Costs of Illness for Environmentally 

Related Health Effects 

in Older Americans 

Final Report 

Prepared for 

Kathy Sykes 

Senior Advisor, Aging Initiative 

Office of Children’s Health Protection 

EPA (Mail Code 1107A) 

1200 Pennsylvania Ave. NW 

Room 2512N (Ariel Rios North) 

Washington, DC 20460 

(202) 564-3651 

FAX (202) 564-2733 

Prepared by 

George Van Houtven 

Amanda Honeycutt 

Boyd Gilman 

Nancy McCall 

Wanda Throneburg 

RTI International 

Health, Social, and Economics Research 

Research Triangle Park, NC 27709 

RTI Project Number 08687.029.001 

April 2005 
RTI Project Number

 08687.029.001 

Costs of Illness for Environmentally 

Related Health Effects 

in Older Americans

Final Report 

April 2005 

Prepared for 

Kathy Sykes 

Senior Advisor, Aging Initiative 

Office of Children’s Health Protection 

EPA (Mail Code 1107A) 

1200 Pennsylvania Ave. NW 

Room 2512N (Ariel Rios North) 

Washington, DC 20460 

(202) 564-3651 

FAX (202) 564-2733 

Prepared by 

George Van Houtven 

Amanda Honeycutt 

Boyd Gilman 

Nancy McCall 

Wanda Throneburg 

RTI International* 


Health, Social, and Economics Research 


Research Triangle Park, NC 27709 


*RTI International is a trade name of Research Triangle Institute. 
Table of Contents 


Section	 Page 

1. Introduction...................................................................................................................................1-1


2. Background ...................................................................................................................................2-1


2.1 Selection of Health Effects..................................................................................................2-1


2.2 Overview of the COI Approach ..........................................................................................2-3


2.3 COI Literature Review ........................................................................................................2-3


2.4 Discussion ...........................................................................................................................2-4


3. Cost Analysis Data and Methods ..................................................................................................3-1


3.1 Direct Costs .........................................................................................................................3-1


3.1.1	 Medical Costs.........................................................................................................3-1


3.1.2	 Self-Administered Prescription Drug Costs ...........................................................3-3


3.1.3	 Nursing Home Costs ..............................................................................................3-4


3.2 Indirect Costs.......................................................................................................................3-5


3.2.1	 Increased Morbidity ...............................................................................................3-5


3.2.2	 Premature Mortality ...............................................................................................3-6


4. Cost-of-Illness Estimates for Selected Conditions in Older Americans .......................................4-1


4.1 Chronic Lung Disease .........................................................................................................4-1


4.1.1	 Direct Costs: Medical............................................................................................4-1


4.1.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ........................................................................................................................4-1


4.1.3	 Indirect Costs: Morbidity ......................................................................................4-3


4.1.4	 Indirect Costs: Mortality .......................................................................................4-3


4.2 Ischemic Heart Disease .......................................................................................................4-4


4.2.1	 Direct Costs: Medical............................................................................................4-4


4.2.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ........................................................................................................................4-5


4.2.3	 Indirect Costs: Morbidity ......................................................................................4-6


4.2.4	 Indirect Costs: Mortality .......................................................................................4-7


4.3 Stroke ..................................................................................................................................4-7


4.3.1	 Direct Costs: Medical............................................................................................4-8


4.3.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ........................................................................................................................4-8


4.3.3	 Indirect Costs: Morbidity ......................................................................................4-9


4.3.4	 Indirect Costs: Mortality .....................................................................................4-10


4.4 Lung Cancer ......................................................................................................................4-10


4.4.1	 Direct Costs: Medical..........................................................................................4-11


4.4.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ......................................................................................................................4-11


4.4.3	 Indirect Costs: Morbidity ....................................................................................4-12


4.4.4	 Indirect Costs: Mortality .....................................................................................4-13


4.5 Pneumonia .........................................................................................................................4-13


4.5.1	 Direct Costs: Medical..........................................................................................4-14


iii 
4.5.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ......................................................................................................................4-14


4.5.3	 Indirect Costs: Morbidity ....................................................................................4-16


4.5.4	 Indirect Costs: Mortality .....................................................................................4-16


4.6	 Gastrointestinal Illness ......................................................................................................4-16


4.6.1	 Direct Costs: Medical..........................................................................................4-17


4.6.2	 Direct Costs: Self-Administered Prescription Drugs and Nursing Home


Care ......................................................................................................................4-17


4.6.3	 Indirect Costs: Morbidity ....................................................................................4-18


4.6.4	 Indirect Costs: Mortality .....................................................................................4-19


5. Discussion of Results ....................................................................................................................5-1


6. References .....................................................................................................................................6-1


Appendixes 

A: 	 Summaries of Methods, Data Sources, and Findings by Disease ......................................A-1 


B: 	 Detailed Methods for Estimating Missed Work Days and Bed Days Attributable to 


Stroke, Heart Disease, and Chronic Lung Disease............................................................. B-1 


C: 	 Annual Medicare Payments in 2000 by Region and State ................................................. C-1 


iv 
List of Tables 


Number	 Page 

1-1	 Estimated Aggregate Annual Costs of Illness Among Older Americans for Selected 


Health Conditions in 2000 (in millions of 2000$) ........................................................................1-2


2-1	 Selected Health Conditions (by ICD-9 Code) ..............................................................................2-2


4-1	 Costs of Illness Associated with Chronic Lung Disease—Estimated Aggregate Costs in 


2000 for Individuals 65 and Older ................................................................................................4-1


4-2	 Direct Medical Costs Associated with Chronic Lung Disease—Number of Beneficiaries 


and Average Medical Payments by Type of Service and Age-Gender Category .........................4-2


4-3	 Other Direct Costs Associated with Chronic Lung Disease—Incremental Cost Estimates 


for Prescription Medications and Nursing Home Services by Age-Gender Category..................4-2


4-4	 Morbidity-Related Indirect Costs Associated with Chronic Lung Disease—Estimated 


Annual Per-Person Productivity Losses by Age-Gender Category ..............................................4-3


4-5	 Mortality-Related Indirect Costs Associated with Chronic Lung Disease—Estimated 


Aggregate Productivity Losses by Age Category .........................................................................4-4


4-6	 Costs of Illness Associated with Ischemic Heart Disease—Estimated Aggregate Costs in 


2000 for Individuals 65 and Older ................................................................................................4-4


4-7	 Direct Medical Costs Associated with Ischemic Heart Disease—Number of Beneficiaries 


and Average Medical Payments by Type of Service and Age-Gender Category .........................4-5


4-8. Other Direct Costs Associated with Ischemic Heart Disease—Incremental Cost Estimates


for Prescription Medications and Nursing Home Services by Age-Gender Category..................4-6


4-9	 Morbidity-Related Indirect Costs Associated with Ischemic Heart Disease—Estimated 


Annual Per-Person Productivity Losses by Age-Gender Category ..............................................4-6


4-10	 Mortality-Related Indirect Costs Associated with Ischemic Heart Disease—Estimated 


Aggregate Productivity Losses by Age Category .........................................................................4-7


4-11	 Costs of Illness Associated with Stroke—Estimated Aggregate Costs in 2000 for 


Individuals 65 and Older...............................................................................................................4-7


4-12	 Direct Medical Costs Associated with Stroke—Number of Beneficiaries and Average 


Medical Payments by Type of Service and Age-Gender Category ..............................................4-8


4-13	 Other Direct Costs Associated with Stroke—Incremental Cost Estimates for Prescription 


Medications and Nursing Home Services by Age-Gender Category ...........................................4-9


4-14	 Morbidity-Related Indirect Costs Associated with Stroke—Estimated Annual Per-Person


Productivity Losses by Age-Gender Category .............................................................................4-9


4-15	 Indirect Costs Resulting from Increased Mortality Associated with Stroke—Estimated 


Aggregate Productivity Losses by Age Category .......................................................................4-10


v 
4-16	 Costs of Illness Associated with Lung Cancer—Estimated Aggregate Costs in 2000 for 


Individuals 65 and Older.............................................................................................................4-10


4-17	 Direct Medical Costs Associated with Lung Cancer—Number of Beneficiaries and 


Average Medical Payments by Type of Service and Age-Gender Category..............................4-11


4-18	 Other Direct Costs Associated with Lung Cancer—Incremental Cost Estimates for


Prescription Medications and Nursing Home Services by Age-Gender Category .....................4-12


4-19	 Morbidity-Related Indirect Costs Associated with Lung Cancer—Estimated Annual Per-


Person Productivity Losses by Age-Gender Category................................................................4-13


4-20	 Mortality-Related Indirect Costs Resulting Associated with Lung Cancer—Estimated 


Aggregate Productivity Losses by Age Category .......................................................................4-13


4-21	 Costs of Illness Associated with Pneumonia—Estimated Aggregate Costs in 2000 for 


Individuals 65 and Older.............................................................................................................4-14


4-22	 Direct Medical Costs Associated with Pneumonia—Number of Beneficiaries and 


Average Medical Payments by Type of Service and Age-Gender Category..............................4-15


4-23	 Other Direct Costs Associated with Pneumonia—Incremental Cost Estimates for 


Prescription Medications and Nursing Home Services by Age-Gender Category .....................4-15


4-24	 Mortality-Related Indirect Costs Associated with Pneumonia—Estimated Aggregate 


Productivity Losses by Age Category.........................................................................................4-16


4-25	 Costs of Illness Associated with Gastrointestinal Illness—Estimated Aggregate Costs in 


2000 for Individuals 65 and Older ..............................................................................................4-16


4-26	 Direct Medical Costs Associated with Gastrointestinal Illness—Number of Beneficiaries 


and Average Medical Payments by Type of Service and Age-Gender Category .......................4-17


4-27	 Other Direct Costs Associated with Gastrointestinal Illness—Incremental Cost Estimates 


for Prescription Medications and Nursing Home Services by Age-Gender Category................4-18


4-28	 Mortality-Related Indirect Costs Associated with Gastrointestinal Illness—Estimated 


Aggregate Productivity Losses by Age Category .......................................................................4-19


vi 
1. Introduction 

With the U.S. population expected to age rapidly over the next half century, environmental health 

effects among older Americans are becoming an increasingly important public health concern. Forecasts 

suggest that the elderly population is likely to grow to 70 million people by 2030, and the number of 

individuals over 85 years is expected to increase to 19 million by 2050—an almost fivefold increase 

between 2000 and 2050. 

For several reasons, a rapidly growing elderly population presents unique challenges in the area 

of environmental health. First, because of diminished immunity associated with aging, older adults are 

often more susceptible than younger adults to environmental hazards. Second, the prevalence of diseases 

that can further compromise immunity, such as Alzheimer’s and diabetes, tend to be highest among the 

elderly. Finally, older persons have accumulated a lifetime of exposures that persist in the body and may 

manifest as health problems long after the time period of exposure. 

The U.S. Environmental Protection Agency’s (EPA’s) Aging Initiative has been established 

precisely to address these challenges. EPA launched the Aging Initiative in 2002 to “prioritize and study 

environmental health hazards to older persons and examine the effect that a rapidly growing aging 

population will have on our environment” (EPA, 2003). Through this initiative, the Agency is developing 

a national agenda on the environment and aging, with efforts focused on research that could lead to 

developing and implementing policies to better protect older Americans from the health effects of 

environmental exposures. One such research effort is to develop a better understanding of the burden of 

disease associated with environmental exposures among the elderly. 

The purpose of this report is to contribute to this research effort by assessing the economic burden 

of specific illnesses among the elderly. The analysis focuses on health conditions for which 

environmental exposure are known or suspected to be an important contributing factor. In particular, we 

analyzed costs for specific health conditions within the following six illness categories: 

• chronic respiratory disease • lung cancer 

• heart disease • pneumonia 

• stroke • gastrointestinal illness 

In Section 2, we provide a more detailed description of the specifically selected health conditions, 

and we also discuss the main reasons for selecting these conditions. The discussion in Section 2 includes 

a summary of the evidence linking these conditions with environmental exposures. 

To assess the economic burden of the selected illnesses among the elderly, we applied a cost-of 

illness (COI) approach. This approach is well established in the field of health valuation and has been 

widely applied to assess losses for a variety of illnesses. In Section 2 we describe the conceptual 

framework underlying COI and the primary issues associated with conducting this type of analysis. We 

also summarize the evidence from previous COI research related to these conditions. Although we 

identified over 20 articles published since 1990 that have estimated costs for these (or related) conditions, 

the methods and results of these studies varied widely and few of them specifically focused on health 

effects in older Americans. Our analysis was designed to address the limitations and gaps in this 

literature. 

By applying a consistent set of COI methods, data sources, and disease classifications and by 

limiting our attention to older Americans, our analysis provides estimates of the burden of illness that are 

directly comparable across conditions and are targeted to the population of interest for EPA’s Aging 

Initiative. Based on available data, we estimated the main health care costs (direct costs) and productivity 

losses (indirect costs) associated with the prevalence of the six conditions among adults 65 years and 

older in 2000. In Section 3, we describe the data and the methods we used to construct our cost estimates. 

To estimate direct costs associated with each condition, we primarily relied on Medicare claims data from 

a nationally representative sample of Medicare fee-for-service beneficiaries. We supplemented these 

direct cost estimates using national survey data to estimate incremental prescription drug (self1-1

administered) and nursing home costs. To estimate indirect costs, we combined national health and 

earnings data to estimate both morbidity and mortality related productivity losses for the 65 and older 

population. Section 3 also describes the main limitations and caveats associated with these data and 

methods, which must be kept in mind when interpreting the results. 

It is important to emphasize that the cost estimates developed with these approaches should not 

be interpreted as those specifically attributable to environmental exposures. Unfortunately, the science 

and empirical evidence regarding the epidemiological links between environmental exposures and these 

health outcomes are not sufficiently advanced to reliably estimate this attributable fraction. 

Consequently, the results are more appropriately interpreted as upper-bound estimates of environmentally 

related costs of illness for these conditions. 

Section 4 describes the results separately for each of the six health categories. We break down 

medical costs by type of medical service (e.g., inpatient, physician visits, hospital outpatient) and by age 

and gender category. Estimates of prescription drug and nursing home costs are separately reported by 

age and gender category. The indirect costs are divided into losses associated with morbidity and those 

due to mortality, and they are also subdivided according to age and gender category. 

Table 1-1 summarizes 

our results by reporting Table 1-1. Estimated Aggregate Annual Costs of Illness 

estimated aggregate direct and Among Older Americans for Selected Health 

indirect costs for each of the six Conditions in 2000 (in millions of 2000$) 

illness categories. Comparisons 

of these aggregate cost 

estimates across illness 

categories must be made with 

caution. Due to data 

limitations, certain components 

of direct and indirect costs 

could not be reliably estimated 

for different illnesses (see 

footnotes to Table 1-1). 

Nevertheless, the results clearly 

suggest that chronic lung 

disease and ischemic heart a

Does not include nursing home costs. 

disease are the two categories of b

Does not include self administered prescription drug or nursing home costs. 

illness with the largest c

Does not include lost household productivity for morbidity. aggregate costs in 2000. The d

Does not include any morbidity related productivity losses. 

Chronic Lung Ischemic Heart 

Disease Disease Stroke 

Direct Costs 27,294 42,239 11,840a 

Indirect Costs 6,605 7,913 6,292 

Total Costs 33,898 50,152 18,133 

Gastrointestinal 

 Lung Cancer Pneumonia Illness 

Direct Costs 4,277b 10,936 1,006a 

Indirect Costs 173c 4.7d 0.039d 

Total Costs 4,450 10,941 1,006 

point estimate for chronic lung 

disease exceeds $35 billion and, even without nursing home costs included, the point estimate for 

ischemic heart disease is close to $52 billion. Gastrointestinal illness is estimated to impose the lowest 

aggregate cost of the six conditions, but even without estimates of nursing home or morbidity related 

productivity losses, its aggregate costs are estimated to exceed $1 billion. For each of the six conditions, 

direct medical costs comprise the largest component of estimated aggregate costs. 

The numbers reported in Table 1-1 represent our best point estimates of aggregate costs for the 

selected illnesses; however, these estimates are best interpreted as midpoints within a range of 

uncertainty. This uncertainty arises from several different sources and for several different reasons which 

are discussed throughout the report and summarized in the concluding section (Section 6). To partially 

quantify this uncertainty, the results described in Section 4 also include confidence intervals for several of 

the key values that went into constructing the aggregate cost estimates. 

1-2

2. Background 

Several of the most prevalent and costly adverse health conditions among older Americans— 

including chronic respiratory disease, heart disease, cerebrovascular disease, cancer, 

pneumonia/influenza, and gastrointestinal illness—are known to be associated, at least in part, with 

environmental exposures. To improve understanding of the magnitude of the cost burden imposed by 

these types of environmentally related health effects among older Americans, we selected specific health 

conditions for economic analysis. In this section, we define the selected conditions and discuss why they 

were chosen for this analysis. We also provide a general description of the COI method, and we review 

the existing evidence from the COI literature regarding the direct and indirect costs associated with the 

selected conditions. We then discuss the limitations of using results from the existing literature for 

assessing the direct and indirect costs of conditions related to environmental exposures in older adults. 

2.1 Selection of Health Effects 

Some of the key considerations in selecting conditions for analysis were: 

• prevalence among the older population, 

• expected average costs associated with illness, 

• evidence of linkages to environmental exposures, and 

• data availability. 

We targeted conditions that were expected to impose a relatively high burden (through high 

prevalence and/or high cost) among the elderly and conditions for which environmental exposures are 

expected to be important risk factors. Using the commonly applied International Classification of Disease 

(ICD-9) system for coding illnesses, we also defined conditions in a way that could be easily identified 

and matched from multiple data sources. 

Table 2-1 lists the selected health conditions according to their ICD-9 codes and groups the 

conditions into six general categories of illness. The first category—chronic respiratory illness—is 

common among older Americans and strongly associated with indoor and outdoor air-quality conditions. 

Based on data for the Centers for Disease Control and Prevention (Lucas et al., 2004), in 2001, 6.7 

percent of the 65 and older population suffered from chronic bronchitis and 5.1 percent suffered from 

emphysema, compared to 5.3 and 0.8 percent respectively for those under 65. Prevalence of asthma 

among the elderly (8.7 percent) is lower than in children and young adults; however, the illness is 

typically more severe in older age groups. Exposures to common air pollutants, such as particulate matter 

(PM) and ozone, have been found in several studies to cause and/or exacerbate these conditions.1 

Coronary heart disease, including heart attacks and angina pectoris, is among the most common 

conditions among the 65 and older population in the U.S., affecting roughly 21 percent of this population 

in 2001. Several studies have also shown that exposures to common pollutants such as PM can increase 

risks associated with heart disease, and exposures to less common toxic pollutants such as lead have also 

been found to increase these risks. Because of the chronic nature of both heart disease and chronic 

respiratory disease, both diseases are expected to be associated with frequent and costly health-care 

utilization. 

The prevalence of stroke is also very high among seniors, affecting 9 percent of the 65 and older 

population in 2001. In that same year, more than 404,000 Medicare fee-for-service beneficiaries were 

admitted to the hospital with a primary diagnosis of stroke (Trisolini et al., 2002). The Medicare hospital 

payments associated with those admissions were quite high—approximately $2 billion in 2001. Because 

1

 For a summary of the epidemiological evidence regarding links between common air pollutants and 

respiratory and cardiovascular illness, see for example EPA (1999). 

2-1

stroke victims often require a 

great deal of therapy and care 

beyond the initial hospital 

admission, the full cost of stroke 

among older Americans is likely 

to be much higher than $2 

billion. Regarding the 

environmental etiology of stroke, 

studies have shown that 

exposures to pollutants such as 

PM, ozone, and lead may 

increase risks of stroke-related 

deaths (ATSDR, 1999). 

Lung cancers, which 

according to CDC estimates 

(Lucas et al., 2004) affect less 

than one percent of the 65 and 

older population, are less 

prevalent in the elderly 

population than other conditions 

and certain other cancers. 

Nevertheless, lung cancers have 

the 2nd highest prevalence of 

cancers among those 65 and 

older, and it is known to impose 

significant costs on a per case 

basis. Furthermore, links 

between environmental 

exposures and lung cancers are 

well established. Known or 

suspected environmental causes 

of lung cancer include, among 

others, exposures to PM (Pope et 

al., 2002), asbestos (ATSDR, 

2001), and radon (ATSDR, 

1990). 

Pneumonia is a relatively 

high-prevalence condition 

among older individuals, but 

Table 2-1. Selected Health Conditions (by ICD-9 Code) 

ICD-9 Code Health Condition 

Chronic Lung Disease 

491 Chronic bronchitis 

492 Emphysema 

493 Asthma 

494 Bronchiectasis 

496 Chronic airway obstruction, not elsewhere classified 

Ischemic Heart Disease 

410 Acute myocardial infarction 

411 Other acute and subacute forms of ischemic heart 

disease 

412 Old myocardial infarction 

413 Angina pectoris 

414 Other forms of chronic ischemic heart disease 

 Stroke 

430 Subarachnoid hemorrhage 

431 Intracerebral hemorrhage 

432 Other and unspecified intracranial hemorrhage 

433 Occlusion and stenosis of precerebral arteries 

434 Occlusion of cerebral arteries 

436 Acute, but ill-defined, cerebrovascular disease 

 Lung Cancer 

162.2–162.9 Malignant neoplasm of bronchus and lung 

197 Secondary malignant neoplasm of respiratory and 

digestive systems 

231 Carcinoma in situ of respiratory system

 Pneumonia 

480 Viral pneumonia 

481 Pneumococcal pneumonia 

482 Other bacterial pneumonia 

483 Pneumonia due to other specified organism 

485 Bronchopneumonia, organism unspecified 

486 Pneumonia, organism unspecified 

487 Influenza with pneumonia 

 Gastrointestinal Illness 

001–009* Intestinal Infectious Diseases 

558.9 Other and unspecified noninfectious gastroenteritis and 

colitis 

*Excluding 008.45 (Clostridium difficile colitis) 

more importantly, when older individuals are afflicted with this condition, they generally require more 

costly medical care than younger individuals. Among Medicare fee-for-service beneficiaries, the rate of 

hospital admission for pneumonia (and/or influenza) was 20 per 1,000 in 2001.2 The annual cost of 

hospitalizations related to pneumonia is also typically very high, and pneumonia infections are also more 

likely to result in death when elderly persons become infected. As with chronic lung disease, exposures 

to common air pollutants, such as PM and ozone, have been found in several studies to cause and/or 

exacerbate pneumonia. 

2

 Age- and gender-adjusted; based on RTI analysis of the Medicare Quality Monitoring System special 

analytical files (Trisolini et al., 2002). 

2-2

Gastrointestinal illness (GI) is common in all age groups in the U.S.; however, the elderly face 

particularly high risks of hospitalization and death due to GI. According to discharge statistics for 1979– 

1995, hospitalization rates for GI were more than twice as high for those older than 65, and over 75 

percent of hospital deaths from diarrheal disease were among this age group (Mounts et al., 1999). 

Exposures to waterborne pathogens are suspected to be significant contributors to overall rates of GI 

(Morris and Levin, 1995; Payment et al., 1991; and Bennett et al., 1987), although the attributable fraction 

is highly uncertain. 

2.2 Overview of the COI Approach 

The COI approach may be used to assess both direct and indirect costs of illness. Direct costs 

represent the dollar value of goods and services consumed as a result of illness and for which payment is 

made. They include payments for treatment, diagnosis, continuing care, rehabilitation, and terminal care 

and are typically measured as costs related to hospital stays, physician services, nursing homes, 

prescription drugs, and in-home health care services. Indirect costs represent costs for which no payment 

changes hands but for which an economic effect is still observed. They include primarily productivity 

losses associated with illness and premature death, and are typically measured as the value of lost 

productivity (labor and household) due to illness. 

Most COI studies use a prevalence-based approach for estimating costs. Prevalence-based cost 

estimates include all costs related to a condition for the prevalent population over a given time period, 

usually a year. This approach includes costs for newly diagnosed cases as well as for those in the 

advanced stage of disease. Prevalence-based COI estimates are useful primarily for quantifying and 

highlighting the burden of a particular disease or condition. Incidence-based COI estimates represent the 

lifetime cost of disease, from onset to death. Incidence-based estimates require a great deal of data on 

disease progression in addition to costs at each stage of disease, and provide a useful measure of the cost 

savings of preventing or delaying onset of a disease for use in economic evaluations of preventive 

interventions. Because EPA is currently interested in understanding and quantifying the burden of 

diseases associated with environmental exposures in older Americans, a prevalence-based approach is 

most appropriate. 

In this study, we used a prevalence-based approach to develop COI estimates that focus on the 

direct costs and labor, as well as household productivity losses, associated with each of the six conditions 

of interest. Our methods and data sources for the COI analysis are described in Section 3, and results are 

shown and described in Section 4. 

