbidity/disability
- Incarceration/crime career
- Intangible Costs
- Loss of quality of life, experience of pain and suffering
- _Not generally included in cost of illness estimates _

## Prevalence of FASD

- “At risk” drinking women 18-44 years (past month) (CDC’s BRFSS)
- Binge (5+ drinks/occasion): 13.4%
- Heavy (more than 1 drink/day): 5.8%
- Binge or heavy: 14.9%
- FAS prevalence range:
- 0.5 to 2.0 cases per 1,000 live births
- FAE believed much more prevalent than FAS
- up to 10 in 1,000 live births for FAS and FAE

## Lifetime Prevalence of Secondary Disabilities for FAS versus FAE

**96%**

**92%**

**41%**

**28%**

**54%**

**44%**

**55%**

**44%**

**67%**

**51%**

**68%**

**51%**

- Streissguth et al. 1996

## Valuation of Indirect Disease Burden

- Deaths
- Morbidity: sickness; lost days; impaired days
- Human capital
- Current market value of productivity
- Present discounted value lost future productivity
- Willingness to pay (up to $6 million/life)
- Quality adjusted life years (QALY) ($50-100,000)
- Disability adjusted life years (DALY)
- Years of potential life lost (YPLL)

## Economic Cost of FAS in U.S., in 2004

- National
- Direct: 	$2.66 billion
- Indirect: 	$1.90 billion
- Total: 	$4.56 billion

## Major Direct Cost Components

## Major Direct Cost Components (cont.)

## Direct Costs per Year, per FAS Case

**Age**

**Health Cost/Year**

## Lifetime Direct Costs of a Person with FAS

- Direct costs
- Average 		$753,000
- Maximum 	$3.7 million
- Discounted Lifetime (3%)
- Average: 	$258,000
- Maximum: 	$1.3 million

## Indirect Costs of FAS

- Value of lost potential productivity
- Human capital approach (PHS Guidelines)
- Age/gender adjusted valuation: over $60,000/yr
- In 2003 expected > $2.5 million at birth
- Discounted $1.1 million
- Mental disability/retardation due to FAS related to 20.5% reduction
- $218,500 lifetime discounted loss per child

## Indirect Costs of FAS

- Due to mental disability
- 294,000 persons with FAS
- 73,000 under 18 years; 221,000 over 17
- Lost potential productivity worth $1.9 billion in 2004
- 		_Incidence _    	_% Prod. Reduction_

- Severe 	2.5%	100.0%
- Moderate	6.0%	50.0%
- Mild	39.0%	25.0%
- Minimal	52.5%	10.0%
- Average	100.0%	20.5%

## Source: MMWR Dec. 24, 2004/ 53(50); 1178-1181 

- Source: MMWR Dec. 24, 2004/ 53(50); 1178-1181

## State Patterns of “At Risk” Drinking

- “At risk” means binge or heavy drinking in past month

## State Rates of Female “At Risk” Drinking Females age 18-44 years, Past Month Binge or Heavy Drinking

- Estimated from 2002 BRFSS; U.S. average was 14.9%, or 8.4 million females

## FAS Annual Costs by State, 2004($ in millions)

## Are FAS InterventionsWorth Supporting?

- IOM and NIAAA: very little strong research
- Haven’t rigorously evaluated particular preventions
- However, can look at potential benefit from successful prevention (Harwood and Napolitano, 1986)
- What will benefits/savings be if save 1 child?

## Cost Effectiveness

- Standard allows comparison across all of health (PHS Taskforce; Gold et al., 1996)
- Compares medical interventions on the basis of cost to save a quality adjusted life year (QALY)
- Medical interventions costing <$50,000/QALY are “generally” considered “cost effective”

## Quality of Life Preference Scores

- Perfect health: 	1.0
- Moderate disability: 	.50
- Death/vegetativestate:	0.0
- Gen. pop. 35-39:   	.86
- Gen. pop. > 75 years:  	.71
- Congest. heart failure:  	.20
- Legal blindness:  	.48
- Profound deafness: 	.59

- Depression: 	.31
- Schizophrenia: 	.31-.61
- Children withdevelopmental disability
- Severe: 	.40
- Moderate: 	.60
- Mild 	.80
- Reading disability:  	.77

- Harvard Center for Risk Analysis, on-line catalog of
- published disease state preference scores

## Impact of FAS on Quality of Life

- Conservative estimate: FAS reduces QALY by 17% or 11 years
- Potential savings from preventing 1 case of FAS:
- $550,000 in total value of QALY
- $258,000 in discounted value of QALY
- If an intervention costs less than $516,000 per FAS case prevented (discounted indirect plus direct costs), it would be considered “generally cost effective”

## Comparison of Birth Defect Costs

- Lifetime costs of a birth with FAS $516,000
- $2 billion for a birth cohort (for 4,000 FAS cases)
- A study published by CDC estimated costs of birth defects in 1992 at $8 billion ($12-15 billion now)
- Prematurity costs about $16 billion/year
- Spina bifida and anencephaly  > $750,000/birth
- Mental retardation & cerebral palsy >$900,000/birth
- Vision and hearing defects cost $400-600,000/birth

## Summary

- FAS costs US $4.6 billion in 2004
- An FAS birth carries lifetime direct costs of  $753,000 ($258,000 today) although can be as high as $3.7 million
- FAS costs/birth similar to other severe birth defects
- Costs vary widely by state, based on size and rates of female “at risk” drinking (CA $581 mil. WY $9 mil.)
- Costs probably low: need better data on FAE, mental health, criminal justice
- Even “expensive” FAS prevention may be “cost effective”: up to $516,000 per child