This program is brought to you by Emory University. Hi, my name is Phaeda Corso. I'm the UGA Foundation Professor in Human Health at the College of Public Health at the University of Georgia. And today, I'm going to be talking about the cost of violence. Before I get into the full understanding of what are costs, I want to, at least put this into the context of the public health model for prevention. How do we think about economic analysis in the context of public health? So if you think about a model of prevention, we typically start off with identifying the problem, from there we do research, ideologic research on the risk and protective factors of violence, then we go in to program development. From program development, we go into program evaluation, and this includes both efficacy and effectiveness research. And then once we have evidence of efficacy and effectiveness, then we go into wide spread implementation and dissemination. So this is a theoretic model, and it's a feedback loop, and this is really how we like to set up, our public health model. So where does economic analysis play a role? Specifically where does cost of illness analysis play a role? So, if you look here under problem identification. Problem identification is thinking about what is the morbidity associated with violence, what is the mortality associated with violence, and in the same way, we can think about what are the costs of violence, so this is a very critical part of the public health model. So, what is economic impact or cost of illness analysis? This is a methodology that assesses the total cost of a disease or condition or an illness or an injury. And we're typically considering in this costing, the medical cost associated with the injury, and the non-medical cost associated with the injury. And then we also include productivity losses due to the injury. And we'll go through each one of these in turn. So first, let's talk about the medical and non-medical costs. The medical costs of an injury or an illness are, you can think about all those things for which a claim is a claim is based. So you can think about inpatient admissions. Emergency room visits, going to your physician's office getting prescription drugs, all of those fall under the category of medical costs. What are examples of non-medical costs? Those are other costs associated with the injury like those that occur in the legal system for investigating a crime travel ex, expenses to seek out treatment. Sometimes we include childcare for, for when a, an adult is seeking treatment, as well. So, let me just give you an example. So, this this is an example of costing out illness averted due to a vaccine. So, if we think about the direct medical costs associated with a vaccine, we think about medical costs averted and we can think about outpatient visits and fewer hospitalizations. So what pieces of information would you need to know to cost out an outpatient visit for example? What pieces of information do you need to know to cost out a hospitalization? So in this example, let's say we're talking about averting a case of Influenza due to vaccine to cost out the outpatient visits, we would need to know the what is the Influenza rate. We'd need to know the number of health care provider visits per Influenza episode. We'd need to know some information on how effective the vaccine is, and we then would then also need to pair that information with the cost of the visit to a healthcare provider. Likewise, with the cost for hospitalization, we would need to know what is the hospitalization rate associated with Influenza. How effective is the vaccine again, and what is the caught, the cause for acute respiratory conditions the hospitalization costs. So now let's move to productivity losses. So this is medical costs, non-medical costs, and now we care about productivity losses. So how do we define productivity losses? In the US, we use what's called the Human Capital Approach. And this was really developed in the ear, the late 50s, the early 60s. Dorothy Rice is, is the, is the famous professor who's brought this methodology to the US and it's basically applying a human capital theory to health. So we quantified the economic benefits of a person based on their education, which translates into their income. So this is how we come up with the cost of illness on the productivity loss side. In, outside of the US we have other ways of measuring productivity loses including the Friction cost method and Revealed preference, and I'll go into those a little bit. In one moment. But let's first focus on the Human Capital Approach. Since this is what we're using here in the US. So the Human Capital Approach is based on the Theory of investment and that is that the human being is, is valued based on your capital investment. So you can think about your value in society based on how productive you are. And how do we measure your productivity to society? It's based on your earnings. Not just your earnings in the workplace, but also your productivity within the household as well. So what we do in this approach, is we place a monetary value on your healthy time or if you think about averting an illness, we place a value on that time lost from work, for example, or time lost from leisure time. So the value of the program is measured. When you're thinking about mortality, worth is measured as the present value of future earnings. So, for example, if a person dies prematurely. Let's say a person dies in their 20s from an act of violence. Then the way that we would value that person's future productivity stream is based on their future earnings. This approach has been used in the United States for many years, as I said. So it's based, again, on workers' productivity, which is equal to earnings as a proxy