2.3 COI Literature Review 

Prior to generating our own estimates of the costs associated with heart disease, stroke, chronic 

lung disease, lung cancer, pneumonia, and gastrointestinal illness in individuals older than 65 years, we 

reviewed the literature on the costs of these conditions. We initially searched MEDLINE and PubMED to 

identify articles on the cost, cost-of-illness, expenditure, or economic impact or burden of each of the 

health conditions in a U.S. population 65 years and older. We limited our review to articles that were 

published in peer-reviewed journals from 1990 to the present. Following the decision to focus on the 

specific conditions and associated ICD-9 codes listed in Table 2-1 for COI analysis, we refined our 

literature search to include only those conditions. However, we also eliminated the requirement that 

studies provide cost estimates specifically for the 65 and older population. Our final review of articles on 

the six conditions consisted of 24 articles on the direct or indirect costs of chronic lung disease, 7 on heart 

disease, 9 on stroke, 7 on lung cancer, 9 on pneumonia, and 6 on GI illness. Brief summaries of methods, 

data sources, and findings from each study reviewed are provided in Tables A-1 to A-6 in Appendix A. 

The methods, data sources, disease classifications, age groups considered, and specific cost 

categories estimated in each study varied widely. For chronic lung disease, specific studies focused on a 

2-3

range of different cost outcomes, including hospitalization costs only, expenditures for all health care 

services, work-loss costs only, employer costs for absenteeism and employees’ health care services, and 

informal caregiving costs. Data sources for estimating chronic lung disease costs also varied, and 

included survey data sources, such as the National Hospital Discharge Survey and Medical Expenditure 

Panel Survey, Medicare or private insurance claims data, and hospital-specific data on costs. 

Consequently, cost estimates also varied widely. In 2000 dollars, estimated annual costs for all health 

care services associated with chronic lung disease were approximately $1,000 to $7,800 per person (See 

Table A-1). 

Estimated costs for heart disease also varied widely. Estimated direct medical costs associated 

with heart disease varied from about $5,900 to $7,400 per person. Total estimated medical costs 

associated with heart disease ranged from $67 billion for females over 45 years of age to $90.3 billion for 

all circulatory diseases in those 65 years and older. Large differences in estimated costs arise primarily 

because of differences in the cost categories analyzed or in the age groups considered. 

For stroke, many of the studies reviewed focused on hospital charges, but one of these estimated 

costs only for those with diagnoses of both stroke and myocardial infarction. One study estimated 

hospital charges of approximately $13,000 per person for stroke alone. The estimated total direct and 

indirect cost of stroke was approximately $46 billion per year. 

The estimated costs of lung cancer in the literature range from $5.6 billion (females over 45 years 

only) to $8.2 billion per year. One study estimated average Medicare payments per year for several 

cancers, including lung cancer, of about $28,000 per affected beneficiary (Riley et al., 1995). 

Pneumonia cost studies primarily focused on hospitalization costs. Mean or median costs 

associated with pneumonia ranged from about $5,900 to $10,000 per person. Variations in these 

estimates reflect differences in the definitions used for pneumonia and the methods used (i.e., primary 

diagnosis costs versus attributable costs). Total direct medical cost estimates associated with pneumonia 

ranged from $5.7 to $19.4 billion per year. 

Only one of the GI studies used the same disease classifications used in our COI analysis (Sandler 

et al., 2002). We selected the condition codes shown in Table 2-1 because they reflect the GI most 

closely associated with environmental exposures. Sandler et al. (2002) estimated direct medical costs 

associated with GI of $1.7 million per year for all age groups, and additional indirect costs of $540 

million per year. Just over half of those costs were estimated to result from foodborne illnesses. 

2.4 Discussion 

Our review of the COI literature on the six conditions revealed large differences across studies in 

the methods used, the specific condition codes considered, the data sources analyzed, the age groups 

included, and the categories for which costs were estimated. Such differences make it difficult to 

compare cost estimates from different studies without first attempting to adjust them. We therefore 

recommended original COI analyses for the six conditions, using a consistent set of methods and data 

sources and focusing on the same cost categories across conditions for those 65 years and older. 

In this subsection, we discuss features of COI studies in the literature that make it difficult to 

compare cost estimates across conditions or across studies on the same condition. We then describe how 

our COI approach produces comparable estimates across the six conditions. 

First, the methods used to estimate disease costs vary across studies in the literature. Some 

analyses estimate costs for a primary diagnosis of a condition, while others provide cost estimates for any 

diagnosis of a condition. Still other studies generate cost estimates at the person level, as opposed to the 

condition level, by calculating the costs attributable to a condition (i.e., those costs that could presumably 

be saved if the condition were prevented) or by calculating incremental costs for people with the 

condition as compared to costs for people without the condition. No one approach is better than the 

others. In most cases, the available data dictate which methods may be used to assess costs. For 

2-4

example, if condition codes are assigned to individuals with the condition as opposed to being assigned to 

specific health care services, it is generally preferred to estimate the incremental, or excess, cost of care 

for people with the condition. 

COI studies in the literature rarely defined the conditions using the same set of ICD-9 codes as 

we selected for focus, making it difficult to compare cost estimates across studies and to our COI 

estimates. Our selection of ICD-9 codes for each condition was in part based on identifying health effects 

that are more likely to be associated with environmental exposures in older adults. 

The data available for COI analysis ranged from private health insurance or Medicare claims data 

to national household-based survey data. Data from insurance claims are likely to provide the best source 

of information for identifying costs for each of the ICD-9 codes of interest. In contrast, survey data 

generally contain ICD-9 codes that are assigned to individuals based on self-reports of a health condition. 

However, because claims data provide cost and utilization information only for direct medical costs and 

exclude nonreimbursable medical care costs and nonmedical and indirect costs, survey data are often 

needed to estimate costs in these categories. 

Finally, in reviewing COI analyses in the literature, we discovered that many studies focus on 

narrow categories of costs, such as hospitalization or employer-based costs, which makes it difficult to 

compare estimates across studies without accounting for the differences in the cost categories included. 

In our COI analyses, we attempted to estimate costs for the same set of cost categories for all six of the 

conditions. For some categories of costs, however, there were not enough observations with a specific 

condition to be able to generate reliable condition-specific cost estimates. 

Differences in the information available from each data source used meant that data-specific 

methods were applied to estimate each category of costs. These methods were consistently applied across 

the six conditions. For example, because claims data contain information about the costs to diagnose or 

treat a specific condition, we estimated inpatient, physician, outpatient, home health, and durable medical 

equipment costs from Medicare claims by estimating the costs of a primary or any diagnosis of the health 

condition of interest (see Section 3 for details). In contrast, survey data generally contain costs for 

individuals but not for specific diagnoses. We therefore used survey data to estimate the incremental 

prescription drug and nursing home costs for people with each condition and to estimate the work loss 

and bed days attributable to each condition. 

Because consistent COI methods, data sources, and disease classifications were used in our COI 

analyses for the six conditions, EPA can use the resulting COI estimates to make comparisons across the 

conditions. Such comparisons should help in assessing the relative burden of each condition among older 

adults and in making decisions about where to direct resources for the prevention or treatment of disease 

associated with environmental health exposures in the elderly. 

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3. Cost Analysis Data and Methods 

To estimate the annual cost burden associated with each of the six selected conditions in 2000 

among individuals 65 and older, we separately estimated direct and indirect costs for each illness. In this 

section, we describe the data and methods used to construct these cost estimates. 

3.1 Direct Costs 

To make best use of the available national data, we separated the estimation of direct costs into 

three mutually exclusive components: 

• medical costs, 

• self-administered prescription drug costs, and 

• nursing home costs. 

Each of these components is discussed below. 

3.1.1 Medical Costs 

For individuals 65 and older, Medicare claims provide the most comprehensive source of data on 

costs for medical services. National samples of claims data are accessible in different ways. After 

reviewing the alternatives, we selected the Consumer Assessment of Health Plans Surveys (CAHPS) for 

Medicare Fee-for-Service (MFFS) beneficiaries as the primary data source for our analysis. 

3.1.1.1 Data Description 

CAPHS-MFFS was selected for this part of the analysis because it was relatively easy to access 

and is well suited for this analysis. These data include detailed Medicare claims data and other potentially 

relevant demographic and health-related information for a large and nationally representative sample of 

older Americans. 

The sampling frame for CAHPS-MFFS was drawn from CMS’s Enrollment Data Base (EDB), 

which comprises approximately 30 million persons enrolled in fee-for-service Medicare and residing in 

the United States or Puerto Rico. Beneficiaries with less than 6 months’ continuous enrollment in MFFS 

and those with a representative payee or living in an institution were excluded. To select the CAHPSMFFS sample, a total of 276 geographic primary sampling areas were constructed, each consisting of one 

or more counties, and the sample was allocated to these areas to achieve a minimum of 300 respondents 

in each area. 

The CAHPS-MFFS sample for this study included 145,875 noninstitutionalized Medicare 

beneficiaries, age 65 years or older, who were enrolled in MFFS and eligible for Part A and Part B 

benefits for at least part of 2000. Beneficiaries with proxy respondents were excluded from the analysis. 

It should be noted that, because the study was based on a retrospective analysis of self-reported survey 

data, the study sample has a disproportionate share of nondecedents. The disproportionate share of 

nondecedents in the sample may slightly bias the cost estimates from our analysis. However, because 

health care costs tend to escalate during the last few months of a person’s life and drop to zero thereafter, 

the overall direction of this bias is not known 

3.1.1.2 Analysis Methods 

To estimate medical costs associated with the selected illness categories, we began by extracting 

Medicare claims information for the year 2000 for all Medicare-covered medical services and for all 

survey respondents and nonrespondents. Medicare-covered services include 

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• acute and nonacute inpatient services, 

• hospital outpatient and other ambulatory services, 

• professional fees, 

• home health services, and 

• durable medical equipment. 

Medicare does not cover self-injected medications administered in a home or outpatient setting 

and nursing home or other long-term care services; therefore, costs for these services are not included in 

this claims-based analysis. 

Costs reported in the Medicare claims data include 

• payments made by Medicare, 

• beneficiary payments in the form of deductibles and copayments, and 

• any third-party payments. 

Total medical payments are calculated as the sum of the three payments types. 

We then identified medical costs associated with each of the illness categories by matching the 

ICD-9 codes recorded for each claim with the condition-specific ICD-9 codes listed in Table 2-1. For 

inpatient services, each claim consolidates payments at an admissions level. Consequently, each of these 

claims may be associated with multiple ICD-9 codes—one for the primary diagnosis and potentially 

several more codes for related secondary diagnoses. Similarly, claims for outpatient and home health 

services report payments that may be associated with multiple ICD-9 codes. In contrast, claims for 

professional fees and durable medical equipment are all condition specific and are therefore associated 

with a single ICD-9 code. 

For this analysis, we selected all claims that were recorded with at least one of the ICD-9 codes 

listed in Table 2-1, including both primary and secondary diagnostic codes for inpatient, outpatient, and 

home health services. Because payments for these types of services are consolidated, they may include 

costs that are attributable to conditions other than the selected ICD-9 codes. As a result, for inpatient, 

outpatient, and home health services, the cost estimates developed in this analysis are likely to overstate 

the costs that are specifically attributable to the six conditions of interest. The extent of this 

overestimation is not known. For professional fees and durable medical equipment, no similar 

overestimation of costs is expected because they are all based on condition-specific claims. 

Using the CAHPS-MFFS (with appropriate geographic weights for the stratified sample), we 

were therefore able to obtain unbiased nationally representative estimates for the roughly 26 million 

nonistitutionalized Medicare beneficiaries over the age of 64 enrolled in fee-for-service in 2000. Based 

on the sample of 145,875 respondents, we are able to estimate the number and percentage (prevalence 

rate) of beneficiaries, 65 and older, who were diagnosed with conditions in each of the six illness 

categories in 2000. It should be noted these prevalence estimates are based on claims for services in 

2000; therefore, they do not include individuals who had the underlying condition in 2000 but did not for 

whatever reason seek care for the condition during that period. Consequently, these claims based 

prevalence estimates are likely to underestimate by a small amount the overall prevalence of each 

condition in the noninstitutionalized fee-for-service elderly population. 

For these beneficiaries, we are also able to estimate the average (per capita) and aggregate 

medical costs associated with these illnesses in 2000. With the information in CAHPS-MFFS, it is also 

possible to disaggregate these estimates by 

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• type of medical service, 

• age/gender categories, and 

• Census region and state. 

The results for each illness category are summarized in Section 4, with additional detail provided in 

Appendix C. 

To extrapolate these direct medical cost estimates to the entire non-institutionalized population of 

individuals 65 and older in 2000, we assumed that the prevalence and average costs for each condition 

based on the CAHPS-FFS data were also applicable to those not participating in fee for service Medicare 

and not in nursing homes. According to U.S. Census data, the total 65 and older population in 2000 was 

35 million, and according to the National Center of Health Statistics (NCHS, 2003) the number of nursing 

home residents was 1.5 million. Therefore, we applied the prevalence and average cost estimates for 

each condition to an assumed total population of 33.5 million. This extrapolation is like to slightly 

overestimate prevalence and costs for those not in fee-for service Medicare (and not institutionalized) 

because they are on average somewhat younger and in somewhat better health than those in Medicare fee 

for service (Brown et al., 1993 ). 

3.1.2 Self-Administered Prescription Drug Costs 

One of the inherent limitations in using Medicare claims data (including CAHPS-MFFS as 

discussed in Section 3.1.1) to assess direct costs of illness is that expenditures for self-administered 

prescription drugs are not reimbursable by Medicare and are therefore excluded from the claims-based 

cost estimates. To estimate these prescription drug costs for each of the six conditions, we used data from 

the 2000 Medical Expenditures Panel Survey (MEPS). 

3.1.2.1 Data Description 

The MEPS is a nationally representative subsample of the National Health Interview Survey 

(NHIS, described in some detail below in Section 3.2). One important feature of the MEPS is that it 

allows for the linkage of demographic data on individuals to their health care utilization, spending, and 

sources of payment. 

The 2000 survey requested information about the number of prescription medication purchases 

(including refills) and total expenditures for prescription drugs by sources of payment. The sources of 

payment for which information was collected include self or family, Medicare, Medicaid, private 

insurance, TRICARE, the Veterans’ Administration, workers’ compensation, and other sources. The 

survey also contains a conditions file that includes information about all conditions reported for 

household residents. 

Health conditions included in MEPS are those reported by a household respondent and those 

listed as the reason for a medical provider visit or prescribed medication. Medical conditions were 

recorded by the interviewer as verbatim text; professional coders later assigned three-digit ICD-9 codes. 

3.1.2.2 Analysis Methods 

To estimate the prescription drug costs associated with each of the six conditions, we first created 

a sample of individuals 65 years and older from the 2000 MEPS and then calculated mean prescription 

drug expenditures for each condition by age group (65 to 74, 75 to 84, and 85 years and older) and by sex. 

Mean expenditures and standard errors were estimated for total prescription drug spending, for Medicare 

spending, for total spending except Medicare, and for total spending except Medicare and self- or familypaid costs. To avoid double-counting, our reported estimates focus on the cost estimates that exclude 

prescription drugs where Medicare was reported as the source of payment. However, cost estimates from 

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our analysis of Medicare claims may also include co-pays or deductibles that represent out-of-pocket 

expenses. Consequently, our prescription drug cost estimates may include some out-of-pocket expenses 

that are also included in our cost estimates from Medicare claims analysis. 

Because estimates of mean total prescription drug costs cannot be taken as attributable cost 

estimates, we also estimated the incremental, or additional, costs of prescription drugs for individuals 

with each condition as compared to persons without the condition, by age group and by sex. Incremental 

cost estimates represent the additional costs for those with the condition as compared to those without the 

condition. We chose to consider incremental costs because it allows us to interpret our estimates as 

representing excess costs for people with the conditions of interest. However, because it is not 

uncommon for individuals in the 65 and older age group to have high medical care expenses, incremental 

cost estimates in an older population are often close to zero or even negative. In other words, individuals 

in this age group who do not have the condition of interest have a fairly high likelihood of having another 

costly condition or disability. In comparison, total cost estimates are limited in that they represent total 

costs for individuals with a condition and do not account for the high degree of comordity in the over-65 

population. 

3. 1. 3 Nur s i ng Home Cost s 

Another gap in our cost estimates from Medicare claims data (using CAHPS-MFFS) is the cost 

associated with care in a nursing home. We address this gap by analyzing nursing home charges using 

the 1999 National Nursing Home Survey (NNHS). 

3.1.3.1 Data Description 

The 1999 NNHS sample consisted of 1,496 of the approximately 18,400 nursing homes in the 

United States that had at least three beds and were either certified by Medicare or Medicaid or had a state 

license to operate as a nursing home. A sample of up to six current residents was selected from each 

participating nursing home for inclusion in the current resident file. Interviews were then conducted with 

nursing staff familiar with residents’ medical records to collect demographic information, diagnoses 

(ICD-9 codes assigned at admission and based on current records), total charges for a specified period, 

and indicators for a range of different sources of payment (e.g., self pay, Medicare, Medicaid). The 

responding nurse referred to the resident’s medical record when answering the interview questions. 

3.1.3.2 Analysis Methods 

To develop an estimate of the nursing home costs associated with each of the six conditions, we 

used the NNHS current resident file and limited our analysis to those people 65 years and older. We then 

calculated mean total charges by sex, age group (65 to 74, 75 to 84, and 85 years and older), and 

condition. These estimated charges were converted to costs by using the Medicare cost-to-charge ratio 

for skilled nursing facilities, which was 0.78777. Estimated costs were updated to 2000 dollars using the 

consumer price index for all urban consumers. 

Incremental cost estimates were then generated for each condition by taking the difference of 

mean total costs by age group and sex for those with and without the condition of interest. We also 

examined frequencies of Medicare as a source of payment and the inclusion of drugs and medical supplies 

in the total charges reported. 

Applying estimates of mean incremental costs for each health condition to calculate aggregate 

nursing home costs also requires estimates of the number of elderly in nursing homes with each condition. 

Data on nursing home trends (NCHS, 2003) indicates that there were approximately 1.5 million nursing 

home residents in 2000. To estimate the portion of this population that experienced each condition, we 

applied the prevalence rates derived from the CAPHS-MFFS data. These claims based prevalence 

estimates are likely to somewhat underestimate prevalence among nursing home residents because rates 

3-4

of illness are typically higher in the institutionalized population and because the claims based estimates 

do not include those who did not seek care for their condition in 2000. 

3.2 Indirect C o st s 

Indirect costs are those for which no payment is made, but for which an economic effect is still 

observed. In our analysis and in most COI studies, a human capital approach is used to value the indirect 

cost of time lost from productive activities due to excess morbidity or premature mortality. The human 

capital approach values productivity losses based on market earnings and an imputed value for household 

production (Drummond et al., 1997). Advantages of the human capital approach are that it assumes a 

societal perspective and relies on data that are readily available. A disadvantage is that estimates of the 

value of life and health among the retired elderly will be lower than comparable estimates for workingage adults because the estimates are based largely on measures of market productivity. The human 

capital approach also ignores the costs of pain and suffering associated with an illness and excludes the 

value of time lost from consumption activities (Tolley, Kenkel, and Fabian, 1994). 

The concept of willingness to pay (WTP) is useful for addressing the limitations of the human 

capital approach. However, the implementation of stated or revealed preference approaches to estimate 

the value of health effects, or WTP, requires far more time and resources than does a human capital 

approach using existing data. For this reason, we used the human capital approach to value indirect costs 

associated with the six conditions. These estimates may be thought of as lower-bound estimates for the 

full indirect costs of each condition. 

3. 2. 1 I ncreased M orb i dit y 

We used data from the 2001 National Health Interview Survey (NHIS) to estimate the impact of 

each condition on labor force participation rates, number of work loss days for those who were working 

during the survey year, and number of bed days. These estimates were combined with age- and sexspecific earnings and household productivity values for 2000 to generate estimates of the increased 

morbidity costs associated with each condition. 

3.2.1.1 Data Description 

The NHIS is an annual household interview survey designed primarily to collect data about the 

health status, health conditions, and health care utilization of household members. The survey also 

requests information about basic demographics and about days lost from work, bed days, and functional 

limitations. Data are collected annually from about 43,000 households and about 106,000 persons within 

the households. Information about diseases and other health conditions among people was also collected. 

However, the NHIS did not contain information about pneumonia or gastrointestinal illness; as a result, 

these conditions are excluded from our morbidity cost estimates. 

Data from the NHIS were combined with productivity estimates from Grosse (2003). Grosse 

provides estimates of annual earnings for those in the workforce and household productivity for all adults 

by age group (65 to 74 and 75 and older) and by sex. 

3.2.1.2 Analysis Methods 

We used the 2001 NHIS to estimate two components of labor productivity losses: the losses 

associated with being completely unable to work (out of the labor force) and the losses associated with 

missing work days. For the first component, we used estimates of the percentage of those who report that 

they are not currently working but worked previously as a proxy for the probability of being unable to 

work due to poor health. We estimated the probability of being completely unable to work because of 

one of the six health conditions as the excess percentage of those with the condition as compared to those 

3-5

without the condition who are not currently working. Separate estimates of the probability of being 

unable to work were developed for all those 65 years and older for each condition. 

We then estimated the per-person morbidity cost associated with being completely unable to 

work as the estimated probability of being unable to work because of the condition multiplied by annual 

earnings. Annual labor market earnings estimates were by sex for the 65 to 74 and 75 years and older age 

groups. 

For the second component of labor productivity losses, we limited our analysis to those over 65 

years of age who reported that they currently work. We then used a regression approach to estimate the 

impact of each condition on missed work days, controlling for a number of variables, including education, 

poverty status, self-reported health status, occupation, and smoking status. 

Results from our regression analysis are shown in Appendix B. Using the regression results, we 

generated predictions of the number of missed work days attributable to each of the six conditions. These 

estimates were generated by condition and by sex for all age groups combined. We then estimated labor 

productivity losses by multiplying predicted work-loss days by sex-specific average daily earnings for 

those 65 to 74 years and 75 years and older in the workforce (Grosse, 2003). Per-person estimates for all 

those with the condition were generated by multiplying estimated productivity losses due to missed work 

days by the percentage with each condition that currently works. Our methods for estimating the 

household productivity losses associated with being sick in bed were similar. 

Our bed days analysis included all those 65 years and older. We used a regression approach to 

estimate the impact of each condition on number of bed days, controlling for education, poverty status, 

self-reported health status, labor force participation status, and smoking status. Based on these results, we 

predicted the number of bed days attributable to each condition by sex. Household productivity losses 

were estimated by multiplying predicted bed days for each condition by sex-specific average household 

productivity for those 65 to 74 years and 75 years and older. 

The estimates of labor productivity losses shown in Section 4 represent the sum of the expected 

costs due to being unable to work and the expected costs due to missing work for people with each 

condition. Household productivity losses represent the value of lost household work attributable to each 

condition. 

Our estimates for lung cancer are limited by the small number of observations in the 65 years and 

older age group in the 2001 NHIS. Only 26 males and 15 females were identified with lung cancer. The 

number with lung cancer who reported being in the labor force was even smaller and forced us to exclude 

lung cancer from our work days-loss analysis. We also excluded lung cancer from our analysis of bed 

days attributable to lung cancer. The only morbidity costs for lung cancer included in our analysis are the 

costs associated with being completely unable to work. 

We do not provide measures of dispersion for our indirect cost estimates, in large part because 

our source for the earnings and household productivity estimates did not provide standard errors or other 

measures of dispersion. Because the variation in earnings among older individuals who work is much 

greater than the variation in the percentage of older Americans who work, we chose not to estimate 

standard errors that would necessarily treat earnings as having no variation. 

3.2.2 Premature Mortality 

We used data from the 1998 National Vital Statistics Report (NVSR) to determine the number of 

annual deaths with one of the six conditions listed as the cause of death. These data were combined with 

estimates of the present value of earnings and household productivity from Grosse (2003) to estimate the 

cost of mortality due to each condition. 

3-6

3.2.2.2 Data Description 

The 1998 NVSR provides calculations from all death certificates filed in the 50 states and the 

District of Columbia in 1996 (Peters, Kockanek, and Murphy, 1998). We relied on the 1998 report 

primarily because it uses ICD-9 codes to categorize causes of death. Later reports began using the revised 

ICD-10 classification scheme. The NVSR provides statistics on deaths and death rates by age group (65 

to 74, 75 to 84, and 85 years and older) for groupings of ICD-9 codes that closely match the disease 

groupings we selected for COI analysis. It also provides death rates for the overall population by age 

group and sex. 

Grosse (2003) provides estimates of the present value of earnings and household productivity by 

age for several different discount rates. In our analysis, we use the Grosse (2003) present value estimates 

for earnings only and for earnings and household production combined. For both measures, we assume 

that the value of future production is discounted at an annual rate of 5 percent. 

3.2.2.3 Analysis Methods 

To estimate the indirect costs resulting from premature mortality among those 65 years and older, 

we multiplied the cause- and age group-specific number of deaths for each condition by the age groupspecific present value of earnings (earnings and household production). Because Grosse (2003) does not 

provide an estimate for expected productivity among those 85 and older, we were not able to estimate 

losses (labor or household) for deaths in the 85 and older age group. The present value of productivity 

losses in this age group is expected to be lower than for the younger age groups. 

For ischemic heart disease and pneumonia, the health condition categories provided in the NVSR 

exactly matched our characterization of the condition using ICD-9 codes. However, for chronic lung 

disease (CLD), stroke, and lung cancer, the NVSR condition categories included some ICD-9 codes that 

were not used in our assessment of direct costs. For gastrointestinal illness, the NVSR condition 

categories excluded some of the ICD-9 codes used in our direct cost analyses. Because of these 

discrepancies, our estimates of mortality costs for CLD, stroke, and lung cancer are slight overestimates 

of mortality costs, while our estimate for gastrointestinal illness is an underestimate of actual mortality 

costs for the conditions of interest. 

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4. 	 Cost-of-Illness Estimates for Selected Conditions in Older 

Americans 

Using the data and methods described in Section 3, we estimated the direct and indirect costs of 

illness associated with each of the six selected conditions in 2000 among individuals 65 and older. In this 

section, we separately summarize the results for CLD, ischemic heart diseases (IHD), stroke, lung cancer, 

pneumonia, and gastrointestinal illness. All costs reported in the results tables are expressed in 2000 

dollars. 

4.1 Chronic Lung Disease 

As summarized in Table 4-1. Costs of Illness Associated with Chronic 

Table 4-1, we estimated that Lung Disease—Estimated Aggregate Costs in 

approximately 4.4 million older 2000 for Individuals 65 and Older 

Americans suffered from CLD in 

2000, and it was the primary Number of 

Affected Mean Cost cause associated with almost Cost Category Individuals ($/person) Aggregate Costs 100,000 deaths in individuals 65 Direct Costs and older. Based on these 

4,190,512 $5,786 $24,246,304,937 estimates, we also calculated Medical 

aggregate direct and indirect Prescription Drug 4,190,512 $574 $2,405,354,137 

costs from CLD in this Nursing Home 185,000 $3,471 $642,135,000 

population to be approximately Indirect Costs 

$33.9 billion. These results are Morbidity 4,190,512 $1,574 $6,594,623,730 

further described and Mortality 98,326 — $9,895,808 

disaggregated in the sections Total Costs of Illness — — $33,898,313,612 

below. 

4.1.1 Direct Costs: Medical 

Based on CAHPS-MFFS data, roughly 3.3 million (12.5 percent of) noninstitutionalized 

Medicare fee-for-service elderly beneficiaries suffered from CLD in 2000, and the annual medical costs 

for these beneficiaries averaged about $5,800 per year. As shown in Table 4-2, the largest component of 

these costs was associated with inpatient services, which averaged over $13,000 for nearly 1.2 million 

beneficiaries. The aggregate medical cost estimates shown in Table 4-1, were extrapolated from these 

estimates, assuming the same prevalence and average costs for CLD among the noninstitutionalized 

elderly who do not participate in Medicare fee-for-service. As described in Section 3, this extrapolation is 

likely to somewhat overestimate aggregate medical costs in the noninstitutionalized elderly population. 

Rates of CLD among the male elderly population were found to be significantly higher than 

among the female elderly population in each of the three age categories listed in Table 4-2. Furthermore, 

whereas rates of CLD among the female population were between 10 and 12 percent for all three age 

categories, the rate for males climbed from 13 percent for those between 65 and 74 years to 19 percent for 

those 85 and older. Compared to this variation in prevalence rates, there was considerably less variation 

in average medical costs for CLD across age and gender categories, ranging between $5,000 and $6,500. 

4.1.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

Having CLD was associated with significantly higher prescription drug costs for males and 

females in the 65 to 74 years age group. These estimates are described in Table 4-3. Estimated costs for 

this age group were approximately $600 to $1,200. Estimated incremental prescription drug costs were 

$574 for the total population over 65 years with CLD. Excess costs for those in the two oldest age groups 

4-1

Table 4-2. 	 Direct Medical Costs Associated with Chronic Lung Disease—Number of 

Beneficiaries and Average Medical Payments by Type of Service and AgeGender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95%CI (±) Mean 	 95%CI (±) 

Total	 3,264,847 12.5 (12.3, 12.7) 5,786 (5,568, 6,005) 

Type of Medical Service 

Inpatient 1,196,221 4.6 (4.5, 4.7) 13,019 (12,535, 13,504) 

Physician 1,611,419 8.8 (8.6, 8.9) 461 (439, 483) 

Hospital outpatient 1,069,976 4.1 (3.9, 4.2) 570 (535, 610) 

Home health 201,731 7.7 (0.7, 0.8) 2,643 (2,406, 2,880) 

Durable medical equipment 720,079 2.7 (2.7, 2.8) 2,220 (2,142, 2,298) 

Age-Gender Category 

Age 65–74 Years 

Male 754,596 12.9 (12.5,0.13.3) 5,596 (5,146, 6,046) 

Female 706,640 10.1 (9.8, 10.5) 5,122 (4,655, 5,588) 

Age 75–84 Years 

Male 649,188 17.1 (16.6, 17.7) 6,030 (5,539, 6,520) 

Female 687,217 11.6 (11.2, 11.9) 6,461 (5,901, 7,021) 

Age 85+ Years 

Male 192,794 19.0 (17.8, 20.1) 5,131 (4,610, 5,652) 

Female 273,812 10.5 (10.0, 11.1) 6,219 (5,625, 6,814) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

Table 4-3. 	 Other Direct Costs Associated with Chronic Lung Disease—Incremental Cost 

Estimates for Prescription Medications and Nursing Home Services by AgeGender Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 

Age Size Year) 95% CI (±) Size Year) 95% CI (±) 

Age 65+ years 174 $574 (264, 884) 764 $3,471 (–3,138, 10,081) 

Age 65–74 years 

Male 37 $563 (124, 1,003) 71 $28,200 (–43,331, 99,730) 

Female 59 $1,215 (588, 1,843) 64 $9,574 (222, 18,927) 

Age 75–84 years 

Male 24 $128 (–251, 506) 102 ($651) (–6,507, 5,206) 

Female 40 $141 (–325, 607) 175 $505 (–3,286, 4,296) 

Age 85+ years 

Male 4 ($429) (–701, –157) 104 $1,102 (–2,846, 5,049) 

Female 10 $42 (–609, 694) 248 ($634) (–2,925, 1,657) 

Notes: Prescription drug estimates exclude those with source of payment listed as Medicare. () denotes a negative 

value. 

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were not statistically significantly different from zero. The lower estimated excess drug costs for the two 

oldest age groups probably reflects the higher rate of comorbidity and prescription drug use among all 

individuals 75 years and older, which tends to make the prescription drug spending of those with CLD 

look similar to those without. 

Table 4-3 also shows estimates of nursing home costs associated with CLD. Although the 

standard errors on the estimated incremental nursing home costs were large, incremental costs were fairly 

large for males and females in the 65 to 74 years age group, especially for males. Estimated excess 

nursing home costs for the other two age groups were much smaller and were not statistically different 

from zero. Our findings of higher excess costs for the youngest age group with CLD is consistent with 

the hypothesis of a large degree of costly comorbidities within the 75 years and older population. 

4.1.3 Indirect Costs: Morbidity 

As shown in Table 4-4, 

we estimate that, for those older Table 4-4. Morbidity-Related Indirect Costs Associated 

Americans suffering from CLD, with Chronic Lung Disease—Estimated 

the annual per person labor Annual Per-Person Productivity Losses by 

productivity losses resulting the Age-Gender Category 

illness vary across age and sex 

subgroups from about $900 to Labor Household Total 

$2,000. These estimates include Age 

Productivity Productivity Productivity 

Losses Losses Losses the probability of being out of $1,420 $154 $1,574 the labor force, which is about 4 Age 65+ years 

percentage points higher in Age 65–74 years 

 $1,867 $103 $1,971 people with CLD than for the Male

average older American, and Female $836 $211 $1,047 

work-loss days among the 10 Age 75+ years 

percent of older people with Male $1,566 $95 $1,660 

CLD who continue to work. Our Female $752 $181 $933 

estimates of work-loss days 

attributable to CLD are 4.6 for 

females and 3.4 for males. 

Estimates of annual household productivity losses resulting from increased morbidity in those 

with CLD are fairly low and average $154 per person for all those over 65 years of age. Estimates range 

from $95 per year for males older than 75 years up to $211 per year for females in the 65 to 74 years age 

group. Our estimates indicate that the number of bed days per year attributable to CLD is about 5 for 

females and 3 for males. 

Total productivity losses are calculated as the sum of estimated labor and household productivity 

losses. They are estimated to average about $1600 for those 65 and older with CLD. 

4.1.4 Indirect Costs: Mortality 

Using data from NSVR, Table 4-5 shows that the annual number of deaths with CLD as the cause 

was estimated to be about 98,000 in 2000, with 76 percent occurring in people between 65 and 84 years 

of age. Because many of the expected deaths resulting from CLD are in the 65 to 74 and 75 to 84 years 

age groups, the present value of labor productivity losses associated with CLD is high—over $2 billion 

per year. The combined value of labor and productivity losses is also high—about $9.9 billion per year. 

As discussed in Section 3, the value of productivity losses for those 85 and older could not be estimated 

due to lack of data on expected productivity for this age group. 

4-3

Table 4-5. Mortality-Related Indirect Costs Associated with Chronic Lung Disease— 

Estimated Aggregate Productivity Losses by Age Category 

Aggregate Labor Aggregate Labor and Household 

Number of Productivity Losses Productivity Losses 

Age Deaths (in 1,000s) (in 1,000s) 

Age 65+ years 98,326 $2,120,309 $9,895,808 

Age 65–74 years 29,869 $1,523,485 $5,685,484 

Age 75–84 years 44,651 $596,824 $4,210,324 

Age 85+ years 23,806 -— — 

Notes: Chronic lung disease diagnosis in mortality data is based on ICD-9 codes of 490-496. Mortality related 

indirect costs for 85+ not estimated due to lack of data on expected productivity for this age group. 

4.2 Ischemic Heart Disease 

Of the six conditions Table 4-6. Costs of Illness Associated with Ischemic 

analyzed in this report, IHD is Heart Disease—Estimated Aggregate Costs in 

the most prevalent condition 2000 for Individuals 65 and Older 

among older Americans. We 

estimate that approximately 6.9 Number of 

Affected Mean Cost million older Americans Cost Category Individuals ($/person) Aggregate Costs experienced IHD in 2000, and Direct Costs other data indicate that almost 

 6,604,030 $5,716 $37,748,632,961 450,000 deaths were primarily Medical

$680 $4,490,740,100 attributable to the disease. As Prescription drug 6,604,030 

reported in Table 4-6, we Nursing home —

estimate the aggregate direct Indirect Costs 

(except nursing home) and Morbidity

indirect costs from CLD in this Mortality 

290,080 — 

 6,604,030 $1,193 $7,878,384,878 

443,494 — $34,535,761 

population to be approximately Total Costs of Illness — — $50,152,293,701 

$50.1 billion in 2000. These 

results are further described and 

disaggregated in the sections below. 

4.2.1 Direct Costs: Medical 

Our analysis of direct medical costs, summarized in Table 4-7, indicates that over 5.1 million (20 

percent of) Medicare fee-for-service elderly beneficiaries experienced IHD in 2000. The prevalence of 

IHD is therefore almost 60 percent greater than for CLD in this population; however, the annual medical 

costs per beneficiary are very similar, averaging about $5,700 per year. As with all of the conditions 

analyzed in this report, the largest component of estimated medical costs was associated with inpatient 

services, in this case averaging about $13,000 for over 1.8 million beneficiaries. When the estimated 

medical costs of IHD for fee-for-service beneficiaries ($5716) are extrapolated to the entire 

noninstitutionalized population of adults over 65 in 2000 (33.5 million), they sum to almost $38 billion, 

as shown in Table 4-5. 

As is the case with CLD, the prevalence of IHD was found to be significantly higher among the 

male elderly population than the female elderly population in each of the three age categories listed in 

Table 4-7. However, rates of IHD for both males and females were significantly higher in the older age 

categories. The rate for males was 22 percent for those between 65 and 74 years and 32 percent for those 

4-4

Table 4-7. 	 Direct Medical Costs Associated with Ischemic Heart Disease—Number of 

Beneficiaries and Average Medical Payments by Type of Service and AgeGender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95%CI (±) Mean 	 95%CI (±) 

Total	 5,145,229 19.6 (19.4,19.9) 5,716 (5,557, 5,875) 

Type of Medical Service 

Inpatient 1,878,134 7.2 (7.0, 7.3) 13,181 (12,852, 13,511) 

Physician 4,084,632 15.6 (0.1, 0.2) 641 (621, 661) 

Hospital outpatient 1,859,793 7.1 (7.0, 7.2) 407 (389, 425) 

Home health 265,519 1.0 (1.0, 1.1) 2,063 (1,913, 2,213) 

Durable medical equipment 40,886 0.2 (0.1, 0.2) 831 (584, 1,079) 

Age-Gender Category 

Age 65–74 Years 

Male 1,280,121 21.9 (21.4, 22.3) 5,707 (5,359, 6,056) 

Female 832,829 11.9 (11.6, 12.3) 5,803 (5,385, 6,220) 

Age 75–84 Years 

Male 1,169,587 30.8 (30.1, 31.5) 5,770 (5,429, 6,110) 

Female 1,028,219 17.3 (16.8, 17.8) 5,792 (5,439, 6,146) 

Age 85+ Years 

Male 320,908 31.5 (30.2, 32.9) 4,957 (4,530, 5,385) 

Female 513,565 19.8 (19.0, 20.5) 5,793 (5,400, 6,186) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

85 and older. For women, the rates of IHD were 12 and 20 percent, respectively. The average medical 

costs for IHD across age and gender categories varied by less than $1,000 (i.e., between $4,900 and 

$5,800). 

4.2.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

Our estimates of the excess prescription drug costs associated with heart disease were positive for 

all age and sex subgroups. As reported in Table 4-8, on average, prescription drug costs for those over 65 

years with IHD were $680 higher than for those without. These findings suggest that heart disease drug 

costs exceed the cost of drugs for many other diseases that afflict the elderly. Estimated incremental 

prescription costs for the 65 to 74 years age group were $700 to $1,100 and statistically different from 

zero. For the two older age groups, estimated excess drug costs were generally positive, but much lower 

and not significantly different from zero. 

Estimates of excess nursing home costs for individuals with heart disease are not significantly 

different from zero for any of the age and sex subgroups. These findings suggest that among nursing 

home residents older than 64 years, those with heart disease have nursing home costs that are no higher 

than those without the condition. The estimated negative mean value for incremental nursing home costs 

reported in Table 4-8 was assumed to be implausible and therefore not included in the aggregate estimates 

for IHD reported in Table 4-6. 

4-5

Table 4-8. Other Direct Costs Associated with Ischemic Heart Disease—Incremental Cost 

Estimates for Prescription Medications and Nursing Home Services by AgeGender Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 

Age Size Year) 95% CI (±) Size Year) 95% CI (±) 

Age 65+ years 156 $680 (400, 961) 1,042 ($1,357) (–3,187, 474) 

Age 65–74 years 

Male 45 $722 (203, 1,240) 55 ($9,572) (–27,005, 7,860) 

Female 37 $1,120 (467, 1,773) 55 $3,240 (–3,486, 9,967) 

Age 75–84 years 

Male 22 $18 (–233, 269) 116 ($1,286) (–6,962, 4,389) 

Female 35 $675 (260, 1,091) 231 ($1,969) (–5,371, 1,433) 

Age 85+ years 

Male 8 $311 (–460, 1,082) 127 ($905) (–4,847, 3,038) 

Female 9 $237 (–167, 642) 458 ($645) (–3,011, 1,722) 

Notes: Heart disease diagnosis based on ICD-9 code of 410-414. Sample weights used and complex survey design 

taken into account in calculating standard errors. Prescription drug estimates exclude those with a source of 

payment listed as Medicare. () denotes a negative value. 

4.2.3 Indirect Costs: Morbidity 

The estimated labor productivity losses resulting from increased morbidity in people with IHD 

are a bit lower than estimated losses for those with CLD. Table 4-9 reports estimated labor productivity 

losses per person with IHD of about $470 to $1,200, with a portion of those losses arising because people 

with heart disease have a 3 percentage point higher probability of being unable to work than the 

analogous population without heart disease. Among those with heart disease who do work, we estimate 

work-loss days attributable to heart disease of 1.7 for females and 1 for males. The average labor 

productivity loss across age and sex subgroups is $880 per year. 

Table 4-9. 	 Morbidity-Related Indirect Costs Associated with Ischemic Heart Disease— 

Estimated Annual Per-Person Productivity Losses by Age-Gender Category 

Labor Productivity Household Productivity 

Age Losses Losses Total Productivity Losses 

Age 65+ years $878 $315 $1,193 

Age 65–74 years 

Male $1,156 $210 $1,366 

Female $517 $449 $966 

Age 75+ years 

Male $969 $192 $1,162 

Female $465 $385 $850 

4-6

Estimated household productivity losses in older people with heart disease are $315 and range 

from $192 to $449 per year within specific age and sex subgroups. These estimates are based on 

estimated bed days attributable to heart disease of 10 for females and 6 for males. 

4.2.4 Indirect Costs: Mortality 

The estimated annual 

number of deaths in 2000 Table 4-10. Mortality-Related Indirect Costs Associated with 

with IHD as the cause is over Ischemic Heart Disease—Estimated Aggregate 

443,000—over four times the Productivity Losses by Age Category 

number of deaths resulting 

from CLD in this age group Aggregate Labor Aggregate Labor 

and almost three times the Productivity and Household 

number of stroke deaths. The Number Losses Productivity Losses 

Age of Deaths (in 1,000s) (in 1,000s) large number of deaths caused 

by heart disease is associated Age 65+ years 443,494 $7,231,200 $34,535,761 

with high labor and household Age 65–74 years 97,226 $4,959,013 $18,506,512 

productivity losses. As Age 75–84 years 169,993 $2,272,187 $16,029,249 shown in Table 4-10, the 

estimated annual labor Age 85+ years 176,275 — —

productivity losses resulting Notes: Ischemic heart disease diagnosis in mortality data is based on ICD-9 from heart disease mortality codes of 410-414. Mortality related indirect costs for 85+ not estimated due are $7 billion, while the to lack of data on expected productivity for this age group. 

estimated annual labor and 

household productivity losses are almost $35 billion. 

that over 150,000 deaths in Number of 

Affected Mean Cost individuals 65 and older were 

primarily attributable to Cost Category Individuals ($/person) Aggregate Costs 

stroke. Based on these Direct Costs 

estimates, we calculated Medical 2,535,378 $3,725 $9,444,281,366 

aggregate direct (except for Prescription drug 2,535,378 $945 $2,395,931,783 

nursing home) and indirect Nursing home 111,000 — — costs from stroke in this 

population to be Indirect Costs 

approximately $18.1 billion. Morbidity 2,535,378 $2,478 $6,281,881,402 

These results are further Mortality 156,000 — $10,423,691 

4-7 

described and disaggregated 

in the sections below. 

Total Costs of Illness — — $18,132,518,242 

4.3 Stroke 

As summarized in 

Table 4-11, we estimate that 

approximately 2.6 million 

older Americans experienced 

strokes in 2000. We also find 

Table 4-11. Costs of Illness Associated with Stroke— 

Estimated Aggregate Costs in 2000 for 

Individuals 65 and Older 
4.3.1 Direct Costs: Medical 

Table 4-12 summarizes our estimates of stroke-related medical costs among Medicare fee-forservice elderly beneficiaries. We estimate that roughly 2 million (7.5 percent of) beneficiaries 

experienced stroke in 2000. The annual medical costs per beneficiary averaged $3,700 per year, which is 

significantly lower than for CLD and IHD. Extrapolating these prevalence and average cost estimates to 

the entire population of noninstitutionalized adults over 65 in 2000 results in an aggregate estimate of 

stroke-related medical costs of $9.4 billion (shown in Table 4-11). 

Table 4-12. Direct Medical Costs Associated with Stroke—Number of Beneficiaries and 

Average Medical Payments by Type of Service and Age-Gender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95%CI (±) Mean 95%CI (±) 

Total 1,975,324 7.5 (7.4,7.7) 3,725 (3,528, 3,923) 

Type of Medical Service 

Inpatient 479,335 1.8 (1.8, 1.9) 11,555 (10,959, 12,151) 

Physician 1,161,419 6.1 (6.0, 6.3) 461 (439, 483) 

Hospital outpatient 576,421 2.2 (2.1, 2.3) 615 (568, 662) 

Home health 143,443 0.5 (0.5, 0.6) 3,282 (2,792, 3,592) 

Durable medical equipment 202,001 0.8 (0.7, 0.8) 1,243 (1,091, 1,395) 

Age-Gender Category 

Age 65–74 Years 

Male 376,615 6.4 (6.1,6.7) 3,658 (3,102, 4,214) 

Female 334,302 4.8 (4.6, 5.0) 3,663 (3,227, 4,100) 

Age 75–84 Years 

Male 433,262 11.4 (10.9, 11.9) 3,682 (3,209, 4,155) 

Female 460,068 7.7 (7.4, 8.1) 3,785 (3,397, 4,172) 

Age 85+ Years 

Male 136,725 13.4 (12.5, 14.4) 3,248 (2,765, 3,732) 

Female 234,353 9.0 (8.5, 9.5) 4,165 (3,748, 4,581) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

As is the case with CLD and IHD, the prevalence of stroke was found to be significantly higher 

for males than for females in each of the three age categories. Similar to IHD, the prevalence of stroke 

for both males and females was significantly higher in the older age categories, going from 6 percent of 

men and 5 percent of women between 65 and 74 years to 13 percent and 9 percent, respectively, for those 

85 and older. The average medical costs again show relatively little variation across age and gender 

categories, varying between $3,600 and $4,200 for stroke. 

4.3.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

Our assessment of the prescription drug and nursing home costs associated with stroke, 

summarized in Table 4-13, resulted in generally positive incremental cost estimates for prescription 

drugs. For the total population 65 years and older, a stroke diagnosis in the past year was associated with 

significantly higher prescription drug costs of about $945 per person per year. For males and females in 

the 65 to 74 years age group, costs were even higher—$1,200 to $1,700 per year. Although a stroke 

diagnosis was also associated with positive incremental prescription drug costs for the 75 to 84 years age 

group, the magnitude was much smaller—approximately $500 to $1,000. For the oldest age group, stroke 

was not associated with significantly higher prescription drug costs. 

4-8

Table 4-13. Other Direct Costs Associated with Stroke—Incremental Cost Estimates for 

Prescription Medications and Nursing Home Services by Age-Gender 

Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 

Age Size Year) 95% CI (±) Size Year) 95% CI (±) 

Age 65+ years 114 $945 (596, 1,294) 73 ($403) (–5,089, 4,283) 

Age 65–74 years 

Male 30 $1,708 (687, 2,728) 7 ($2,103) (–30,046, 25,840) 

Female 23 $1,215 (353, 1,622) 8 $3,632 (–14,938, 22,203) 

Age 75–84 years 

Male 16 $507 (–133, 1,147) 10 ($9,402) (–14,138, 4,665) 

Female 23 $988 (353, 1,622) 19 ($2,991) (–9,744, 3,762) 

Age 85+ years 

Male 11 ($177) (–612, 257) 4 $21,157 (–14,511, 56,826) 

Female 11 $34 (–386, 455) 25 ($670) (–7,049, 5,709) 

Notes:. Stroke diagnosis based on ICD-9 code of 430-434 and 436. Sample weights used and complex survey 

design taken into account in calculating standard errors. Prescription drug estimates exclude those with a source 

of payment listed as Medicare. () denotes a negative value. 

Somewhat surprisingly, nursing home costs for those with a reported stroke were no higher than 

costs for those without stroke as a diagnosis. Although the estimated excess cost for males in the 85 years 

and older age group was $21,000, this estimate is not significantly different from zero. Moreover, 

aggregate nursing home costs for individuals in the NNHS with a stroke diagnosis were no higher than 

nursing home costs for those without a stroke diagnosis. Due to the small sample size and high standard 

errors, these estimates of stroke related nursing home costs are not included in our aggregate cost 

estimates. 

4.3.3 Indirect Costs: Morbidity 

According to the results 

shown in Table 4-14, the annual Table 4-14. Morbidity-Related Indirect Costs Associated 

labor productivity losses with Stroke—Estimated Annual Per-Person 

resulting from increased Productivity Losses by Age-Gender Category 

morbidity in older people who 

experience a stroke are Labor Household Total 

relatively high, ranging from Age 

Productivity Productivity Productivity 

Losses Losses Losses about $1,000 to $2,400 per $1,820 $658 $2,478 person. These losses result in Age 65+ years 

large part from the estimated Age 65–74 years 

 $2,403 $455 $2,858 increase in the probability of Male

being unable to work among Female $1,069 $885 $1,954 

people with a reported stroke— Age 75+ 

6 percentage points higher than Male $2,015 $417 $2,432 

average for the over-65 Female $961 $759 $1,720 

population. For those with a 

stroke diagnosis who did work (4.8 percent), we estimated that females had about 3.2 work-loss days that 

could be attributed to stroke, while males had 1.7. 

4-9

Our estimates of annual household productivity losses among those with a stroke diagnosis range 

from approximately $420 to $890. Although these estimates appear to be fairly low, because of the 

relatively low value of household productivity in older adults ($11,000 to $16,000 per year), we estimated 

that the annual number of bed-loss days attributable to stroke was 20.4 for females and 13.5 for males. 

These estimates suggest that stroke has a large impact on the ability of older people to perform simple 

household duties, including cooking, cleaning, or even providing care for grandchildren. Total labor and 

household productivity losses associated with stroke for the 65 years and older population are almost 

$2,500 per person per year. 

4.3.4 Indirect Costs: Mortality 

As reported in Table 4-15. Indirect Costs Resulting from Increased Table 4-15, the productivity Mortality Associated with Stroke—Estimated losses associated with stroke Aggregate Productivity Losses by Age Category as the cause of death are very 

high. We estimate that Aggregate Labor Aggregate Labor and 

approximately 156,000 Number Productivity Household 

Americans over 65 years of Losses Productivity Losses 

would have likely died from Age Deaths (in 1,000s) (in 1,000s) 

stroke in 2000. Over 40 Age 65+ years 156,000 $2,079,434 $10,423,691 

percent of those estimated Age 65–74 years 25,053 $1,277,826 $4,768,713 

deaths were among people Age 75–84 years 59,972 $801,608 $5,654,978 

over 85 years of age. The Age 85+ years 70,975 — — 

present value of labor 

productivity losses resulting Notes: Stroke diagnosis in mortality data is based on ICD-9 codes 430-438. 

from stroke deaths exceeds $2 Mortality related indirect costs for 85+ not estimated due to lack of data on 

billion. However, because a expected productivity for this age group. 

high percentage of the 65 years and older population is retired (about 73 percent based on our analysis of 

NHIS), the present value of labor and household productivity losses is far higher and is estimated to 

exceed $10 billion annually. 

4.4 Lung Cancer 

Compared to the other health Table 4-16. Costs of Illness Associated with Lung 

conditions examined in this report, Cancer—Estimated Aggregate Costs in 

the prevalence of lung cancer among 2000 for Individuals 65 and Older 

the elderly is relatively low; 

however, the mortality rate and Number of 

Affected Mean Cost Aggregate average costs of illness are Cost Category Individuals ($/person) Costs comparatively high. As shown in 

Table 4-16, roughly 116,000 deaths Direct Costs 

393,853 $10,859 $4,276,854,803 in the 65 and older population were Medical 

primarily attributable to lung cancer Prescription drug 393,853 — —

in 2000, and the aggregate costs of Nursing home 17,760 — —

Indirect Costs illness were estimated to be $4.4 

billion, even excluding prescription Morbidity 393,853 $401a $157,935,240 

drug costs, nursing home costs, and Mortality 116,360 — $15,182,419 

most morbidity-related productivity Total Costs of Illness — — $4,449,972,462 

losses (due to data limitations). 

Further details regarding the aDoes not include household productivity losses. Prescription drug and 

estimated direct and indirect costs nursing home costs not included due lack of sufficient data. 

associated with lung cancer are described below. 

4-10

4.4.1 Direct Costs: Medical 

Estimates of medical costs associated with lung cancer among Medicare fee-for-service elderly 

beneficiaries are summarized in Table 4-17. Using CAHPS-MFFS data, we estimate that about 300,000 

(1.2 percent of) beneficiaries suffered from lung cancer in 2000. This rate is lower than any of the other 

conditions examined, but the average medical costs per affected beneficiary, estimated to be nearly 

$11,000, are almost twice as high as even CLD and IHD. As shown in Table 4-16, extrapolating these 

prevalence and average cost estimates to the entire noninstitutionalized population of adults over 65 in 

2000 results in an aggregate estimate of medical costs from lung cancer of $4.3 billion.. 

Table 4-17. Direct Medical Costs Associated with Lung Cancer—Number of Beneficiaries 

and Average Medical Payments by Type of Service and Age-Gender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95%CI (±) Mean 95%CI (±) 

Total 306,853 1.2 (1.1,1.2) 10,859 (9,963, 11,756) 

Type of Medical Service 

Inpatient 139,141 0.5 (0.5, 0.6) 15,308 (14,030, 16,587) 

Physician 234,149 0.9 (0.8, 0.9) 3,070 (2,502, 3,638) 

Hospital outpatient 148,165 0.6 (0.5, 0.6) 2,725 (2,334, 3,116) 

Home health 25,928 0.1 (0.1, 0.1) 2,093 (1,570, 2,616) 

Durable medical equipment 21,118 0.1 (0.1, 0.1) 1,195 (885, 1,505) 

Age-Gender Category 

Age 65–74 Years 

Male 75,239 1.3 (1.2, 1.4) 11,949 (10,356, 13,542) 

Female 71,305 1.0 (0.9, 1.1) 10,920 (9,119, 12,721) 

Age 75–84 Years 

Male 66,395 1.8 (1.6, 1.9) 10,575 (8,363, 12,788) 

Female 61,153 1.0 (0.9, 1.2) 11,341 (9,083, 13,599) 

Age 85+ Years 

Male 14,594 1.4 (1.1, 1.8) 7,223 (4,851, 9,595) 

Female 18,167 0.7 (0.6, 0.9) 8,443 (5,235, 11,652) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

As with all of the other conditions examined in this report, the prevalence of lung cancer among 

older Americans is significantly higher for males than for females; however, the rates of lung cancer are 

relatively stable across the three age categories——for females they vary between 0.7 and 1 percent and 

for males they vary between 1.3 and 1.8 percent. In contrast, the estimated average medical costs are not 

significantly different between men and women. Estimated average costs are somewhat lower for men 

and women in the highest age group (85 and older), going from about $11,000 to $8,000, but this 

difference is only statistically significant for men. 

4.4.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

The 2000 MEPS contained information about only a handful of older people with lung cancer. 

Because of the small number of observations in MEPS on people with lung cancer, we were unable to 

generate reliable estimates of the excess prescription drug costs for age and sex subgroups for people with 

lung cancer. However, to be consistent with our analysis for the other five conditions, we generated 

4-11

incremental cost estimates for age and sex subgroups with at least three observations, and these estimates 

are reported in Table 4-18. The estimated incremental cost of prescription drugs for the 65 years and 

older population with lung cancer is about $1,400 per year. This estimate is not quite statistically 

significant at the 95 percent confidence level, but the large mean suggests that the prescription drug costs 

associated with lung cancer among the elderly are substantially larger than prescription drug costs in 

those without lung cancer. Due to the very small sample sizes associated with these estimates, they are 

not included in our aggregate cost of illness estimates. 

Table 4-18. Other Direct Costs Associated with Lung Cancer—Incremental Cost 

Estimates for Prescription Medications and Nursing Home Services by AgeGender Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 


Age Size Year) 95% CI (±) 
 Size Year) 95% CI (±) 

Age 65+ years 14 $1,351 (–117, 2,819) 29 $5,367 (–4,085, 14,820) 

Age 65–74 years 

Male 4 $2,279 (–1,993, 6,550) 5 ($14,492) (–36,609, 7,625) 

Female 2 — — 4 $13,049 (–13,390, 39,489) 

Age 75–84 years 

Male 2 — — 3 ($8,267) (–16,502, -33) 

Female 3 $2,414 (1,470, 3,358) 6 $16,867 (–18,764, 52,499) 

Age 85+ years 

Male 1 — — 5 $11,099 (–614, 22,812) 

Female 2 — — 6 ($717) (–13,883, 12,448) 

Notes: Lung cancer diagnosis based on ICD-9 codes of 162, 197, and 231. Sample weights used and complex 

survey design taken into account in calculating standard errors. () denotes a negative value. 

The number of individuals in the NNHS with lung cancer listed as a diagnosis was also relatively 

small (three to six observations per age and sex subgroup). Our estimates of incremental nursing home 

costs for people with lung cancer vary widely, and none is significantly different from zero. Because of 

the small samples and resulting large standard errors, it is difficult to draw any conclusions about the 

likely impact of lung cancer on nursing home costs from these findings. 

4.4.3 Indirect Costs: Morbidity 

The indirect costs resulting from increased morbidity in people with a lung cancer diagnosis, as 

summarized in Table 4-19, are based solely on the estimated increased probability of being unable to 

work among people with lung cancer. Among the 41 respondents in NHIS with a lung cancer diagnosis, 

the probability of being unable to work was about 1.3 percentage points higher than for analogously 

defined individuals without lung cancer. Resulting cost estimates are $211 to $530 per year, and average 

$400 per year across all age and sex subgroups. The work loss days attributable to lung cancer could not 

be estimated precisely because of the small percentage of those over 65 years with lung cancer who 

reported working (about 7 percent). Further, lung cancer was not considered in our analysis of the 

number of bed days attributable to a health condition. 

4-12

Table 4-19. Morbidity-Related Indirect Costs Associated with Lung Cancer—Estimated 

Annual Per-Person Productivity Losses by Age-Gender Category 

Age Labor Productivity Household Productivity Total Productivity Losses 

Age 65+ years $401 — — 

Age 65–74 years 

Male $530 — — 

Female $234 — — 

Age 75+ years 

Male $444 — — 

Female $211 — — 

4.4.4 Indirect Costs: Mortality 

Mortality estimates for lung cancer are presented in Table 4-20. The estimated number of deaths 

among those 65 years and older with lung cancer as the cause is about 116,000 in 2000—somewhat 

higher than the estimated number of deaths from CLD yet lower than the estimated number of stroke 

deaths. Almost 50 percent of these deaths were in the 65 to 74 years age group and resulted in high 

estimated productivity losses. Estimated labor productivity losses resulting from lung cancer mortality 

have a present value of $3.5 billion; estimated labor and household productivity losses have a present 

value of $15 billion. 

Table 4-20. Mortality-Related Indirect Costs Resulting Associated with Lung Cancer— 

Estimated Aggregate Productivity Losses by Age Category 

Aggregate Labor Aggregate Labor and 

Number of Productivity Losses Household Productivity Losses 

Age Deaths (in 1,000s) (in 1,000s) 

Age 65+ years 116,360 $3,507,104 $15,182,419 

Age 65–74 years 56,402 $2,876,801 $10,735,918 

Age 75–84 years 47,156 $630,303 $4,446,501 

Age 85+ years 12,802 — — 

Notes: Lung cancer diagnosis in mortality data is based on ICD-9 codes of 160-161 and 163-165 and excludes


197 and 231 


4.5 Pneumonia 

As summarized in Table 4-21, we estimate that approximately 1.9 million older Americans 

experienced pneumonia in 2000, and pneumonia was the primary cause of about 83,000 deaths in 

individuals 65 and older. Based on these estimates, we calculated aggregate direct and indirect (except 

for morbidity) costs from pneumonia in this population to be approximately $11 billion. These results are 

further described and disaggregated in the sections below. 

4-13

Table 4-21. Costs of Illness Associated with Pneumonia—Estimated Aggregate Costs 

in 2000 for Individuals 65 and Older 

Number of Affected Mean Cost 

Cost Category Individuals ($/person) Aggregate Costs 

Direct Costs 

Medical 1,779,693 $5,623 $10,007,215,290 

Prescription drug 1,779,693 $302 $537,467,369 

Nursing home 78,440 $4,987 $391,180,280 

Indirect Costs 

Morbidity 1,779,693 — — 

Mortality 83,264 — $4,695,729 

Total Costs of Illness — — $10,940,558,668 

Notes: Morbidity related indirect costs not estimated due to lack of data. 

4.5.1 Direct Costs: Medical 

Table 4-22 summarizes our estimates of medical costs associated with pneumonia. Among 

Medicare fee-for-service beneficiaries in 2000, we estimate that almost 1.4 million (5.3 percent of) 

beneficiaries aged 65 and older suffered from pneumonia. The annual medical costs per beneficiary 

averaged $5,600 per year, which is very similar to the average estimates for CLD and IHD. Extrapolating 

these prevalence and average cost estimates to the entire noninstitutionalized population of adults over 65 

in 2000, we estimate aggregate medical costs associated with pneumonia to be $10 billion (shown in 

Table 4-21). 

The prevalence of pneumonia was found to be significantly higher among males and among those 

in the higher age categories. For women 65 to 74, rates of pneumonia were about 3.3 percent compared 

to 4.1 percent for males of the same ages. For those 85 years and older, rates of pneumonia were 8.2 and 

12.3 percent, respectively, for females and males. The average medical costs for pneumonia showed 

relatively little variation across age and gender categories, varying between $5,100 and $6,000. 

4.5.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

We used the 2000 MEPS to assess the incremental prescription drug costs associated with 

pneumonia and the 1999 NNHS to estimate incremental nursing home costs associated with pneumonia. 

As described in Table 4-23, our findings suggest that excess prescription drug costs for people who 

reported having pneumonia during the study year were fairly low and were only significantly different 

from zero for females in the 75 to 84 years age group. However, estimated incremental costs for the full 

over-65 population with a pneumonia diagnosis are significantly different from zero—about $300 per 

person per year. 

Incremental nursing home costs for people who had pneumonia were generally positive and quite 

large, ranging from about $3,500 for the oldest females to $15,000 for 75 to 84 year-old males. Although 

none of the estimates is significantly different from zero, the large standard errors on the mean estimate 

are due in large part to the wide variation in nursing home costs and the relatively small number of 

individuals who had pneumonia as a diagnosis. For the total population over 65 years, the incremental 

cost estimates suggest that a pneumonia diagnosis is associated with significantly higher nursing home 

costs, averaging about $5,000 per person per year. 

4-14

Table 4-22. Direct Medical Costs Associated with Pneumonia—Number of Beneficiaries 

and Average Medical Payments by Type of Service and Age-Gender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95%CI (±) Mean 95%CI (±) 

Total 1,386,567 5.3 (5.2,5.4) 5,623 (5,305, 5,940) 

Type of Medical Service 

Inpatient 646,530 2.5 (2.4, 2.6) 11,028 (10,436, 11,619) 

Physician 1,078,170 4.1 (4.0, 4.2) 310 (295, 324) 

Hospital outpatient 321,993 1.2 (1.2, 1.3) 298 (252, 344) 

Home health 111,684 0.4 (0.4, 0.5) 1,837 (1,662, 2,012) 

Durable medical equipment 28,733 0.1 (0.1, 0.1) 1,089 (834, 1,345) 

Age-Gender Category 

Age 65–74 Years 

Male 241,755 4.1 (3.9, 4.4) 5,626 (4,903, 3,650) 

Female 229,631 3.3 (3.1, 3.5) 5,103 (4,341, 5,866) 

Age 75–84 Years 

Male 270,826 7.1 (6.8, 7.5) 5,915 (4,935, 6,894) 

Female 306,271 5.2 (4.9, 5.4) 5,638 (5,018, 6,2596) 

Age 85+ Years 

Male 125,536 12.3 (11.4, 13.3) 5,394 (4,707, 6,082) 

Female 212,548 8.2 (8.0, 9.0) 5,950 (5,275, 6,564) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

Table 4-23. Other Direct Costs Associated with Pneumonia—Incremental Cost Estimates 

for Prescription Medications and Nursing Home Services by Age-Gender 

Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 

Age Size Year) 95% CI (±) Size Year) 95% CI (±) 

Age 65+ years 145 $302 (64, 540) 175 $4,987 (824, 9,151) 

Age 65–74 years 

Male 26 ($199) (–490, 91) 11 ($5,160) (–23,978, 13,658) 

Female 48 $348 (–193, 889) 8 $3,995 (–4,739, 12,730) 

Age 75–84 years 

Male 18 $214 (–166, 595) 24 $14,890 (–868, 30,648) 

Female 35 $882 (489, 1276) 30 $4,182 (–7,699, 16,064) 

Age 85+ years 

Male 6 ($293) (–665, 79) 34 $4,968 (–2,685, 12,621) 

Female 12 $42 (–530, 616) 68 $3,486 (–2,057, 9,028) 

Notes:. Pneumonia diagnosis based on ICD-9 code of 480-486 and 487. Sample weights used and complex survey 

design taken into account in calculating standard errors. () denotes a negative value. 

4-15

4.5.3 Indirect Costs: Morbidity 

Because pneumonia was not reported in the NHIS, we were unable to estimate the costs of 

increased morbidity attributable to pneumonia. 

4.5.4 Indirect Costs: Mortality 

Mortality costs represent the present value of all future earnings (earnings and household 

productivity) losses resulting from pneumonia, discounted at 5 percent. These costs are reported in 

Table 4-24 and are estimated to exceed $916 million in labor market earnings losses alone. The present 

value of earnings and household productivity losses resulting from pneumonia deaths is almost $4.7 

billion. The estimated number of deaths with pneumonia indicated as the cause of death is approximately 

83,000, with over half of deaths occurring among those 85 years and older. 

Table 4-24. Mortality-Related Indirect Costs Associated with Pneumonia—Estimated 


Aggregate Productivity Losses by Age Category


Aggregate Labor Productivity Aggregate Labor and 

Number of Losses Household Productivity Losses 

Age Deaths (in 1,000s) (in 1,000s) 

Age 65+ years 83,264 $915,661 $4,695,729 

Age 65–74 years 10,408 $530,854 $1,981,091 

Age 75–84 years 28,789 $384,807 $2,714,638 

Age 85+ years 44,067 $0 $0 

Notes: Pneumonia diagnosis in mortality data is based on ICD-9 code of 480-486 

4.6 Gastrointestinal Illness 

Of the six health 

conditions examined in this Table 4-25. Costs of Illness Associated with Gastrointestinal 

report for older Americans, Illness—Estimated Aggregate Costs in 2000 for 

gastrointestinal illnesses are Individuals 65 and Older 

estimated to impose the 

lowest aggregate cost Number of 

Affected Mean Cost Aggregate burden; however, the costs Cost Category Individuals ($/person) Costs are still substantial. As Direct Costs summarized in Table 4-25, 813,519 $1,160 $943,681,600 we estimated that in 2000 Medical 

813,519 $76 $61,827,415 approximately 0.8 million Prescription drug 

older Americans Nursing home 35,520 — — 

experienced gastrointestinal Indirect Costs 

illnesses that were severe Morbidity 813,519 — — 

enough to seek medical Mortality 573 — $38,675 

attention, and we calculated Total Costs of Illness — — $1,005,547,690 

aggregate direct and 

indirect costs from Notes: Nursing home costs and morbidity related indirect costs not estimated 

due to lack of sufficient data. gastrointestinal illness in 

this population to be approximately $1 billion (even excluding nursing home and morbidity related 

indirect costs).. 

4-16

4.6.1 Direct Costs: Medical 

Table 4-26 summarizes our estimates of medical costs associated with gastrointestinal illness for 

Medicare fee-for-service beneficiaries in 2000. We estimate that over 600,000 (2.4 percent of) 

beneficiaries aged 65 and older experienced gastrointestinal illness that was severe enough to seek 

medical attention. Of the six conditions analyzed in this report, gastrointestinal illness imposes the lowest 

annual medical costs per affected beneficiary, averaging less than $1,200 per year. When these 

prevalence and average cost estimates were extrapolated to the entire noninstitutionalized population of 

adults over 65 in 2000, we estimate aggregate medical costs associated with gastrointestinal illness to be 

$0.9 billion (shown in Table 4-25). 

Table 4-26. Direct Medical Costs Associated with Gastrointestinal Illness—Number of 

Beneficiaries and Average Medical Payments by Type of Service and AgeGender Category 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Number Percent 95% CI (±) Mean 95% CI (±) 

Total 633,816 2.4 (2.3,2.5) 1,160 (1,057, 1,264) 

Type of Medical Service 

Inpatient 153,738 0.4 (0.4, 0.5) 5,217 (4,860, 5,574) 

Physician 474,861 1.8 (1.7, 1.9) 132 (125, 139) 

Hospital outpatient 184,115 0.7 (0.7, 0.7) 316 (280, 353) 

Home health 11,066 0.0 (0.0, 0.1) 2,505 (1,546, 3,464) 

Durable medical equipment 188 0.0 (0.0, 0.0) 793 (–1,012, 2,597) 

Age-Gender Category 

Age 65–74 Years 

Male 10,530 1.8 (1.6, 1.9) 642 (386, 900) 

Female 175,163 2.5 (2.3, 2.7) 1,133 (908, 1,358) 

Age 75–84 Years 

Male 100,098 2.6 (2.4, 2.9) 1,031 (824, 1,238) 

Female 156,930 2.6 (2.5, 2.8) 1,375 (1,175, 1,574) 

Age 85+ Years 

Male 29,546 3.0 (2.4, 3.4) 1,272 (1828, 1,717) 

Female 67,049 2.3 (2.3, 2.9) 1,685 (1,372, 1,999) 

Note: Geographic weights used to obtain unbiased nationally representatives estimates for Medicare elderly 

population. 

Prevalence rates for gastrointestinal illness were found to be very similar across age and gender 

categories. Only in the 65 to 74 age category were prevalence rates significantly different between men 

and women, with rates for females at 2.5 percent compared to 1.8 percent for males. As with most other 

conditions, the average medical costs for gastrointestinal illness showed relatively little variation across 

age and gender categories, varying between $600 and $1,700 per beneficiary in 2000. 

4.6.2 Direct Costs: Self-Administered Prescription Drugs and Nursing Home Care 

Our analysis of prescription drug costs from the 2000 MEPS, summarized in Table 4-27, suggests 

that the excess costs associated with gastrointestinal illness among those 65 to 74 years of age is $200 to 

$750 per person for year. For the other age groups, our incremental cost estimates and the associated 

confidence intervals indicate that prescription drug costs for those with a gastrointestinal illness diagnosis 

are not significantly different from the prescription costs of those without a gastrointestinal diagnosis. 

4-17

Table 4-27. Other Direct Costs Associated with Gastrointestinal Illness—Incremental 

Cost Estimates for Prescription Medications and Nursing Home Services by 

Age-Gender Category 

Prescription Drug Incremental Costs Nursing Home Incremental Costs 

Mean Mean 

Sample ($/Person/ Sample ($/Person/ 


Age Size Year) 95% CI (±) 
 Size Year) 95% CI (±) 

Age 65+ years 165 $76 (–101, 253) 32 $22,495 (–593, 45,582) 

Age 65–74 years 

Male 34 $749 (438, 1,059) 2 — — 

Female 56 $215 (–167, 596) 1 — —


Age 75–84 years


Male 22 $181 (–327, 690) 
 4 $45,552 (–57,356, 148,461) 

Female 44 ($198) (–489, 93) 11 $11,281 (–6,671, 29,233) 

Age 85+ years 

Male 3 ($685) (–944, -425) 1 — — 

Female 6 $266 (–605, 1,137) 13 $35,123 (–13,532, 83,779) 

Notes: Gastrointestinal illness diagnosis based on ICD-9 codes of 001-009 and 558. Sample weights used and 

complex survey design taken into account in calculating standard errors. () denotes a negative value. 

Our analysis of the excess nursing home costs associated with gastrointestinal illness also 

produced small age and sex subgroups and large resulting standard errors. For the 65 to 74 years age 

group, only three individuals had a diagnosis of gastrointestinal illness; these observations were excluded 

from our analysis. For the over-65 nursing home population with a diagnosis of gastrointestinal illness, 

estimated incremental costs exceeded $22,000. This estimate was not quite statistically significant and 

may be driven in large part by the presence of other comorbidities that make nursing home residents more 

susceptible to gastrointestinal illnesses. Given the small number of observations and large standard 

errors, it is difficult to draw any conclusions about the likely impact of gastrointestinal illness on nursing 

home costs; therefore, these estimates are not included in our aggregate cost estimates. 

4.6.3 Indirect Costs: Morbidity 

Gastrointestinal illness was not reported in the NHIS. Consequently, we were unable to estimate 

the costs of increased morbidity attributable to gastrointestinal illness. 

4-18

4.6.4 Indirect Costs: Mortality 

As shown in 

Table 4-28, the estimated 

number of deaths in 2000 with 

gastrointestinal illness as the 

cause was much lower than 

estimated deaths for the other 

five conditions. We estimated Aggregate Aggregate Labor 

Labor and Household that about 570 deaths among Productivity Productivity those 65 years and older were Number of Losses Losses 

due to gastrointestinal illness. Age Deaths (in 1,000s) (in 1,000s) 

Because over half of those 

deaths occurred in the 85 years 

and older age group, the 

estimated indirect costs 

resulting from gastrointestinal 

illness mortality are much lower 

than for the other conditions—a 

present value of $7.8 million in 

labor productivity losses and 

$38.7 million in labor and 

household productivity losses combined. 

Age 65+ years 573 $7,837 $38,675 

Age 65–74 years 98 $4,999 $18,656 

Age 75–84 years 212 $2,838 $20,019 

Age 85+ years 263 — — 

Table 4-28. Mortality-Related Indirect Costs Associated 

with Gastrointestinal Illness—Estimated 

Aggregate Productivity Losses by Age 

Category 

Notes: Gastrointestinal illness diagnosis in mortality data is based on ICD-9 

codes of 004 and 006-009 and excludes 001-003, 005, and 558.9. 

Mortality related indirect costs for 85+ not estimated due to lack of data 

on expected productivity for this age group. 

4-19

5. Discussion of Results 

The population of older Americans is expected to increase rapidly over the next 50 years, and this 

trend presents important challenges in the area of environmental health. Several of the most prevalent 

and costly adverse health conditions among older Americans are known to be associated, at least in part, 

with environmental exposures, and older adults are often more vulnerable to environmental hazards. 

The purpose of this report is to contribute to a better understanding of the cost burden imposed by 

environmentally related health effects among older Americans. In collaboration with EPA, we selected 

six general health conditions for which environmental exposures are known or suspected to be important 

contributing factors. Using available national data, we estimated direct and indirect costs for each of 

these conditions among individuals 65 and older in 2000. 

Of the six conditions analyzed, chronic lung disease and ischemic heart disease are found to have 

the highest prevalence among the older population and to impose the largest aggregate cost. Both 

conditions were found to affect between 10 percent and 20 percent of the elderly population and to 

impose total costs of illness of over $35 billion in 2000. The aggregate medical costs for CLD and IHD 

represent roughly 15 percent and 22 percent respectively of estimated total medical costs among 

individuals 65 and older in the U.S. 

The estimated prevalence and aggregate costs of stroke and pneumonia were both somewhat 

lower, in each case affecting between 5 and 10 percent of older Americans and costing between $10 

billion and $20 billion on aggregate in 2000. As expected lung cancer was found to have the lowest 

prevalence among the elderly population, affecting roughly one percent, but the aggregate costs estimates 

are nonetheless substantial. Even without estimates of self-administered prescription drug costs, nursing 

home costs, or lost household productivity due to morbidity (again due to data limitations), aggregate 

costs were estimated to be $4.5 billion. 

Gastrointestinal illnesses were found to impose the lowest cost burden of the six conditions. 

Affecting approximately two to three percent of the elderly population in 2000, we estimated aggregate 

costs of illness for GIs (without nursing home or indirect morbidity costs) of $1 billion. 

Although the estimates summarized above and described in detail in previous sections provide 

useful and important insights into the costs of illness for these six conditions, several limitation and 

uncertainties associated with these estimates must be recognized. Each of these issues has been discussed 

in previous sections; however, we reiterate them here to ensure that they are properly interpreted. 

First, the cost estimates developed in this report should not be interpreted as those specifically 

attributable to environmental exposures. Unfortunately, the science and empirical evidence regarding the 

epidemiological links between environmental exposures and these health outcomes are not sufficiently 

advanced to estimate reliably this attributable fraction. Consequently, our estimates are more 

appropriately interpreted as upper-bound estimates of environmentally related costs of illness for these 

conditions. 

Second, our estimates of the prevalence of each condition are based on a nationally representative 

sample of Medicare fee-for-service beneficiaries, using ICD-9 codes (as listed in Table 2-1) to identify 

the presence of each condition in 2000. These prevalence estimates are based on claims for services in 

2000. They do not include individuals who had the underlying condition in 2000 but did not seek care; 

therefore, they are likely to underestimate overall prevalence. Moreover, since Medicare FFS covered 

roughly 75 percent of the 65 and older population in 2000, these estimates were extrapolated to the 

remaining 25 percent of the population. This extrapolation is likely to overestimate prevalence in the 

noninstitutionalized non-FFS population and underestimate prevalence in the nursing home population. 

Third, portions of the direct medical cost estimates based on the CAPHS-MFFS data cannot be 

interpreted as being exclusively attributable to the selected conditions. Medicare claims data for 

inpatient, outpatient, and home care costs, include potentially more than one diagnosis code per condition; 

therefore, portions of the reported costs may be attributable to other co-morbid conditions. For this 

5-1

reason, the direct medical cost estimates are best interpreted as providing upper-bound estimates of these 

costs for each condition. 

Fourth, the estimates of prescription drug and nursing home costs are based on considerably 

smaller samples than were used for estimating medical costs; therefore, the confidence intervals for these 

estimates are considerably larger. Estimates based on samples smaller than 100 are reported in Section 4, 

but they were not included in our aggregate estimates (i.e., they were set equal to zero) due to their lack of 

precision. Excluding these values implies that the aggregate direct-costs estimates for stroke, lung cancer, 

and gastrointestinal illness are underestimated; however, the extent of underestimation is not known. 

Fifth, to approximate the portion of prescription drug and nursing home costs that are specifically 

attributable to the selected conditions, we calculated incremental costs (i.e., the difference between 

average costs for those with and without the condition). This approach provides a rather crude 

approximation of attributable costs, and, in some cases, the estimated incremental costs are negative. The 

negative estimates for nursing home costs for IHD were assumed to be implausible and replaced with a 

zero value in our aggregate direct cost estimates. 

Sixth, our estimates of morbidity-related productivity losses are based in part on an analysis of 

additional work loss and bed days using NHIS data. Due to data limitations associated with NHIS, we 

were not able to estimate losses for pneumonia or gastrointestinal illness, and we were able to only 

partially estimate losses for lung cancer. For this reason, the indirect costs for these conditions are 

underestimates. 

Seventh, to estimate the indirect costs resulting from premature mortality, we used NSVR data 

that defined health conditions using slightly different ICD-9 codes. Because of these discrepancies, our 

estimates of mortality costs for CLD, stroke, and lung cancer are slight overestimates of mortality costs, 

while our estimate for gastrointestinal illness is a slight underestimate of actual mortality costs for the 

conditions of interest. 

Finally, to estimate mortality-related costs, we also applied age-specific productivity estimates 

from Grosse (2003). Unfortunately, this source does not provide an estimate for expected productivity 

among those 85 and older. By not including productivity losses (labor or household) for deaths in the 85 

and older age group, we underestimated indirect costs of illness. However, these excluded losses are 

expected to be small relative to the productivity losses in the younger age groups. 

5-2

6. References 


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Brown, R.S., Clement, DG, Hill, JW and Retchin, SM: Do Health Maintenance Organizations 

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6-2

Appendix A 

Review of Cost of Illness Studies for Selected Health Conditions: 

Summaries of Methods, Data Sources, and Findings by Disease 
Table A-1. Chronic Lung Disease 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

A comparison of COPD: U.S. population (data Hospitalization National Hospital Attribute all to the 20three approaches for –COPD and source population), age Discharge Survey disease if primary attributing bronchitis (ICD-9 45 or older 1990 diagnosis: hospitalizations to 491) Prevalence-based –$3,449 per specific diseases in –Emphysema (ICD- hospitalization cost analyses 9 492) –$711 million annual (Ward, M. M., H. S. –Unspecified total Javitz, W. M. Smith, obstructive Attribute portion to and A. Bakst) pulmonary disease disease based on 

(ICD-9 496) position in diagnoses 

and comorbidities: –$3,205 per hospitalization –$2.2 billion annual total Incremental analysis by age and gender cohort: –$2,361 per hospitalization –$1.6 billion annual total 

A-1


A national study of Respiratory Data source population Hospital stays Medical –All respiratory mean 19medical care conditions Prevalence-based Physician visits Expenditure Panel for all services $3,753 expenditures for –All respiratory Nonphysician Survey (1996, –Asthma mean for all respiratory conditions conditions (ICD-9 visits household data) services $2,973 (Yelin, E., et. al.) 491-494, 496, 500, ER visits 

501) Prescriptions –Asthma (ICD-9 filled 493) Home health 

care services Other 
Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title Relevant Medical Study Population Categories Annual Cost Ba

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Ye

Acute exacerbation –Acute 12,379 with AECB and Inpatient –University AECB per 19of chronic bronchitis: exacerbations of 13,904 with all hospitalization HealthSystem hospitalization: disease-specific chronic bronchitis bronchitis Consortium –$6,285 from UMI data issues that influence (AECB) Prevalence-based (per Clinical Database –$6,625 from UHSC the cost-effectiveness –All acute and hospitalization) –University of data of antimicrobial chronic bronchitis Michigan Health All acute and chronic therapy (Saint, S., et. al.)d 

System bronchitis per 

hospitalization: –$6,287 from UMI data –$6,524 from UHSC data 

A-2
American Lung COPD: U.S. Healthcare General info from –Annual cost to nation 20

Association fact –Chronic bronchitis Prevalence-based expenditures ALA $32.1 billion sheet: chronic –Emphysema Indirect costs –Healthcare obstructive expenditures $18.0 pulmonary disease billion (COPD), October –Indirect cost of $14.1 2003 billion (American Lung Association) 
Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

An economic evaluation of asthma in the United States (Wiess, K. B., P. J. 

Asthma (ICD-9 493) 

Adults (18 or over) Prevalence-based 

Hospital inpatient care Emergency room 

–National Center for Health Statistics –National 

–Direct $1,197.8 million –Indirect $1,268.0 million 

19

Gergen, and T. A. Hodgson) 

Hospital outpatient Inpatient physician 

Hospital Discharge Survey –National Ambulatory 

–All $2,465.8 million 

services Medical Care Visits to physician office 

Survey –National Health Interview Survey 

Medications –National Loss of school Medical Care days Loss of work 

Utilization and Expenditure 

Mortality loss Survey 

Capitation, managed care, and chronic obstructive 

COPD: –Chronic obstructive 

5% sample of Medicare beneficiaries, age 65 and over 

Hospital inpatient Hospital 

Medicare data 1992 

Expenditures per capita for all aged Medicare beneficiaries with 

19

pulmonary disease (Grasso, M. E., et. al.) 

bronchitis with or without mention of acute exacerbation (ICD-9 491.2) 

Prevalence-based (total expenditures for one year) 

outpatient Physician Cost of comorbid 

COPD $8,482 (compared to $3,511 for all Medicare beneficiaries) 

–Emphysema (ICD9 492.x) condition 

A-3

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Comparing the national economic burden of five chronic conditions 

–Mood disorders –Diabetes –Heart disease –Asthma 

U.S. nationally representative sample (noninstitutionalized) Prevalence-based 

Direct (health costs) Work loss Total societal 

1996 Medical Expenditure Panel Survey 

Direct per capita health costs for treatment of condition: –Heart disease $6,463 

19

(Druss, B. G., et. al) –Hypertension costs –Hypertension $569 

–Asthma $663 Estimated work-loss costs for persons with condition: –Heart disease $3.8 billion –Hypertension $11.5 billion –Asthma $3.4 billion 

Cost estimates for environmentally related asthma(Farquhar, I., et. al.)c 

Asthma (ICD-9 493) 

Total U.S. populationPrevalencebased 

DirectIndirect include: – Mortality costs– Morbidity costs (lost workdays of patient and reduced 

1987 National Medical Expenditure Survey 

–Total economic cost $14 billion –Direct cost $12 billion–Indirect cost $2 billion 

19

productivity of patient) 

A-4

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Costs of –COPD Representative sample Hospital National health COPD All ages (> 34 19Occupational COPD –Asthma of U.S. population, 65+ inpatient expenditures for years) and Asthma (ICD-9, 490-496) subgroup not included Outpatient 1996 –Total = $18.6 trillion (Leigh, J., P. Prevalence-based (including ER) Expenditures –Per capita = $1,165 Romano, M. Home health allocated to (total cost/estimated Schenker, and K. care COPD and 1996 COPD Kreiss) Physician asthma using data prevalence) 

office visits from: Asthma all ages (> 19 Nursing home –National years) care Hospital –Total = $6.5 trillion Prescription Discharge Survey –Per capita = $445 drugs –Healthcare Cost (total cost/ estimated Medical and Utilization 1996 asthma supplies (e.g., Project prevalence) oxygen) –National Other medical Ambulatory Med services Care Survey 

–National Hospital Ambulatory Med Care Survey 

A-5


(continued) 
Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Direct medical cost of chronic obstructive pulmonary disease in the U.S.A. 

COPD: –Chronic bronchitis (ICD-9 491) –Emphysema (ICDData source population Prevalence-based Hospitalization Inpatient physician services –1990 National Hospital Discharge Survey –1993 Medicare Total annual U.S. payment for care $6.6 billion 19

(Ward, M. M., et. al.) 9 492) 

–Unspecified obstructive pulmonary disease 

Emergency department visits Outpatient 

Public Use Files –1993 National Hospital Ambulatory 

(ICD-9 496) diagnostic/scre 

ening procedures Nursing home 

Medical Care Survey –1990 National Ambulatory 

stays Hospice care Home 

Medical Care Survey –National 

healthcare Hospital Prescription medications 

Ambulatory Medical Care 

Long-term oxygen therapy. 

Survey (outpatient visits) –1992 National Home and Hospice Care Survey (home healthcare component) –1985 National Nursing Home Survey –1987 National Medical Expenditure Survey 

A-6

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Direct medical costs COPD: U.S. (population of data Inpatient care –1993 National –COPD cost per 19of chronic obstructive –Chronic bronchitis sources) (hospital stays Hospital prevalent case: total pulmonary disease: (ICD-9 490, 491) Prevalence-based and hospital Discharge Survey direct costs $896 chronic bronchitis –Emphysema (ICD- inpatient –Healthcare Cost –Chronic bronchitis and emphysema 9 492) doctor visits) and Utilization cost per prevalent case: (Wilson, L., E. B. Outpatient care Project total direct costs $816 Devine, and K. So) (doctor visits, –1993 National –Emphysema cost per 

laboratory tests Ambulatory prevalent case: total and Medical Care direct costs $1341 medications) Survey Emergency –National care and home Ambulatory and long-term Medical Care care (home Survey: healthcare, Outpatient including Department equipment and –National supplies; and Ambulatory nursing home Medical Care visits) Survey: 

Emergency Department 1993 –National Home and Hospice Care Survey –Other sources of cost estimates (such as clinicians) 

A-7

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title Relevant Medical Study Population Categories Annual Cost Ba

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Ye

Economic analysis of –COPD U.S. population, mean Inpatient Confronting –Direct cost $4,119 20the Confronting –Chronic bronchitis age 63 hospitalization COPD survey –Indirect cost $1,527 COPD survey: an –Emphysema Prevalence-based Oxygen (telephone –Societal cost $5,646 overview of results –Had symptoms therapy interviews with (Wouters, E. F.) consistent with Prescribed patients and 

chronic bronchitis medication physicians) 

Influenza vaccination Laboratory tests Scheduled visits to PCP or specialist Unscheduled visits to PCP or specialist ER visits Lost productivity (work loss days) 

Economic burden of Respiratory Beneficiaries with at Actual cash 1997 claims data Health-care and work- 19respiratory infections infections: least one of the payments by loss costs $4,397 per in an employed –Pneumonia conditions of a national the employer beneficiary (and $6,838 population –Chronic bronchitis Fortune 100 for: per employee) (Birnbaum, H. G., M. –Other specific manufacturer (excludes –Inpatient Morley, P. E. respiratory people over 65) –Outpatient Greenberg, and G. L. infections Prevalence-based –Prescription Colice) (ICD-9 786, 465, drug 

462-463, 466, 461, –Office 473, 490-491, 034, –Other 472, 474, 480-486, Disability costs 460, 464, 487) Absenteeism 

A-8

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Informal caregiving for chronic lung disease among older Americans (Langa, K. M., et. al.) 

Chronic lung disease 

Age 70 years or older, 3 cohorts: no lung disease, lung disease without associated activity limitations, and lung disease with limited associated activity limitations Prevalence-based 

Informal caregiving 

1993 Asset and Health Dynamics Study (AHEAD) 

–Additional yearly cost of informal care per case (lung disease and activity limitation compared to informal care for individuals with no lung disease) $2,200 –National annual cost 

20

of >$2 billion for informal caregiving for chronic lung disease 

Lost income and work limitations in persons with chronic respiratory disorders (Ward, M. M., H. S. Javitz, W. M. Smith, and M. A. Whan) 

Chronic respiratory diseases:–Lung or respiratory problem (general)–Asthma – Bronchitis– Emphysema– Allergic rhinitis– Tuberculosis–Other lung disease 

Civilian, noninstitutionalized U.S. populationPrevalencebased 

Lost earnings (SIPP)Work disability (NHIS, percentage only - no dollar amounts) 

–Survey of Income and Program Participation (October 91-January 92)– National Health Interview Survey (1993-1994) 

Average annual earnings loss for adults with chronic respiratory conditions $3,143 – $5,272, 25-64–$1,267, 65+ 

19

A-9

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Medical Broad range of U.S. Population and Hospital HCFA Personal 65+: 19Expenditures for diseases (ICD-9), age- specific subgroups inpatient Health Care Total = $300.2 billion Major Diseases, 1995 including: Prevalence-based Outpatient Expenditures for Per capita = (Hodgson, T., and A. –Neoplasms (140- (including ER) 1995 –$6,194, 65-74 yrs Cohen) 239) Home health Expenditures for –$10,365, 75-84 yrs 

–Nervous system care each health –$18,877, 85+ and sense organs Physician service allocated (320-389) office visits across age-, sex-, –Circulatory system Nursing home and diagnosis-(390-459) care specific groups –Respiratory system Lab and x-ray using Medicare (460-519) Dental and VA claims –Skin and Ambulance and survey data, subcutaneous tissue services such as: (680-709) Other –National 

professional Hospital services (e.g., Discharge Survey podiatrists, –National optometrists) Medical 

Expenditure Survey –National Health Interview Survey –National Ambulatory Med Care Survey –National Nursing Home Survey 

A-10

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included 

Data 

Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Pharmacoeconomic evaluation of COPD (Hilleman, D. E., N. Dewan, M. Malesker, and M. Friedman) 

–COPD –Emphysema –Chronic bronchitis 

Patients at Creighton University Medical Center Hospital and/or outpatient clinics age 35-80, with COPD (any diagnosis), smokers (at least 20 pack years), and filled at least 70% of their prescriptions in the past year for pulmonary medication Prevalence-based 

Drugs Oxygen therapy Laboratory tests Diagnostic tests Procedures Clinic visits Emergency department visits Hospitalizations 

Original research 

Median treatment costs incurred over the entire duration of follow-up (per patient per year): –Stage I $1,681 –Stage II $5,037 –Stage III $10,812 

20

The burden of COPD in the U.S.A.: results from the Confronting COPD survey (Halpern, M. T., R. H. Stanford, and R. Borker) 

COPD: –Chronic bronchitis –Emphysema 

Age 42-89 (mean age of 64.08), all patients current or former smokers Prevalence-based 

PCP visits (scheduled and unscheduled) Specialists visits (scheduled and unscheduled), Inpatient hospitalization ER visits 

Confronting COPD survey (telephone interviews with patients and physicians) 

Estimated mean annual cost per patient with COPD: –Total direct cost $4,120 –Indirect $1,527 –Societal $5,646 

20

Prescription medication (specific Rxs) Laboratory tests General categories of Indirect (work loss) and Societal (direct+indirect) costs 

A-11

Table A-1. Chronic Lung Disease (continued) 

Article Title 

(Authors) 

Relevant 

Medical 

Condition(s) 

Study Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

The cost of asthma in the emergency department and hospital (Stanford, R., T. McLaughlin, and L. J. Okamoto) 

Asthma (ICD-9 493) 

Patients from 27 hospitals across the U.S. with asthma, Oct 1996-Sept 1997, age 18 years or older Prevalence-based (per visit) 

Emergency department Hospitalization 

Premier’s Perspective Comparative Database (PCD) 

–Emergency department only total $234.48 –Emergency department and Hospitalization total $3,102.53 

19

The cost of health conditions in a health maintenance organization (Ray, G. T., et. al.) 

–Asthma –Cerebrovascular disease –COPD –Congestive heart failure –Ischemic heart 

Adult members of an HMO (Kaiser Permanente, Northern California) between July 1995 and June 1996 Prevalence-based 

Hospital Laboratory Radiology Outpatient visit Home health Pharmacy Cost of care 

Original research 

Annual costs attributable to condition (after adjustment for age, gender, and comorbidities): –Asthma $1,009 –Cerebrovascular 

19

disease from non-Kaiser disease $7,114 –Lung cancer –Pneumonia 

Permanente vendors 

–COPD $6,859 –Congestive heart failure $7,176 –Ischemic heart disease $5,169 –Lung cancer $8,612 –Pneumonia $9,499 

A-12

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

The costs of treating COPD in the United States (Strassels, S. A., D. H. Smith, S. 

COPD:–Chronic bronchitis (ICD-9 491)–Emphysema (ICD-9 492)– 

Noninstitutionalized population with COPD, many former or current smokers, over 40 years 

Inpatient admissionsOutp atient clinic visitsOffice 

1987 National Medical Expenditure Survey 

Mean per person direct medical expenditure for people with COPD $6,469 (approximately 

19

D. Sullivan, P. S. Mahajan) 

Chronic airway obstruction, not elsewhere classified (ICD-9 

old (n=228)Prevalencebased (expenditures for one year) 

visits (specialists, generalists, and other)Prescribed 

(households) 25% COPD related) 

496) medicationsEme 

rgency department visitsBed daysRestricted activity daysLost workdays 

The economic burden of COPD (Sullivan, S. D., S. D. Ramsey, and T. A. 

–COPD –Asthma –Influenza –Pneumonia 

U.S. Prevalence-based 

Medical management Medical care services 

Division of Epidemiology National Heart, Lung, and Blood 

–COPD average cost per person per year $1,522 Total annual cost 

19

Lee) –Tuberculosis 

–Respiratory cancer 

Hospitalization Indirect: Mortality and morbidity (loss 

Institute 1996 report 

(direct and indirect): –COPD $23.9 billion –Asthma $12.6 billion, –Pneumonia $7.8 

of work time billion and productivity) 

–Respiratory cancer $25.1 billion 

A-13

Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

The economic burden Non-influenza Nationwide telephone Outpatient –Medical Extrapolated to U.S. 20of non-influenza- related viral survey of U.S. physician visits Expenditure population: related viral respiratory households Physician Panel Survey –Total $40 billion respiratory tract infection (VRTI) Prevalence-based encounters in an (1997) –Direct $17 billion infection in the (cold with emergency –National Health –Indirect $22.5 billion United States complications department Interview (Fendrick, A. M., A. including acute Treatment Survey S. Monto, B. sinusitis, otitis OTC medication –Bureau of Nightengale, and M. media, and lower Prescription Labor Statistics Sarnes) respiratory medication –Epidemiologinfections) Missed ical survey 

caregiver (utilization only) workdays Missed workdays/Absen teeism 

A-14


The Morbidity and COPD and allied Total U.S. population Direct Survey data –Total economic cost 19Mortality Chartbook conditions (ICD-9 Prevalence-based Indirect: from: $37.3 billion on Cardiovascular, 490-496) –Mortality –National Center –Direct cost $21.6 Lung, and Blood –Morbidity (loss for Health billion Diseases, 1996, of workdays) Statistics –Indirect cost $16.2 National Heart, Lung, –Health Care billion and Blood Institute, Financing May 1996c Administration 

–Other 
Table A-1. Chronic Lung Disease (continued) 

Cost 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study Population 

Description 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Ba

Ye

Treatment cost of Acute 280,830 COPD patients Hospital –Medicare Mean hospital cost: 19acute exacerbations exacerbations of (Medicare and non- Physician claims data –$5,497 over 65 of chronic bronchitis chronic bronchitis Medicare) Drug –National –$5,561 under 65 (Niederman, M. S., et. al.)d 

(AECB) Prevalence-based Healthcare and 

Cost Utilization 

–$5,516 all ages 

Project –National Ambulatory Med Care Survey –National Hospital Ambulatory Medical Care Survey 

aPublication year used as base year 
bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004.
cAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of the Director,. Na

Dept of Health and Human Services. 

dAs reviewed in Halpern MT, Higashi MK, Bakst AW, Schmier JK. 2003. “The economic impact of acute exacerbations of chronic bronchitis in the 

literature review.” J Manag Care Pharm Jul-Aug; 9(4): 353-9. Review. 

A-15

Table A-2. Ischemic Heart Disease 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

American Heart Cardiovascular U.S. Hospital –Hodgson, T. A. and A. J. –Heart disease: direct - 2004 Association. disease (ICD-9 390- population Nursing home Cohen. 1999. “Medical $130.6 billion, indirect - Heart Disease and 459, 745-747): (depends on Physicians/other care expenditures for $108.0 billion, total - Stroke Statistics - –Heart disease data source) professionals selected circulatory $238.6 billion 2004 Update. Economic cost of 

–Coronary heart disease 

Prevalencebased Drugs/other medical durables diseases: opportunities for reducing national health –Coronary heart disease: direct - $66.3 

cardiovascular diseases. 

–Stroke –Hypertensive 

Home health care Lost 

expenditures.” Medical Care 37:994-1012. 

billion, indirect - $66.9 billion, total - $133.2 

disease productivity/morb –National Health billion –Congestive heart idity Expenditures Amounts, –Stroke: direct - $33.0 failure Lost and Average Annual billion, indirect - $20.6 –Total cardiovascular productivity/mort Percent Change, by Type billion, total - $53.6 disease ality of Expenditures: Selected billion 

Calendar Years 1980-2012 –Hypertensive disease: (cms.hhs.gov). direct - $41.5 billion, –Rice, D. P., T. A. indirect - $14.0 billion, Hodgson, and A. N. total - $55.5 billion Kopstein. 1985. “The –Congestive heart economic cost of illness: a failure: direct - $26.7 replication and update. billion, indirect - $2.1 Health Care Financ Rev billion, total - $28.8 7:61-80. billion –Historic Income tables - –Total cardiovascular People (census.gov) disease: direct - $226.7 –Deaths for 358 Selected billion, indirect - $141.7 Causes by 5-Year Age Groups, Race, and Sex, 

billion, total - $368.4 billion 

United States, 2000 (cdc.nchs/default/htm). –Rice, Max, Michel, and Sung. 2003. “Present Value of Lifetime Earnings, U.S. 2000.” Unpublished tables, Institute for Health and Aging, University of California, San Francisco. 

A-16

Table A-2. Ischemic Heart Disease (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Comparing the –Mood disorders U.S. Direct (health 1996 Medical Expenditure Direct per capita health 1996 national economic –Diabetes nationally costs) Panel Survey costs for treatment of burden of five –Heart disease representative Work loss condition: chronic –Asthma sample Total societal –Heart disease $6,463 conditions –Hypertension (noninstitutio costs –Hypertension $569 (Druss, B. G., et. nalized) –Asthma $663 al) Prevalence- Estimated work-loss 

based costs for persons with 

condition: –Heart disease $3.8 billion –Hypertension $11.5 billion –Asthma $3.4 billion 

Cost of Ischemic heart Patients at Average monthly Original research Total cost $220.31 per 1999a medications for disease (chronic) Camden-On- medication month for medication patients with (ICD 410-414) Gauley (cardiac and ($104.77 of that for ischemic heart Medical noncardiac, out- cardiac medication) disease in a rural Center in of-pocket and family practice West Virginia reimbursed) center with chronic (Patricoski, C.T., ischemic and G. Steiner) heart disease, 

age 30-97 (104 patients) Prevalencebased 

A-17

Table A-2. Ischemic Heart Disease (continued) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

Healthcare Use –Cardiovascular Representativ Hospital inpatient For utilization: All ages (45+), 1997 among U.S. disease e sample of Physician office –Healthcare Cost and Total: Women Aged 45 –Breast neoplasms U.S. women Hospital Utilization Project –Cardiovascular and Older –Gynecological 45 and older outpatient –National Ambulatory Medical disease = $60.4 (Hoerger, T., et. neoplasms Prevalence- Emergency Care Survey billion al.) –Osteoporosis based department –National Hospital Ambulatory –Breast and 

Nursing home Medical Care Survey gynecological Home and –National Nursing Home neoplasms = $5.0 hospice care Survey billion 

–National Home and Hospice Survey For cost: –Converted charges to costs using cost-to-charge ratio –Medicare fee calculated using Medicare’s resource-based relative value scale (RBRVS) –Or used information from literature 

Medical Broad range of U.S. Hospital inpatient HCFA Personal Health Care 65+: 1995 Expenditures for diseases (ICD-9), Population Outpatient Expenditures for 1995 Total = $300.2 Major Diseases, including: and age- (including ER) Expenditures for each health billion 1995 –Neoplasms (140- specific Home health care service allocated across age-, Per capita = (Hodgson, T., and 239) subgroups Physician office sex-, and diagnosis-specific –$6,194, 65-74 yrs A. Cohen) –Nervous system and Prevalence- visits groups using Medicare and VA –$10,365, 75-84 

sense organs (320- based Nursing home claims and survey data, such yrs 389) care as: –$18,877, 85+ –Circulatory system Lab and x-ray –National Hospital Discharge (390-459) Dental Survey –Respiratory system Ambulance –National Medical Expenditure (460-519) services Survey –Skin and Other –National Health Interview subcutaneous tissue professional Survey (680-709) services (e.g., –National Ambulatory Med 

podiatrists, Care Survey optometrists) –National Nursing Home 

Survey 

A-18

Table A-2. Ischemic Heart Disease (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

The cost of health –Asthma– Adult HospitalLaborato Original research Annual costs 1996 conditions in a Cerebrovascular members of ryRadiologyOutp attributable to condition health disease–COPD– an HMO atient visitHome (after adjustment for maintenance Congestive heart (Kaiser healthPharmacyC age, gender, and organization failure–Ischemic Permanente, ost of care from comorbidities): – (Ray, G. T., et. heart disease–Lung Northern non-Kaiser Asthma $1,009– al.) cancer–Pneumonia California) Permanente Cerebrovascular disease 

between July vendors $7,114–COPD $6,859– 1995 and June Congestive heart failure 1996Prevalen $7,176–Ischemic heart ce-based disease $5,169–Lung 

cancer $8,612– Pneumonia $9,499 

The Morbidity –Heart diseases U.S. Direct Survey data from: Total economic cost: 1999 and Mortality (ICD-9 390-398, 402, population Indirect: –National Center for –Heart disease $183.1 Chartbook on 404-429) Prevalence- mortality and Health Statistics billion Cardiovascular, –Coronary heart based morbidity (loss of –Health Care Financing –Coronary heart disease Lung, and Blood diseases (ICD-9 410- workdays) Administration $99.8 billion Diseases, 1998, 414) –Other Direct: National Heart, Indirect costs from Dr. –Heart disease $101.8 Lung, and Blood Dorothy Rice. billion Institute, October –Coronary heart disease 1998.c $53.1 billion 

Indirect: –Heart disease $81.3 billion –Coronary heart disease $46.7 billion 

A-19


aPublication year used as base year 
bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004.
cAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of the Director,. Na

Dept of Health and Human Services. 
Table A-3. Stroke (Hemorrhagic or Ischemic) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

American Heart Cardiovascular U.S. Hospital –Hodgson, T. A. and A. J. –Heart disease: direct - 2004 Association. disease (ICD-9 390- population Nursing home Cohen. 1999. “Medical $130.6 billion, indirect - Heart Disease and 459, 745-747): (depends on Physicians/other care expenditures for $108.0 billion, total - Stroke Statistics - –Heart disease data source) professionals selected circulatory $238.6 billion 2004 Update. Economic cost of 

–Coronary heart disease 

Prevalencebased Drugs/other medical durables diseases: opportunities for reducing national health –Coronary heart disease: direct - $66.3 

cardiovascular diseases. 

–Stroke –Hypertensive 

Home health care Lost 

expenditures.” Medical Care 37:994-1012. 

billion, indirect - $66.9 billion, total - $133.2 

disease productivity/morb –National Health billion –Congestive heart idity Expenditures Amounts, –Stroke: direct - $33.0 failure Lost and Average Annual billion, indirect - $53.6 –Total cardiovascular productivity/mort Percent Change, by Type billion, total - $53.6 disease ality of Expenditures: Selected billion 

Calendar Years 1980-2012 –Hypertensive disease: (cms.hhs.gov). direct - $41.5 billion, –Rice, D. P., T. A. indirect - $14.0 billion, Hodgson, and A. N. total - $55.5 billion Kopstein. 1985. “The –Congestive heart economic cost of illness: a failure: direct - $26.7 replication and update. billion, indirect - $2.1 Health Care Financ Rev billion, total - $28.8 7:61-80. billion –Historic Income tables - –Total cardiovascular People (census.gov) disease: direct - $226.7 –Deaths for 358 Selected billion, indirect - $141.7 Causes by 5-Year Age Groups, Race, and Sex, 

billion, total - $368.4 billion 

United States, 2000 (cdc.nchs/default/htm). –Rice, Max, Michel, and Sung. 2003. “Present Value of Lifetime Earnings, U.S. 2000.” Unpublished tables, Institute for Health and Aging, University of California, San Francisco. 

A-20

Table A-3. Stroke (Hemorrhagic or Ischemic) (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Effects of stroke Stroke associated Sample of US Hospital Global Utilization of Average cost in 1993 on medical with acute GUSTO I Physician Streptokinase and Tissue baseline hospitalization: resource use and myocardial infarction patients, Stroke procedures Plasminogen Activator for –Stroke $29,242 costs in acute –Hemorrhagic average age Outpatient visits Occluded Coronary –No stroke $20,301 myocardial –Non-hemorrhagic of stroke Institutional care Arteries Study (GUSTO) Baseline medical costs: infarction. cohort 69 and –Hemorrhagic $26,619 GUSTO I no stroke –Nonhemorrhagic Investigators. cohort 60 $33,799 Global Utilization Prevalence- –No stroke $20,301 of Streptokinase based and Tissue Plasminogen Activator for Occluded Coronary Arteries Study (Tung, C. Y., et. al.) Inpatient costs of Cerebrovascular Administrativ All hospital –AMCC 192 Uniform Mean cost per 1992 specific events (stroke): e data set of charges incurred Hospital Discharge Data discharge: cerebrovascular –Subarachnoid all hospital during Set –SAH $39,994 events at five hemorrhage (SAH) discharges hospitalization –Medicare cost to charge –ICH $21,535 academic medical (ICD-9 430) from 5 (changed to costs ratios –ICI $9,882 centers. –Intracerebral academic using cost to –TIA $4,653 (Holloway, R. G., hemorrhage (ICH) medical charge ratio) Mean cost per et. al.) (ICD-9 431) centers in (omitted admission by age: 

–Ischemic cerebral 1992 ambulance cost) –SAH $38,417 under 65 infarction (ICI) (ICD- Prevalence- –ICH $24,126 under 65 9 434 or 436) based –ICI $10,067 under 65 –Transient ischemic –TIA $4,612 under 65 attack (TIA) (ICD-9 –SAH $45,891 over 65 435) –ICH $19,385 over 65 

–ICI $9,777 over 65 –TIA $4,678 over 65 

A-21

Table A-3. Stroke (Hemorrhagic or Ischemic) (continued) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

Lifetime cost of Stroke: U.S. (separate Acute-care costs Medicare claims data Lifetime costs per 1990 stroke in the –Subarachnoid sources for Long-term 1987 National Medical person for first stroke United States hemorrhage (SAH) under and ambulatory care Expenditures Survey occurring in 1990: (Taylor, T. N., et. –Intracerebral over 65) costs Insurance claims data –SAH $228,030 al.) hemorrhage (ICH) 

–Ischemic stroke 

Incidencebased Nursing home costs U.S. Bureau of Economic Analysis –ICH $123,565 –ISC $90,981 

(ISC) (lifetime cost) Costs attributable 

to stroke recurrence Prescription drug costs Indirect costs (market and nonmarket) 

Medical Broad range of U.S. Hospital HCFA Personal Health 65+: Total = $300.2 1995 Expenditures for diseases (ICD-9), Population inpatientOutpatie Care Expenditures for billionPer capita = – Major Diseases, including:– and age- nt (including 1995Expenditures for each $6,194, 65-74 yrs– 1995(Hodgson, Neoplasms (140- specific ER)Home health health service allocated $10,365, 75-84 yrs– T., and A. Cohen) 239)–Nervous system 

and sense organs 

subgroupsPre valence-based 

carePhysician office 

across age-, sex-, and diagnosis-specific groups 

$18,877, 85+ 

(320-389)– visitsNursing using Medicare and VA Circulatory system home careLab claims and survey data, (390-459)– and x-rayDental such as:–National Hospital Respiratory system Ambulance Discharge Survey– (460-519)–Skin and servicesOther National Medical subcutaneous tissue professional Expenditure Survey– (680-709) services (e.g., National Health Interview 

podiatrists, optometrists) 

Survey–National Ambulatory Med Care Survey–National Nursing Home Survey 

A-22

Table A-3. Stroke (Hemorrhagic or Ischemic) (continued) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

National Center Cerebrovascular Total U.S. Direct Framingham Heart Study –Total economic cost 1998 for Health disease (stroke) population Indirect: base data $43.3 billion Statistics, Centers (ICD-9 430-438) Prevalence- –Mortality –Direct cost $28.3 for Disease based –Morbidity (loss billion Control and of workdays) –Indirect cost $15 Prevention billion (Thomas A. Hodgson)c 

National Heart, Lung, and Blood Institute, NIH (Thomas J. Thom)c 

Outcomes and Stroke (ICD-9 342.9, Patients Rehabilitation Original research Average Medicare 1997a costs after hip 430, 431, 432.0, diagnosed facility (Medicare reimbursements Reimbursement during fracture and 432.1, 432.9, 434.0, with Skilled nursing to sample) the 6 months after stroke: A 434.1, 434.9, 436, condition, facility admission: comparison of 437.3, 438) Medicare Acute hospital –RF total $23,133 rehabilitation coverage, 65 Outpatient care –Subacute SNF total settings or older, acute Physician $15,522 (Kramer, A. M., hospital stay Durable medical –Traditional SNF total et. al.) in the last 30 equipment $11,299 

days, and no Home health or previous SNF hospice care or rehab Other admission for this event Prevalencebased 

A-23

Table A-3. Stroke (Hemorrhagic or Ischemic) (continued) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

The cost of health –Asthma Adult members Hospital Original research Annual costs 1996 conditions in a –Cerebrovascular of an HMO Laboratory attributable to condition health disease (Kaiser Radiology (after adjustment for maintenance –COPD Permanente, Outpatient visit age, gender, and organization –Congestive heart Northern Home health comorbidities): (Ray, G. T., et. al.) 

failure –Ischemic heart 

California) between July 

Pharmacy Cost of care 

–Asthma $1,009 –Cerebrovascular 

disease 1995 and June from non-Kaiser disease $7,114 –Lung cancer –Pneumonia 

1996 Prevalencebased 

Permanente vendors 

–COPD $6,859 –Congestive heart failure $7,176 –Ischemic heart disease $5,169 –Lung cancer $8,612 –Pneumonia $9,499 

A-24
 

Variations in –Stroke (ICD-9 430- Stroke or TIA Inhospital MetLife Study Average inhospital 1995 average charges 434.9) as primary charge (hospital charge: for strokes and –Transient ischemic diagnosis, age stay and –Stroke $11,010 TIAs: United attack (TIA) (ICD-9 40 or over physician –TIA $4,940 States, 1995 435-435.9) (approximate charge) (Mushinski, M.) median of 70) 

Prevalencebased (per hospitalization) 

aPublication year used as base year 
bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004. cAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of th

Institutes of Health, Dept of Health and Human Services. 
Table A-4. Lung Cancer 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

Healthcare Use –Cardiovascular Representative Hospital inpatient For utilization: All ages (45+), Total: 1997 among U.S. disease sample of U.S. Physician office –Healthcare Cost and –Cardiovascular Women Aged –Breast neoplasms women 45 and Hospital Utilization Project disease = $60.4 billion 45 and Older –Gynecological older outpatient –National Ambulatory –Breast and (Hoerger, T., neoplasms Prevalence- Emergency Medical Care Survey gynecological et. al.) –Osteoporosis based department –National Hospital neoplasms = $5.0 

Nursing home Ambulatory Medical Care billion Home and Survey hospice care –National Nursing Home 

Survey –National Home and Hospice Survey For cost: –Converted charges to costs using cost-to-charge ratio –Medicare fee calculated using Medicare’s resourcebased relative value scale (RBRVS) –Or used information from literature 

Medical Broad range of U.S. Hospital inpatient HCFA Personal Health Care 65+: 1995 Expenditures diseases (ICD-9), Population and Outpatient Expenditures for 1995 Total = $300.2 billion for Major including: age- specific (including ER) Expenditures for each health Per capita = Diseases, 1995 –Neoplasms (140- subgroups Home health care service allocated across age-, –$6,194, 65-74 yrs (Hodgson, T., 239) Prevalence- Physician office sex-, and diagnosis-specific –$10,365, 75-84 yrs and A. Cohen) –Nervous system based visits groups using Medicare and –$18,877, 85+ 

and sense organs Nursing home VA claims and survey data, (320-389) care such as: –Circulatory system Lab and x-ray –National Hospital Discharge (390-459) Dental Survey –Respiratory system Ambulance –National Medical (460-519) services Expenditure Survey –Skin and Other –National Health Interview subcutaneous tissue professional Survey (680-709) services (e.g., –National Ambulatory Med 

podiatrists, Care Survey optometrists) –National Nursing Home 

Survey 

A-25

Table A-4. Lung Cancer (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Medicare Lung cancer (also Age 65 and Inpatient hospital –Medicare payments –Average payments per 1990 payments from includes breast, older Physician/supplie –National Cancer year $17,371 diagnosis to death prostate, Incidence and r Institute’s Surveillance, –Diagnosis to death for elderly cancer colon/rectum, and Prevalence Outpatient Epidemiology, and End $29,184 patients by stage bladder cancer) (includes one Other Results (SEER) Program Average Medicare at diagnosis estimate of Costs include payments total (also (Riley, G. F., A. annual costs, Medicare lists by age and gender): L. Potosky, J. D. but all others payments for all –Less than 1 year Lubitz, and L. G. are by phase covered services, survival $19,199 Kessler) or from including care for –Initial $17,518 

diagnosis to conditions –Continuing care death) unrelated to $4,305 

cancer. –Pre-final $9,985 

–Final $13,217 

The costs of Lung cancer Data source Direct 1990 National Center for Estimated annual costs 1990 cancer care in the population Overall Health Statistic study of cancer care (U.S. United States: Prevalence- –Morbidity 1990 Malignant implications for based –Mortality neoplasm only): action –Direct by value –Mortality $58,773 (Schuette, H. L., and percentage million (61.1%) T. C. Tucker, M. –Morbidity $8,895 L. Brown, and A. million (10.3%) L. Potosky) –Direct costs $27,458 

(28.6%) 

A-26

Table A-4. Lung Cancer (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

The economic Lung cancer (ICD-9 Total U.S. Direct –National Cancer Direct $5.1 billion 1990 

burden of cancer 162.2-162.9) population Indirect Institute’s Surveillance 

(Brown, M. L., Prevalence- Epidemiology and End 

and L. Fintor)a based Results (SEER) program 

–Medicare claims records (diagnosed between 1974 and 1981) 

The economic burden of COPD (Sullivan, S. D., S. D. Ramsey, 

and T. A. Lee) 

–COPD U.S. –Asthma Prevalence-–Influenza based –Pneumonia –Tuberculosis –Respiratory cancer 

Medical management Medical care services Hospitalization Indirect: Mortality and morbidity (loss of work time and productivity) 

Division of Epidemiology National Heart, Lung, and Blood Institute 1996 report 

–COPD average cost 1993 per person per year $1,522 Total annual cost (direct and indirect): –COPD $23.9 billion –Asthma $12.6 billion, –Pneumonia $7.8 billion –Respiratory cancer $25.1 billion 

A-27


The Period Nonmelanoma skin U.S. Physician office 5% Sample of Medicare Total = $285 million 1995 Prevalence and cancers Medicare treatment charges claims for 1995 Per capita = $329 Costs of Treating (ICD-9 173) population (v. costs) Nonmelanoma age 65 years Skin Cancers in and older Patients over 65 PrevalenceYears of Age based Covered by Medicare (Joseph A., T. Mark, and C. Mueller) 

aAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of th

Institutes of Health, Dept of Health and Human Services. 

bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004. 
Table A-5. Pneumonia 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Efficacy and –Influenza Sample of Hospital Minnesota HMO Cost per enrollee 1993 Cost- –Pneumonia enrollees of HMO inpatient administrative data (adjusted for health Effectiveness (ICD-9 480-487) in Minneapolis; 65 charges (v. status): of Vaccination years or older costs) –With influenza against (approx. 25,000 in immunization = $46 Influenza each claims year) –Without influenza among Elderly Prevalence-based immunization = $67 Persons Living in the Community (Nichol, K, K. Margolis, J. Wuorenma, and T. Von Sternberg) 

A-28
 Hospitalization Pneumonia and 7,527 community Hospitalization Longitudinal study of aging Pneumonia primary 1984 

for pneumonia influenza (ICD-9 dwelling adults (LSOA) (some link to discharge diagnosis: among older 480-487.8, 507- aged 70 and older NHIS) connected to –Median cost $5,100 adults 507.1, 507.8, 997.3) in 1984 (mean age Medicare Automated Data per hospitalization (Callahan, C. of 76.5 in 1984) Retrieval System (Medicare Pneumonia secondary M., and F. D. Prevalence-based Claims data) discharge diagnosis: Wolinsky) (per –Median cost $10,100 

hospitalization) per hospitalization 

Hospitalized Community- Age 65+ with CAP Hospital cost –1997 Medicare Provider Mean hospital cost 1997 community- acquired Pneumonia as admission and Analysis and Review $6,949 acquired (ICD-9 481, 482, diagnosis hospital discharge database pneumonia in 485, or 486) or discharge or (MedPAR) the elderly: bacterial pneumonia bacterial –CB97-64, Population age- and sex- with pulmonary pneumonia listed Estimates Program, U.S. related patterns complaint at as discharge Bureau of the Census of care and admission diagnosis coupled –1997 Provider Specific outcome in the with pulmonary File United States complaint at –Hospital Cost Report (Kaplan, V., et. admission Minimum Dataset al.) Prevalence-based 

(cost per hospital admission) 
Table A-5. Pneumonia (continued) 

Relevant Study Cost 

Article Title Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Outcome and Ventilator ICU patients at Hospitalization Original research Estimated attributable 2003a attributable cost associated Missouri Baptist cost of ventilator of ventilator- pneumonia Medical Center in associated pneumonia associated St. Louis (10 bed (controlling for other pneumonia surgical ICU and factors) $11,897 among intensive 10 bed medical Hospital cost of care unit patients ICU) from Jan. 19, patients, mean: in a suburban 1998, to Dec. 31, –With VAP $70,568 medical center 1999, requiring –Without $21,620 (Warren, D. K., mechanical et. al.) ventilation, mean 

age 69 Prevalence-based (per hospitalization) 

Relation between Community- Patients at 3 Hospital Hospital bills (obtained for Median cost of 2000a length of hospital acquired hospital sites (two roomLaboratory each participant) hospitalization –Total stay and costs of pneumonia in Pittsburgh, PA tests and $5,942 –Hospital room care for patients and one in Boston, proceduresEmer $3,465–Non-room with community- MA) in the gency $2,422 acquired Pneumonia Patient departmentPhar pneumonia(Fine, Outcomes macy and M. J., et. al.) Research Team intravenous 

(PORT) cohort solutionsRadiolo study, age 18 years gy tests and or proceduresOther olderPrevalencebased (cost per hospital stay) 

A-29

Table A-5. Pneumonia (continued) 

Relevant Study Cost 

Article Title Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

The cost of health –Asthma Adult members of Hospital Original research Annual costs 1996 conditions in a –Cerebrovascular an HMO (Kaiser Laboratory attributable to health disease Permanente, Radiology condition (after maintenance –COPD Northern Outpatient visit adjustment for age, organization –Congestive heart California) Home health gender, and (Ray, G. T., et. failure between July 1995 Pharmacy comorbidities): al.) –Ischemic heart and June 1996 Cost of care –Asthma $1,009 

disease Prevalence-based from non-Kaiser –Cerebrovascular –Lung cancer Permanente disease $7,114 –Pneumonia vendors –COPD $6,859 

–Congestive heart failure $7,176 –Ischemic heart disease $5,169 –Lung cancer $8,612 –Pneumonia $9,499 

The Cost of Community Representative Hospital For 65+: 65+: 1995 Treating acquired sample of U.S. inpatient –National Health and –Total = $4.8 billion Community- pneumonia population and 65+ Inpatient Nutrition Examination –Per capita = Acquired (ICD-9 480-487) subgroup physician Survey III (to estimate approximately $8000 Pneumonia Prevalence-based services incidence) (total cost/0.6 million (Niederman, M., Physician office –Medicare Standard people with inpatient J. McCombs, A. visits Analytical Files (Parts A stay) Unger, A. Kumar, Emergency and B; to estimate and R. Popovian) department utilization/costs) 

Outpatient clinic Other facilities (e.g., skilled nursing, nursing home) 

A-30

Table A-5. Pneumonia (continued) 

Article Title 

(Authors) 

Relevant 

Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

The economic –COPD U.S. Medical Division of Epidemiology –COPD average cost 1993 burden of COPD –Asthma Prevalence-based management National Heart, Lung, and per person per year (Sullivan, S. D., –Influenza Medical care Blood Institute 1996 report $1,522 S. D. Ramsey, –Pneumonia services Total annual cost and T. A. Lee) –Tuberculosis Hospitalization (direct and indirect): 

–Respiratory Indirect: –COPD $23.9 billion cancer Mortality and –Asthma $12.6 billion, 

morbidity (loss –Pneumonia $7.8 of work time billion and –Respiratory cancer productivity) $25.1 billion 

A-31


Unpublished Pneumonia and Total U.S. Direct Survey data from: –Total economic cost 1999 (Thomas Thom, influenza (ICD-9 population Indirect: –National Center for Health $25.6 billion NHLBI)c 480-487) Prevalence-based –Mortality Statistics –Direct cost $18.6 

–Health Care Financing billion Administration –Indirect $7.0 billion –Other Indirect costs from Dr. Dorothy Rice. 

aPublication year used as base year 
bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004. cAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of th

Institutes of Health, Dept of Health and Human Services. 
Table A-6. Gastrointestinal Illness 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Cost of Digestive –Digestive diseases Total U.S. Direct Hospital statistics Digestive disease: 1985 Diseases in the (ICD-9 01-09, 070, population Indirect: –Total economic cost U.S. 150, 151, 153-154, Prevalence- –Mortality $56.2 billion (Broun, D. M, and 155, 157, 152, 156, based –Morbidity (loss –Direct cost $41.5 billion J. E. Everhart)* 158, 159, 211, 455, of workdays) –Indirect cost $14.7 

456.0-456.2, 530- billion 579, 787, 789) Gall bladder –Gallbladder (ICD-9 –Total economic cost $4.7 574-575) billion 

–Direct cost $4.4 billion –Indirect cost $0.4 billion 

Excess costs from –Gastrointestinal Tennessee Hospital stay Medicare/Medicaid Adjusted mean annual 1996a gastrointestinal disease Medicaid Outpatient visits payments payment for all types of disease associated –Gastroduodenal enrollees age Prescription medical care for study with nonsteroidal ulcer disease (ICD-9 65 or older (in medication gastrointestinal disorders: anti-inflammatory 531-534) 1989) –Nonuser $134 drugs –Gastritis/duodenitis Prevalence- –Occasional user $180 (Smalley, W. E., (ICD-9 535) based –Regular user $244 M. R. Griffin, R. –Gastrointestinal (payments per L. Fought, and W. hemorrhage (ICD-9 person year) A. Ray) 578) 

–Nonneoplastic gastrointestinal disease (ICD-9 146-171, 174-190) (by procedure for outpatient visits and by type of medication for prescriptions) 

A-32

Table A-6. Gastrointestinal Illness (continued) 

Article Title 

(Authors) 

Relevant Medical 

Condition(s) 

Study 

Population 

Description 

Cost 

Categories 

Included Data Source(s) 

Annual Cost 

Estimate(s) 

Base 

Year 

Gastrointestinal illness in 

Gastrointestinal illness (ICD-9 used 

50,000 patients in database 

Professional charges 

Claims data in a proprietary health 

Total claims submitted $152 million 

1997a 

managed care: healthcare utilization and costs (Lim, D., et. al.) 

to separate into subcategories of GI): –Peptic ulcer disease –Nonulcer peptic disease –Lower GI tract 

who met eligibility criteria Prevalencebased (per episode) 

Nonadmission charges Admission charges Prescriptions 

services research database 

disease –Abdominal pain –Hepatitis –Liver disease –Gallbladder/biliary tract –GI tract hemorrhage –Other GI tract problems 

A-33


Health Impact of Digestive diseases Total U.S. Direct Hospital statistics –Total economic cost 1989 Peptic Ulcer in –Peptic Ulcer (ICD-9 population (including other $4.92 billion the United States 531-534) Prevalence- related –Direct cost $3.55 billion (Sonnenberg, A., based nonhealth costs) –Indirect cost $1.37 et. al.)* Indirect: billion Cost of Digestive –Mortality Diseases in the –Morbidity (loss U.S. of workdays) (Broun, D. M, et. al.)* 
Table A-6. Gastrointestinal Illness (continued) 

Study Cost 

Article Title Relevant Medical Population Categories Annual Cost Base 

(Authors) Condition(s) Description Included Data Source(s) Estimate(s) Year 

Prevalence and Upper Patients with Hospitalization –Healthcare Cost & Average charge per 1991, cost of gastrointestinal upper Utilization Project admission all diagnoses: 1992 hospitalization for complications (peptic gastrointestinal (HCUP-3) –$8,661 in 1991 gastrointestinal and gastroduodenal complications –MarketScan –$9,742 in 1992 complications ulcers with bleeding as diagnosis, Average charge per related to peptic or perforation) (ICD- average age 66 admission with UGIC as ulcers with 9 531.0-6, 532.0-6, (HCUP-3) and primary diagnosis: bleeding or 533.0-6, 534.0-6) 52 –$12,970 in 1991 perforation: (MarketScan) –$14,294 in 1992 comparison of Prevalence- two national based (charge databases per admission) (Kong, S. X., et. al.) The burden of –Nonfoodborne Data source Direct/IndirectH –National Hospital Nonfoodborne: –Total 1998 selected digestive gastroenteritis and populationPrev ospital Discharge Survey– $2,107 million–Direct diseases in the other intestinal alence-based facilityInpatient National Ambulatory $1,602 million–Indirect United infections (ICD-9 physician Medical Care Survey– $505 millionFoodborne: – States(Sandler, R. 001-009 (subset), servicesHospital National Hospital Total $1,119 million– S., et. al.) 558.9)–Foodborne OPDHospital Ambulatory Medical Direct $886 million– 

illness (ICD-9 001- emergency Care Survey Indirect $233 million 009 (subset), 558.9, roomOffice 070.0, 070.1)– visitsDrugsLost Additional digestive work days diseases 

A-34


aPublication year used as base year 
bAnnual Medical Care Consumer Price Index used for conversion. Average of January and February Medical Care CPI used for 2004. cAs reviewed in Kirschstein, R. 2000. “Disease-specific estimates of direct and indirect costs of illness and NIH support.” Office of th

Institutes of Health, Dept of Health and Human Services. 
Appendix B 


Detailed Methods for Estimating Missed Work Days and Bed Days 

Attributable to Stroke, Heart Disease, and Chronic Lung Disease 

In Section 3, we provided a general description of our methods for estimating the indirect costs 

resulting from increased morbidity. This appendix provides additional details on our approach for 

estimating the missed work days attributable to stroke, heart disease, and chronic lung disease. 

We used the 2001 NHIS to predict days of work missed and bed days attributable to each 

condition. For the work-loss days analysis, we restricted our sample to those 65 years and older who 

were employed in the labor market. We also excluded those with missing data. Our final analysis sample 

included only 524 adults. For our bed-days analysis, we restricted the sample to all those 65 years and 

older, regardless of employment status. Our final sample for this analysis included 3,930 older adults. 

Because of the discrete nature of the variables of interest for our analysis (i.e., counts of days of 

work lost and days spent in bed), we used a negative binomial regression with a long link to estimate 

missed work days and bed days for people 65 years and older. By including indicator variables for stroke, 

heart disease, and chronic lung disease, we were able to estimate the impact of each condition on work 

loss and bed days. The regressions also controlled for other factors expected to influence the number of 

missed work days, including sex, race, education, income, smoking status, and a variable indicating the 

presence of a functional limitation (e.g., difficulty walking or standing). The work-loss days regression 

also included variables to control for hourly versus salaried workers and specific categories of 

occupations. The bed-days regression included variables to control for labor-force participation status 

(i.e., working, retired, never worked, etc.). 

Results from these regressions are shown in Tables B-1 and B-2. In the work-loss days analysis, 

our estimates are positive, suggesting that people with a reported stroke, chronic lung disease, and/or 

heart disease have more work-loss days than those with none of these conditions. However, these 

estimates are not statistically significant for any of the conditions. Results from the bed-days regression 

are positive and highly statistically significant for stroke and heart disease, suggesting that those with 

these conditions experience more bed days than those without, even controlling for a number of other 

factors likely to affect serious illness. 

To estimate the dollar value of work-loss and bed days attributable to stroke, heart disease, and 

chronic lung disease, we used the following procedure: 

1.	 Predicted annual work-loss (bed) days for each person in the sample. 

2.	 For those with reported stroke, heart disease, and/or chronic lung disease, repeat Step 1 

setting the indicator variable for the condition to zero. The resulting predictions represent 

estimated work-loss (bed) days for those without the condition of interest who have similar 

characteristics (i.e., sex, race, employment status, etc.). 

3.	 Calculate the difference between predicted work-loss (bed) days for those with and without 

the condition of interest (i.e., subtract value calculated in Step 2 from Step 1 value). This 

calculation produces an estimate of the work-loss (bed) days attributable to each condition. 

4.	 Multiply estimated sex-specific labor earnings (household productivity values) (Grosse, 

2003) by estimates of work-loss days attributable to each condition from Step 3. 

B-1

Table B-1. Missed Work Days Analysis—Negative Binomial Regression (NBR) Results 

Robust 

Variable Descriptions. All except constant term NBR Standard 

are indicator variables that = 1 if: Coefficients Errors P-value 

High school grad –1.04 0.40 0.01 

Had some college –0.77 0.42 0.07 

College grad –0.72 0.59 0.22 

Graduate degree 0.08 0.81 0.92 

Female 0.20 0.43 0.64 

Low income (<200% of poverty line) –1.74 0.90 0.06 

Middle income (<500% of poverty line) –1.72 0.84 0.04 

High income (≥500% of poverty line) –1.47 0.87 0.09 

Former smoker 0.31 0.52 0.55 

Never smoked 0.33 0.48 0.50 

Non-Hispanic white –0.88 0.53 0.10 

Non-Hispanic black 0.28 0.68 0.68 

Non-Hispanic other –2.64 1.04 0.01 

Salaried employee 0.31 0.37 0.40 

No functional limitation reported –1.05 0.31 0.00 

Professional specialty occupation 1.47 0.64 0.02 

Technician or related support occupation 1.33 0.95 0.16 

Sales occupation 1.28 0.53 0.02 

Administrative support occupation 0.91 0.45 0.04 

Private household occupation –3.26 0.89 0.00 

Protective services occupation –1.76 0.85 0.04 

Household 0.27 0.53 0.61 

Farming, forestry, and fishing occupation 0.27 0.95 0.77 

Precision production, craft, and repair occupation 0.56 0.60 0.35 

Operator, fabricator, or laborer 1.37 0.59 0.02 

Transportation or material-moving occupation 0.33 0.82 0.68 

Handler, equipment cleaner, helper, or laborer –0.30 0.89 0.74 

Self-report of STROKE 0.54 0.92 0.56 

Self-report of CHRONIC LUNG DISEASE 0.98 0.69 0.15 

Self-report of HEART DISEASE 0.30 0.39 0.44 

Constant term 2.53 1.14 0.03 

Notes: Estimates only for those 65 years and older in the 2001 NHIS who were currently working. Unweighted 

sample size is 524. 

B-2 
Table B-2. Bed-Days Analysis—Negative Binomial Regression (NBR) Results 

Robust 

Variable Descriptions. All except constant term NBR Standard 

are indicator variables that = 1 if: Coefficients Errors P-value 

High school grad –0.19 0.23 0.40 

Had some college –0.13 0.25 0.60 

College grad –0.47 0.26 0.07 

Graduate degree –0.11 0.31 0.72 

Female 0.27 0.16 0.10 

Low income (<200% of poverty line) 0.04 0.24 0.86 

Middle income (<500% of poverty line) 0.11 0.26 0.68 

High income (>=500% of poverty line) –0.49 0.31 0.12 

Former smoker 0.32 0.21 0.13 

Never smoked 0.04 0.21 0.85 

Smoking status unknown –16.14 0.83 0.00 

Non-Hispanic white –0.26 0.23 0.26 

Non-Hispanic black 0.19 0.29 0.50 

Non-Hispanic other 0.36 0.44 0.42 

Retired 0.81 0.22 0.00 

Not working but previously worked 2.10 0.30 0.00 

Never worked 1.38 0.38 0.00 

No functional limitation reported –1.34 0.18 0.00 

Self-report of STROKE 0.96 0.26 0.00 

Self-report of CHRONIC LUNG DISEASE 0.32 0.21 0.12 

Self-report of HEART DISEASE 0.78 0.18 0.00 

Constant term 0.57 0.38 0.14 

Notes: Estimates only for those 65 years and older in the 2001 NHIS. Unweighted sample size is 3930. 

Our estimates of work loss and bed days attributable to each condition are shown by sex in 

Tables B-3 and B-4, respectively. Among older adults who worked, chronic lung disease was responsible 

for the largest impact on work loss, or about 3 to 4.5 days of missed work per year. Considering bed 

days, stroke was responsible for the largest number of bed days among the three conditions—13 annual 

bed days for males and 20 annual bed days for females. 

Note that, although our estimates for attributable work-loss days are not statistically different 

from zero, we used them to estimate the cost associated with work loss in the 65 and older population that 

works. We chose to include these work-related cost estimates because it is likely that our lack of 

statistically significant results is due to the small overall sample size and the small number with each 

condition of interest. In addition, because only about 5 to 11 percent of those with any of the conditions 

worked, the estimated cost of losing 1 to 4.6 work days per year was low. 

B-3

Table B-3. Predicted Missed-Work Days for Workers 65 Years and Older by Condition 

and Sex 

Number of Predicted Missed-Work Days 

Condition and Sex Respondents Attributable to Condition 

Stroke 

Male 9 1.72 

Female 4 3.19 

Chronic Lung Disease 

Male 30 3.42 

Female 26 4.59 

Ischemic Heart Disease 

Male 72 0.93 

Female 46 1.74 

Note: Predictions of work days missed were calculated using NBR results in Table B-1. 

Table B-4. 	 Predicted Bed Days for Respondents 65 Years and Older by Condition and 

Sex 

Number of Predicted Missed Work Days 

Condition and Sex Respondents Attributable to Condition 

Stroke 

Male 135 13.45445 

Female 209 20.43143 

Chronic Lung Disease 

Male 209 3.036422 

Female 316 4.85797 

Ischemic Heart Disease 

Male 561 6.198227 

Female 669 10.35484 

Note: Predictions of bed days were calculated using NBR results in Table B-2. 

B-4 
Appendix C 

Direct Medical Costs Associated with Selected Health Conditions: 

Annual Medicare Payments in 2000 by Region and State 
Table C-1. Direct Medical Costs Associated with Pneumonia—Annual Medicare 

Payments in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

New England 

Total 75,925 5.5 (5.0, 6.0) 6,719 (5,050, 7,989) 

Connecticut 20,277 6.0 (5.0, 7.0) 6,163 (4,122, 8,204) 

Maine 7,102 4.1 (2.9, 5.3) 5,887 (2,921, 8,843) 

Massachusetts 35,954 6.3 (5.3, 7.3) 8,079 (5,802, 10,355) 

New Hampshire 5,850 4.3 (3.0, 5.5) 2,978 (1,102, 4,854) 

Rhode Island 4,234 4.7 (2.8, 6.5) 6,494 (2,907, 10,081) 

Vermont 2,508 3.5 (1.9, 5.1) 3,192 (245, 6,139) 

Middle Atlantic 

Total 229,597 5.9 (6.0, 6.3) 6,359 (5,218, 7,501) 

New Jersey 49,307 5.8 (5.1, 6.5) 8,740 (4,677, 12,803) 

New York 115,794 6.5 (5.9, 7.1) 6,065 (4,693, 7,436) 

Pennsylvania 64,496 5.2 (4.7, 5.7) 5,068 (4,143, 5,993) 

East North Central 

Total 252,991 5.3 (5.0, 5.7) 4,899 (4,349, 5,449) 

Indiana 33,873 5.0 (4.3, 5.7) 4,963 (3,959, 5,967) 

Illinois 58,323 4.8 (4.0, 5.6) 4,877 (3,590, 6,163) 

Michigan 70,181 6.5 (5.8, 7.3) 4,865 (3,635, 6,094) 

Ohio 65,599 5.7 (5.1, 6.3) 5,133 (4,079, 6,187) 

Wisconsin 25,014 4.0 (3.4, 4.6) 4,347 (3,424, 5,270) 

West North Central 

Total 116,909 5.4 (5.0, 5.8) 5,892 (4,800, 6,984) 

Iowa 21,523 5.4 (4.4, 6.3) 5,015 (3,741, 6,288) 

Kansas 19,598 6.4 (5.2, 7.6) 4,905 (3,551, 6,260) 

Minnesota 19,272 4.1 (3.3, 4.8) 8,023 (2,882, 13,163) 

Missouri 34,387 5.8 (5.0, 6.6) 6,582 (4,641, 8,523) 

Nebraska 10,011 4.8 (3.6, 6.1) 4,683 (2,360, 7,006) 

North Dakota 5,162 5.8 (3.8, 7.8) 2,801 (957, 4,645) 

South Dakota 6,958 6.8 (4.7, 8.9) 6,104 (3,902, 8,306) 

South Atlantic 

Total 249,410 4.8 (4.5, 5.0) 5,076 (4,526, 5,627) 

Delaware 5,529 6.3 4.7, 7.9) 6,843 (4,033, 9,653) 

District of Columbia 2,620 4.8 (2.9, 6.6) 15,097 (2,331, 27,863) 

Florida 72,173 4.3 (3.8, 4.7) 4,568 (3,766, 5,389) 

Georgia 35,091 5.2 (4.5, 5.9) 5,309 (3,808, 6,810) 

Maryland 24,246 5.0 (4.2, 5.9) 6,423 (4,551, 8,295) 

North Carolina 45,245 5.3 (4.7, 5.9) 4,187 (3,414, 4,960) 

South Carolina 20,371 4.6 (3.7, 5.4) 5,261 (3,078, 7,443) 

Virginia 29,932 4.3 (3.7, 5.0) 5,221 (2,623, 7,818) 

West Virginia 14,204 6.0 (4.8, 7.2) 4,515 (3,257, 5,773) 

(continued) 

C-1 
Table C-1. Direct Medical Costs Associated with Pneumonia—Annual Medicare 

Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

East South Central 

Total 101,233 5.5 (5.0, 6.0) 5,363 (4,1538, 6,187) 

Alabama 23,355 4.8 (4.1, 5.6) 5,773 (4,359, 7,187) 

Kentucky 28,643 6.5 (5.5, 7.6) 5,062 (3,537, 6,586) 

Mississippi 16,875 5.4 (4.4, 6.4) 7,021 (4,004, 10,038) 

Tennessee 32,360 5.3 (4.5, 6.0) 4,469 (3,284, 5,653) 

West South Central 

Total 152,602 5.8 (5.4, 6.2) 5,985 (4,950, 7,020) 

Arkansas 18,737 5.7 (4.7, 6.7) 4,665 (2,731, 6,599) 

Louisiana 21,588 5.6 (4.7, 6.5) 6,409 (4,684, 8,133) 

Oklahoma 22,113 5.9 (4.9, 6.9) 5,346 (3,776, 6,917) 

Texas 90,165 5.9 (5.3, 6.4) 6,314 (4,702, 7,926) 

Mountain 

Total 59,498 4.5 (4.0, 5.0) 5,048 (4,170, 5,925) 

Arizona 15,785 4.5 (3.4, 5.6) 4,370 (2,835, 5,904) 

Colorado 11,948 5.1 (4.0, 6.2) 6,821 (4,921, 9,352) 

Idaho 5,589 4.6 (2.8, 6.4) 5,109 (2,304, 7,914) 

New Mexico 6,777 4.5 (3.3, 5.8) 4,730 (2,649, 6,811) 

Montana 3,873 3.4 (1.9, 5.0) 4,683 (1,533, 7,834) 

Utah 8,171 4.8 (3.5, 6.1) 3,296 (1,841, 4,750) 

Nevada 5,530 4.3 (3.0, 5.5) 5,374 (2,173, 8,576) 

Wyoming 1,815 3.4 (1.9, 5.0) 7,946 (–2,312, 18,205) 

Pacific 

Total 131,330 5.0 (4.5, 5.4) 6,304 (5,073, 7,534) 

Alaska 2,080 6.1 (4.1, 8.2) 5,984 (3,352, 8,416) 

California 91,048 5.0 (4.4, 5.6) 7,496 (5,766, 9,225) 

Hawaii 4,606 5.0 (3.5, 6.5) 4,389 (1,710, 7,069) 

Oregon 11,671 4.8 (3.7, 5.8) 3,828 (2,434, 5,222) 

Washington 21,925 5.0 (4.1, 5.8) 3,104 (2,064, 4,143) 

C-2 
Table C-2. Direct Medical Costs Associated with Stroke —Annual Medicare Payments 

in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

New England 

Total 94,443 5.9 (5.4, 6.5) 4,242 (3,288, 5,197) 

Connecticut 25,113 7.5 (6.3, 8.6) 3,045 (1,833, 4,256) 

Maine 10,735 6.2 (4.7, 7.7) 2,770 (1,646, 3,894) 

Massachusetts 40,135 7.1 (6.0, 8.1) 5,334 (3,400, 7,268) 

New Hampshire 9,934 7.2 (5.6, 8.9) 3,111 (1,486, 4,736) 

Rhode Island 4,763 5.3 (3.3, 7.2) 4,731 (1,743, 7,719) 

Vermont 3,762 5.3 (3.3, 7.2) 7,162 (1,017, 13,307) 

Middle Atlantic 

Total 307,495 6.4 (6.0, 6.7) 3,686 (3,237, 4,135) 

New Jersey 71,158 8.4 (7.5, 9.2) 4,478 (3,532, 5,424) 

New York 138,898 7.8 (7.1, 8.4) 3,374 (2,617, 4,131) 

Pennsylvania 97,439 7.8 (7.2, 8.5) 3,552 (2,945, 4,159) 

East North Central 

Total 367,642 7.8 (7.4, 8.2) 3,823 (3,222, 4,424) 

Indiana 52,894 7.8 (7.0, 8.6) 4,014 (3,081, 4,948) 

Illinois 86,491 7.2 (6.2, 8.2) 4,512 (2,593, 6,431) 

Michigan 102,437 9.5 (8.7, 10.4) 2,613 (2,043, 3,184) 

Ohio 91,660 8.0 (7.3, 8.7) 4,380 (3,081, 5,579) 

Wisconsin 34,160 5.4 (4.7, 6.2) 3,911 (2,948, 4,873) 

West North Central 

Total 133,861 6.2 (5.7, 6.6) 3,653 (2,992, 4,314) 

Iowa 25,497 6.4 (5.3, 7.4) 2,585 (1,702, 3,467) 

Kansas 21,262 6.9 (5.7, 8.2) 3,907 (2,397, 5,417) 

Minnesota 17,996 3.8 (3.1, 4.5) 3,461 (1,988, 4,934) 

Missouri 44,835 7.6 (6.7, 8.5) 3,821 (2,749, 4,893) 

Nebraska 13,316 6.4 5.0, 7.9) 5,854 (1,571, 10,137) 

North Dakota 5,323 6.0 (4.0, 8.0) 2,053 (659, 3,446) 

South Dakota 5,453 5.3 (3.4, 7.2) 3,105 (1,218, 4,992) 

South Atlantic 

Total 449,303 8.6 (8.3, 9.0) 3,433 (3,084, 3,783) 

Delaware 8,462 9.6 (7.8, 11.5) 3,862 (2253, 5,471) 

District of Columbia 2,620 4.8 (2.9, 6.6) 4,587 (1,224, 7,949) 

Florida 178,328 10.5 (9.9, 11.2) 3,028 (2,617, 3,440) 

Georgia 54,206 8.1 (7.2, 8.9) 3,322 (2,585, 4,060) 

Maryland 91,854 19.1 (17.6, 20.6) 6,882 (5,687, 8,077) 

North Carolina 61,526 7.2 (6.5, 7.9) 3,076 (2,360, 3,972) 

South Carolina 33,093 7.4 (6.4, 8.4) 4,681 (2,604, 6,758) 

Virginia 55,077 7.9 (7.1, 8.8) 3,391 (1,898, 4,885) 

West Virginia 19,069 8.0 (6.6, 9.4) 3,689 (2,316, 5,062) 

(continued) 

C-3 
Table C-2. Direct Medical Costs Associated with Stroke (Ischemic or Hemorrhagic)— 

Annual Medicare Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

East South Central 

Total 149,178 8.0 (7.6, 8.6) 4,271 (3,699, 4,843) 

Alabama 42,206 8.8 (7.7, 9.8) 4,096 (3,126, 5,067) 

Kentucky 35,404 8.1 (7.0 , 9.2) 4,077 (2,850, 5,303) 

Mississippi 23,622 7.5 (6.4, 8.7) 3,844 (2,795, 4,892) 

Tennessee 47,946 7.8 (6.9, 8.7) 4,788 (3,604, 5,952) 

West South Central 

Total 212,888 6.4 (7.6, 8.6) 4,017 (3,441, 4,592) 

Arkansas 27,484 8.4 (7.1, 9.6) 3,821 (2,748, 4,893) 

Louisiana 32,981 8.6 (7.5, 9.7) 3,271 (2,393, 4,149) 

Oklahoma 27,133 7.3 (6.2, 8.4) 3,456 (1,855, 5,058) 

Texas 125,290 8.2 (7.5, 8.8) 4,377 (3,521, 5,233) 

Mountain 

Total 65,373 5.0 (4.4, 5.5) 3,430 (2,685, 4,174) 

Arizona 19,835 56.7 (4.5, 6.9) 2,962 (1,546, 4,378) 

Colorado 10,657 45.7 (3.5, 5.6) 3,319 (1,694, 4,943) 

Idaho 5,356 4.4 (2.6 . 6.2) 6,798 (2,061, 11,535) 

New Mexico 6,128 4.1 (2.9, 5.3) 3,027 (1,437, 4,617) 

Montana 6,024 5.3 (3.4, 7.3) 4,295 (1,536, 7,055) 

Utah 8,184 4.8 (3.5, 6.2) 2,652 (813, 4,491) 

Nevada 7,174 5.5 (4.1, 7.0) 2,995 (1,426, 4,563) 

Wyoming 2,017 3.8 (2.2, 5.4) 3,011 (314, 5,708) 

Pacific 

Total 173,089 6.6 (6.0, 7.1) 3,557 (2,764, 4,350) 

Alaska 1,950 5.7 (3.7, 7.7) 5,253 (2,260, 8,426) 

California 127,335 7.0 (6.2, 7.7) 3,600 (2,565, 4,635) 

Hawaii 7,004 7.6 (5.8, 9.4) 5,164 (2,196, 8,133) 

Oregon 10,118 4.1 (3.1, 5.1) 3,569 (1,418, 5,720) 

Washington 26,681 6.0 (5.1, 7.0) 2,798 (1,878, 3,718) 

C-4 
Table C-3. Direct Medical Costs Associated with Chronic Lung Disease—Annual 

Medicare Payments in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

New England 

Total 173,635 12.6 (11.9, 13.4) 6,648 (5,703, 7,593) 

Connecticut 40,571 12.1 (10.7, 13.4) 6,682 (5,200, 8,164) 

Maine 20,917 12.1 (10.0, 14.1) 6,367 (4,357, 8,378) 

Massachusetts 75,950 13.4 (11.9, 14.8) 7,380 (5,521, 9,238) 

New Hampshire 16,796 12.3 (10.2, 14.3) 6,004 (4,317, 7,692) 

Rhode Island 10,761 11.9 (9.1, 14.7) 5,851 (3,363, 8,340) 

Vermont 8,640 12.1 (9.3, 14.9) 2,981 (1,545, 4,418) 

Middle Atlantic 

Total 467,332 12.0 (11.6, 12.5) 6,228 (5,588, 6,867) 

New Jersey 102,374 12.0 (11.0, 13.0) 7,300 (5,343, 9,258) 

New York 210,086 11.8 (11.0, 12.5) 5,447 (4,581, 6,314) 

Pennsylvania 154,872 12.5 (11.7, 13.3) 6,577 (5,755, 7,400) 

East North Central 

Total 581,380 12.3 (11.8, 12.8) 5,761 (5,252, 6,270) 

Indiana 86,337 12.7 (11.7, 13.7) 5,375 (4,147, 6,604) 

Illinois 133,561 11.1 (1.0, 12.2) 6,474 (4,922, 8,026) 

Michigan 152,208 14.2 (13.1, 15.2) 5,877 (5,000, 6,754) 

Ohio 147,656 12.9 (12.0, 13.7) 5,583 (4,823, 6,342) 

Wisconsin 61,618 9.8 (8.9, 10.8) 4,897 (4,034, 5,561) 

West North Central 

Total 240,049 11.0 (10.5, 11.6) 6,485 (5,286, 7,684) 

Iowa 47,337 11.8 (10.4, 13.2) 4,784 (3,670, 5,899) 

Kansas 36,878 12.0 (10.4, 13.6) 5,971 (4,244, 7,697) 

Minnesota 42,074 8.9 (7.8, 1.0) 5,779 (3,725, 7,834) 

Missouri 74,433 12.6 (11.5, 13.7) 8,086 (4,717, 11,455) 

Nebraska 18,689 9.0 (7.3, 11.0) 8,485 (4,672, 12,298) 

North Dakota 10,485 11.8 (9.1, 14.5) 5,355 (3,207, 7,503) 

South Dakota 10,154 9.9 (7.4, 12.4) 4,960 (3,018, 6,903) 

South Atlantic 

Total 680,253 13.0 (12.6, 13.4) 5,579 (5,205, 5,593) 

Delaware 9,172 10.4 (8.5, 12.4) 9,498 (5,608, 13,387) 

District of Columbia 4,191 7.6 (5.3, 9.9) 9,841 (3,268, 16,414) 

Florida 250,009 14.7 (14.0, 15.5) 5,382 (4,731, 6,033) 

Georgia 84,409 12.6 (11.5, 13.6) 5,356 (4,514, 6,198) 

Maryland 58,363 12.1 (10.9, 13.4) 7,561 (5,878, 9,244) 

North Carolina 106,788 12.5 (11.5, 13.5) 5,452 (4,666, 6,238) 

South Carolina 51,419 11.5 (10.3, 12.8) 4,649 (3,662, 5,637) 

Virginia 82,241 11.8 (10.8, 12.9) 5,151 (3,926, 6,376) 

West Virginia 33,660 14.1 (12.4, 15.9) 5,431 (4,140, 6,721) 

(continued) 

C-5 
Table C-3. Direct Medical Costs Associated with Chronic Lung Disease—Annual 

Medicare Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

East South Central 

Total 252,568 13.7 (13.0, 14.3) 4,974 (4,534, 5,415) 

Alabama 68,419 1.4 (13.0, 15.5) 5,244 (4,370, 6118) 

Kentucky 65,299 14.9 (13.4, 16.4) 4,863 (4,042, 5,685) 

Mississippi 38,944 12.4 (11.0, 13.9) 4,891 (3,699, 6,083) 

Tennessee 79,906 13.0 (11.8, 14.1) 4,874 (4,098, 5,651) 

West South Central 

Total 336,899 12.8 (12.3, 13.4) 6,317 (5,675, 6,959) 

Arkansas 42,442 12.9 (11.4, 14.4) 5,712 (4,427, 7,176) 

Louisiana 47,496 12.4 (11.1, 13.7) 6,710 (5,574, 7,845) 

Oklahoma 50,308 13.5 (12.0, 15.0) 5,841 (4,345, 7,337) 

Texas 196,653 12.8 (12.0, 13.6) 6,475 (5,531, 7,419) 

Mountain 

Total 167,846 12.7 (11.9, 13.5) 4,817 (4,238, 5,396) 

Arizona 45,171 12.9 (11.2, 14.6) 4,016 (2,839, 5,192) 

Colorado 36,154 15.5 (13.7, 17.3) 6,174 (4,850, 7,497) 

Idaho 14,205 11.7 (8.9, 14.4) 4,780 (2,566, 6,993) 

New Mexico 18,911 12.7 (10.6, 14.7) 3,878 (2,713, 5,043) 

Montana 13,984 12.4 (9.6, 15.2) 4,662 (2,913, 6,410) 

Utah 13,909 8.2 (6.5, 9.9) 3,423 (2,145, 4,701) 

Nevada 18,857 15.0 (12.3, 16.7) 5,802 (3,578, 8,027) 

Wyoming 6,655 12.5 (9.7, 15.3) 6,094 (3,473, 8,714) 

Pacific 

Total 308,164 11.7 (11.0, 12.3) 5,911 (4,942, 6,881) 

Alaska 4,550 13.4 (10.5, 16.3) 6,569 (3,716, 9,421) 

California 213,616 11.7 (10.8, 12.6) 6,447 (5,093, 7,802) 

Hawaii 8,847 9.6 (7.5, 11.6) 6,550 (3,141, 9,960) 

Oregon 26,258 10.7 (9.2, 12.3) 4,660 (3,497, 5,823) 

Washington 54,893 12.4 (11.1, 13.8) 4,266 (3,247, 5,285) 

C-6

Table C-4. Direct Medical Costs Associated with Ischemic Heart Disease—Annual 

Medicare Payments in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

New England 

Total 282,552 20.5 (19.6, 21.5) 6,303 (5,632, 6,973) 

Connecticut 73,319 21.8 (20.0, 23.6) 5,973 (4,954, 6,992) 

Maine 36,360 21.0 (18.5, 23.6 5,116 (3,880, 6,353) 

Massachusetts 119,789 21.1 (19.4, 22.7) 7,413 (6,100, 8,726) 

New Hampshire 24,898 18.2 (15.7, 20.6) 4,628 (3,305, 5,591) 

Rhode Island 16,759 18.5 (15.1, 21.9) 5,247 (2,989, 7,505) 

Vermont 11,427 16.0 (12.8, 19.2) 5,750 (3,077, 8,422) 

Middle Atlantic 

Total 885,001 22.8 (22.2, 23.4) 5,886 (5,400, 6,372) 

New Jersey 208,261 24.5 (23.1, 25.8) 6,426 (5,182, 7,670) 

New York 404,025 22.6 (21.6, 23.6) 5,691 (4,935, 6,446) 

Pennsylvania 272,715 22.0 (21.0, 23.0) 5,764 (5,184, 6,343) 

East North Central 

Total 977,693 20.6 (20.1, 21.2) 5,892 (5,508, 6,275) 

Indiana 133,417 2.0 (18.5, 20.9) 5,559 (4,904, 6,213) 

Illinois 224,414 18.6 (17.1, 20.1) 6,544 (5,285, 7,802) 

Michigan 285,749 26.6 (25.3, 27.9) 5,364 (4,766, 5,962) 

Ohio 233,021 20.3 (19.3, 21.3) 6,075 (5,511, 6,639) 

Wisconsin 101,092 16.1 (14.9, 17.3) 5,953 (5,169, 6,737) 

West North Central 

Total 381,285 17.5 (16.9, 18.2) 5,760 (5,304, 6,217) 

Iowa 65,222 16.3 (14.7, 17.8) 4,874 (3,996, 5,753) 

Kansas 61,420 20.0 (18.1, 22.0) 4,746 (3,871, 5,622) 

Minnesota 64,542 13.6 (12.3, 14.9) 6,070 (5,096, 7,043) 

Missouri 122,870 20.8 (19.4, 22.1) 6,283 (5,447, 7,119) 

Nebraska 33,317 16.1 (1.4, 1.8) 6,274 (4,573, 7,974) 

North Dakota 16,614 18.7 (15.4, 22.0) 6,651 (4,212, 9,091) 

South Dakota 17,300 16.8 (13.7, 20.0) 5,994 (1,906, 10,082) 

South Atlantic 

Total 1,066,047 20.4 (19.9, 20.9) 5,370 (5,093, 6,648) 

Delaware 21,009 23.9 (21.1, 26.7) 5,469 (4,090, 6,848) 

District of Columbia 6,811 12.4 (9.6, 15.2) 10,614 (3,861, 17,367) 

Florida 432,873 25.5 (24.6, 26.4) 4,750 (4,370, 5,131) 

Georgia 115,271 17.2 (16.0, 18.4) 5,960 (5,065, 6,854) 

Maryland 91,854 19.1 (17.6, 20.6) 6,882 (5,687, 8,077) 

North Carolina 146,238 17.1 (16.0, 18.2) 5,140 (4,500, 5,780) 

South Carolina 81,512 18.3 (16.8, 19.8) 5,936 (4,717, 7,154) 

Virginia 116,923 16.8 (15.6, 18.1) 5,257 (4,286, 6,227) 

West Virginia 53,556 22.5 (20.4, 24.6) 5,835 (4,805, 6,864) 

(continued) 

C-7 
Table C-4. Direct Medical Costs Associated with Ischemic Heart Disease—Annual 

Medicare Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

East South Central 

Total 346,972 18.8 (18.2, 19.5) 5,930 (5,342, 6,518) 

Alabama 87,164 18.1 (16.7, 19.5) 5,657 (4,853, 6,462) 

Kentucky 88,595 20.2 (18.6, 21.9) 5,993 (5,051, 6,935) 

Mississippi 55,910 17.9 (16.2, 19.6) 6,000 (4,914, 7,087) 

Tennessee 115,302 18.7 (17.4, 20.0) 6,054 (4,648, 7,460) 

West South Central 

Total 500,632 19.1 (18.4, 19.8) 5,879 (5,444 , 6,314) 

Arkansas 65,705 20.0 (18.2, 21.8) 5,182 (4,283, 6,081) 

Louisiana 75,143 19.6 (18.1, 21.2) 5,951 (5,069, 6,833) 

Oklahoma 73,744 19.7 (18.1, 21.4) 6,757 5,364, 8,151) 

Texas 286,040 18.6 (17.7, 19.5) 5,794 (5,198, 6,391) 

Mountain 

Total 210,157 15.9 (15.1, 16.8) 5,014 (4,459, 5,586) 

Arizona 66,016 18.9 (16.8, 20.9) 4,074 (3,118, 5,030) 

Colorado 34,250 14.7 (12.9, 16.5) 5,929 (4,566, 7,292) 

Idaho 19,561 16.1 (12.9, 19.2) 6,791 (4,049, 9,533) 

New Mexico 21,949 14.7 (12.5, 16.9) 5,062 (3,458, 6,666) 

Montana 16,351 14.5 (11.5, 17.5) 4,916 (3,122, 6,710) 

Utah 23,429 13.8 (11.7, 15.9) 4,119 (2,856, 5,383) 

Nevada 22,349 17.2 (14.8, 19.6) 5,408 (3,737, 7,079) 

Wyoming 6,252 11.7 (9.7, 14.5) 6,392 (3,588, 9,196) 

Pacific 

Total 429,332 16.3 (15.5, 17.0) 5,955 (5,263, 6,640) 

Alaska 4,355 12.8 (9.9, 15.7) 10,150 6,256, 14,043) 

California 317,040 17.4 (16.3, 18.4) 6,284 (5,384, 7,185) 

Hawaii 14,599 15.8 (13.3, 18.3) 5,069 (3,139, 6,999) 

Oregon 30,314 12.4 (10.8,14.0) 4,460 (3,262, 5,659) 

Washington 63,023 14.3 (12.8, 15.7) 4,911 (3,992, 5,829) 

C-8

Table C-5. Direct Medical Costs Associated with Lung Cancer—Annual Medicare 

Payments in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 


Region (State) Number Percent CI (±) 
 Mean CI (±) 

New England 

Total 16,862 1.2 (1.0, 1.4) 11,928 (6,172, 17,685) 

Connecticut 3,116 0.9 (0.5, 1.3) 14,866 (2,288, 27,445) 

Maine 2,424 1.4 (0.7, 2.1) 7,629 (2,366, 12,892) 

Massachusetts 8,212 1.4 (1.0, 1.9) 14,367 (3,563, 25,171) 

New Hampshire 1,142 0.8 (0.3, 1.4) 7,589 (–822, 16,001) 

Rhode Island 1,411 1.6 (0.5, 2.6) 6,836 (–2,159, 15,830) 

Vermont 557 0.8 (0.0, 1.5) 51 (–13, 115) 

Middle Atlantic 

Total 53,771 1.4 (1.2, 1.6) 11,950 (9,833, 14,067) 

New Jersey 10,976 1.3 (0.9, 1.6) 12,854 (8,754, 16,954) 

New York 28,147 1.6 (1.3, 1.9) 11,920 (8,860, 15,281) 

Pennsylvania 14,648 1.2 (0.9, 1.4) 11,330 (8,101, 14,560) 

East North Central 

Total 55,466 1.2 (1.0, 1.3) 8,431 (6,968, 9,893) 

Indiana 7,460 1.1 (0.8, 1.4) 8,552 (5,639, 11,466) 

Illinois 10,714 0.9 (0.6, 1.2) 7,188 (3,882, 10,494) 

Michigan 18,217 1.7 (1.3, 2.1) 9,181 (5,949, 12,413) 

Ohio 13,489 1.2 (0.9, 1.4) 7,852 (5,295, 10,410) 

Wisconsin 5,586 0.9 (0.6, 1.2) 9,603 (6,000, 13,205) 

West North Central 

Total 22,121 1.0 (0.8, 1.2) 9,076 (6,975, 11,177) 

Iowa 3,390 0.8 (0.5, 1.2) 9,481 (5,420, 13,543) 

Kansas 4,372 1.4 (0.8, 2.0) 10,908 (4,969, 16,847)] 

Minnesota 5,483 11.6 (0.8, 1.6) 8,587 (5,146, 12,028) 

Missouri 5,575 0.9 (0.6, 1.3) 8,561 (3,763, 13,359) 

Nebraska 1,742 0.8 (0.3, 1.4) 9,284 (–412, 18,980) 

North Dakota 807 0.9 (0.1, 1.7) 10,094 (–15,752, 35,939) 

South Dakota 752 0.7 (0.0, 1.4) 2,402 (–4,962, 9,765) 

South Atlantic 

Total 61,018 1.2 (1.0, 1.3) 11,552 (9,432, 13,671) 

Delaware 1,319 1.5 (0.7, 2.3) 9,030 (3,166, 14,894) 

District of Columbia 524 1.0 (0.1, 1.8) 8,287 (–5,511, 22,085) 

Florida 20,028 1.2 (1.0, 1.4) 10,145 (7,637, 12,653) 

Georgia 5,321 0.8 (0.5, 1.1) 7,350 (4,223, 10,477) 

Maryland 6,006 1.2 (0.8, 1.6) 14,596 (8,176, 21,016) 

North Carolina 11,084 1.3 (1.0, 1.6) 13,871 (9,656, 18,086) 

South Carolina 6,199 13.9 (0.9, 1.8) 11,061 (6,458, 15,664) 

Virginia 7,695 1.1 (0.8, 1.4) 10,012 (201, 19,823) 

West Virginia 2,841 1.2 (0.6, 1.7) 20,863 (–3,824, 45,550) 

(continued) 

C-9 
Table C-5. Direct Medical Costs Associated with Lung Cancer—Annual Medicare 

Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 


Region (State) Number Percent CI (±) 
 Mean CI (±) 

East South Central 

Total 23,270 1.3 (1.0, 1.5) 9,662 (7,446, 11,879) 

Alabama 6,982 1.4 (1.0, 1.9) 9,649 (5,304, 13,993) 

Kentucky 4,260 1.0 (0.6, 1.4) 8,928 (3,573, 14,284) 

Mississippi 5,013 1.6 (1.0, 2.2) 11,549 (5,677, 17,421) 

Tennessee 7,015 1.1 (0.8, 1.5) 8,773 (5,425, 12,121) 

West South Central 

Total 29,891 1.1 (1.0, 1.3) 14,719 (11,150, 18,289) 

Arkansas 2,838 0.9 (0.5, 1.3) 13,599 (6,611, 20,587) 

Louisiana 4,089 1.1 (0.7, 1.5) 13,295 (7,863, 18,727) 

Oklahoma 4,395 1.2 (0.7, 1.6) 14,258 (7,372, 21,145) 

Texas 18,569 1.2 (0.9, 1.5) 15,313 (9,938, 20,688) 

Mountain 

Total 11,858 0.9 (0.7, 1.1) 8,655 (5,685, 11,625) 

Arizona 3,550 1.0 (0.5, 1.6) 3,860 (777, 6,942) 

Colorado 1,142 0.5 (0.1, 0.9) 6,321 (–3,060, 15,701) 

Idaho 1,863 1.5 (0.5, 2.6) 14,291 (5,763, 22,818) 

New Mexico 992 0.7 (0.2, 1.2) 13,289 (–54, 26,633) 

Montana 645 0.6 (0.0, 1.2) 14,372 (–17,078, 45,821) 

Utah 951 0.6 (0.1, 1.0) 3,225 (–163, 6,613) 

Nevada 1,808 1.4 (0.6, 2.2) 11,900 (–2,033, 25,833) 

Wyoming 908 1.7 (0.6, 2.8) 8,873 (2,650, 15,097) 

Pacific 

Total 31,000 1.2 (0.9, 1.4) 10,985 (7,363, 14,607) 

Alaska 390 1.1 (0.2, 0.2) 16,169 (–494, 32,831) 

California 21,098 11.5 (0.9, 1.5) 11,712 6,504, 16,920) 

Hawaii 1,871 2.0 (1.0, 3.1) 11,613 (5,164, 18,062) 

Oregon 2,964 12.1 (0.7, 1.8) 10,368 (5,778, 14,957) 

Washington 4,677 1.1 (0.6, 1.5) 7,415 (3,610, 11,221) 

C-10 
Table C-6. Direct Medical Costs Associated with Gastrointestinal Illness—Annual 

Medicare Payments in 2000 by Region and State 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

New England 

Total 37,400 2.7 (2.3, 3.1) 1,341 (735, 1,947) 

Connecticut 7,866 2.3 (1.7, 3.0) 872 (385, 1,359) 

Maine 4,563 2.6 (1.6, 3.6) 1,300 (373, 2,227) 

Massachusetts 17,945 3.2 (2.4, 3.9) 1,776 (565,2,987) 

New Hampshire 3,125 2.3 (1.3, 3.3) 586 (12, 1,259) 

Rhode Island 2,646 2.9 (1.5, 4.4) 845 (–11, 1,700) 

Vermont 1,254 1.8 (0.6, 2.9) 1,134 (1,132, 3,401) 

Middle Atlantic 

Total 99,429 2.6 (2.5, 2.8) 1,144 (866, 1,422) 

New Jersey 22,230 2.6 (2.1, 3.1) 904 (538, 1,270) 

New York 50,104 2.8 (2.4, 3.2) 1,085 (681, 1,489) 

Pennsylvania 27,095 2.2 (1.8, 2.5) 1,449 (821, 2,077) 

East North Central 

Total 104,447 2.2 (2.0, 2.4) 1,193 (912, 1,474) 

Indiana 11,516 1.7 (1.3, 2.1) 1,376 (715, 2,038) 

Illinois 34,024 2.8 (2.2, 3.5) 1,396 (713, 2,079) 

Michigan 25,309 2.4 (1.9, 2.8) 663 (368, 957) 

Ohio 22,868 2.0 (1.6, 2.3) 1,511 (893, 2,129) 

Wisconsin 10,730 1.7 (1.3, 2.1) 924 (588, 1,260) 

West North Central 

Total 47,352 2.2 (2.0, 2.4) 1,042 (781, 1,303) 

Iowa 8,672 2.2 (1.5, 2.8) 834 (428, 1,238) 

Kansas 9,397 3.1 (2.2, 3.9) 862 (394, 1,330) 

Minnesota 6,038 1.3 (0.8, 1.7) 1,617 (525, 2,710) 

Missouri 14,474 2.4 (1.9, 3.0) 1,279 (681, 1,877) 

Nebraska 5,332 2.6 (1.6, 3.5) 5,332 (216, 1,025) 

North Dakota 1,936 2.2 (1.0, 3.4) 1,082 (277, 1,888) 

South Dakota 1,504 1.5 (0.5, 2.5) 210 (23, 396) 

South Atlantic 

Total 125,383 2.4 (2.2, 2.6) 1,102 (925, 1,278) 

Delaware 2,529 2.9 (1.8, 3.9) 776 (305, 1,248) 

District of Columbia 524 1.0 (0.1, 1.8) 91 (–4, 181) 

Florida 40,424 2.4 (2.0, 2.7) 896 (604, 1,187) 

Georgia 18,115 2.7 (2.2, 3.2) 1,502 (1,034, 1,971) 

Maryland 12,907 2.7 (2.1, 3.3) 1,092 (595, 1,590) 

North Carolina 19,257 2.3 (1.8, 2.7) 1,187 (754, 1,620) 

South Carolina 9,420 2.1 (1.5, 2.7) 1,106 (304, 1,908) 

Virginia 14,948 2.2 (1.7, 2.6) 927 (407, 1,447) 

West Virginia 7,261 3.0 (2.2, 3.9) 1,582 (517, 2,646) 

(continued) 

C-11 
Table C-6. Direct Medical Costs Associated with Gastrointestinal Illness—Annual 

Medicare Payments in 2000 by Region and State (continued) 

Direct Medical Costs 

Beneficiaries with a Diagnosis ($/Person/Year) 

Region (State) Number Percent CI (±) Mean CI (±) 

East South Central 

Total 50,148 2.7 (2.4, 3.0) 1,267 (756, 1,778) 

Alabama 10,006 2.1 (1.6, 2.6) 538 (263, 813) 

Kentucky 12,340 2.8 (2.1, 3.5) 2,126 (175, 4,078) 

Mississippi 8,936 2.9 (2.1, 3.6) 1,081 (655, 1,507) 

Tennessee 18,867 3.1 (2.5, 3.6) 1,180 (758, 1,603) 

West South Central 

Total 73,659 2.8 (2.5, 3.1) 1,384 (1,099, 1,669) 

Arkansas 12,024 3.7 (2.8, 4.5) 963 (456, 1,470) 

Louisiana 7,207 1.9 (1.4, 2.4) 1,531 (583, 2,480) 

Oklahoma 10,738 2.9 (2.2, 3.6) 1,464 (536, 2,392) 

Texas 43,689 2.8 (2.5, 3.2) 1,456 (1,082, 1,829) 

Mountain 

Total 29,821 2.3 (1.9, 2.6) 841 (536, 1,146) 

Arizona 8,874 2.5 (1.7, 3.3) 914 (249, 1,580) 

Colorado 5,029 2.2 (1.4, 2.9) 1,316 (369, 2,263) 

Idaho 2,096 1.7 (0.6, 2.8) 657 (–253, 1,566) 

New Mexico 2,594 1.7 (0.9, 2.5) 1,966 (118, 3815) 

Montana 3,657 3.2 (1.7, 4.8) 544 (86, 1,002) 

Utah 2,440 1.4 (0.7, 2.2) 210 (43, 378) 

Nevada 3,586 2.8 (1.7, 3.8) 177 (118, 236) 

Wyoming 1,613 3.0 (1.6, 4.5) 487 (–128, 1,102) 

Pacific 

Total 54,108 20.5 (1.8, 2.3) 1,154 (793, 1,515) 

Alaska 520 1.5 (0.5, 2.6) 1,336 (–1,132, 3,803) 

California 40,392 2.2 (1.8, 2.6) 1,265 (801, 1,728) 

Hawaii 2,257 2.4 (1.4, 3.5) 722 (31, 1,413) 

Oregon 3,595 1.5 (0.8, 2.1) 626 (46, 1,205) 

Washington 7,343 1.7 (1.2, 2.2) 924 (226, 1,622) 

C-12