measure. but, you know, one might say, well, maybe that's not quite fair, because my earnings do not reflect how productive I am in the community, because I have a family that I care for or I do community service. And so, there are some mechanisms that one can do to make adjustments to earnings to reflect those other contributions to society. So, thinking about how we value a death, we categorize the work loss by age, sex and occupation, because there is a gender differential in earnings, so that's why we care about gender. There's also a wage differential based on your age. So, you can think about your highest productivity years being between the ages of 40 and 50, and there's also a wage differential based on your occupation. That is if you have a a white collar job, you might get paid differently than a blue collar job, as an example. Because we're talking about future earnings streams, we have to discount those future earnings. So it's based on some discount rate. We use gross earnings before taxes, and we include fringe benefits, because although you don't have fringe benefits showing up in your paycheck, they are still part of your wage package. And then we also impute values for non-labor productivity, as I mentioned before, including household productivity and then perhaps some community service that you are engaged in. On occasion, we do subtract out consumption. If you think about your, your earnings or your wages as a measure of your productivity,. You can also think about your consumption of goods in the marketplace as what you're taking away from the productivity potential of society. So we do see in some cases that people do subtract out for consumption, but that's not always the case. Now, valuing morbidity is a little bit more challenging. In this case what we do is we look at the number of days that you would lose from work, let's say from from a violent episode. Let's say you lose two weeks from work because you have a broken arm or a broken leg and you need to recoup at home you can't do your household your household productivity as you usually could. But the problem with valuing morbidity is sometimes you have illnesses that changed your level of productivity. So, if you can think about a woman who is being stalked by by a significant other. She may not be able to do the same job because the job that she's in she, the significant other has access to her. So, she may have to go to her employer and say, I need to have a different location or a different different security around my job, so that this person cannot get in touch with me. And so because the occupation itself changes, that means the impact on morbidity is a little bit different. So so it's a little bit more challenging to value morbidity in this way, but it's certainly the approach that we're taking in the United States. Now there are obviously major limitations. I'm sure many of you are sitting there thinking, I know I'm worth more than what I get paid, especially if you're a student. Especially if you're a professor in a public university. So what are those limitations? One of them is it discriminates against low wage earners. Discriminates against gender because of the differentials. It discriminates against age. It also assumes that there is a perfect labor market, where earnings are valid, val, evaluation of productivity. But we know that's not necessarily true when we have high unemployment, People who have high education levels end up getting low-wage jobs because those are the only jobs available. But the good news here is, even though we know that there's some problems here with the human capital approach, most everyone who is assessing the cost of illness and injury in the United States are using this methodology, and so at least we can compare apples to apples when we're thinking about the economic burden of violence relative to other outcomes like obesity, for example. Now I did mention that outside the United States there are some other methods for evaluating productivity. One method is called the Friction cost method. And this method is where we value your time, or your productivity potential, based on how easy or difficult it is to replace you. So if you think about someone who's working in a factory and they're working on the line and their job is critical because if that person is not on the line then everything else gets messed up along the line. Then we would value that person's time based on how much I would have to pay a person overtime to come in and take that place. So resource costs are associated with recruiting and training replacement workers, and then there's some transitory changes in productivity as well. So, for example, if I'm if I'm teaching a class during the semester and I am no longer able to teach that class, how long does it take before they can get a professor to replace me. We think about that as a re, as a replacement cost, how much do they have to pay someone to come in and replace me. How much education is lost because you missed a couple of weeks of education. That, that kind of thing. So the pros of the, of the Friction Cost approach are that if unemployment exists there's always a pool of labor to draw from. now, this is a big problem if there's 0% unemployment. So if you think again about the person on the factory line, if there's 0% unemployment and there is no one that they can find to replace that factory worker then the friction cost become very high. So the value of productivity loss using the friction cost approach is typically less than, than the human capital approach because it's not always or ever typical the case that we have 0% unemployment. Some of the cons of the friction cost approach is again, thinking about, we don't value leisure time using this approach. How do we value a clinician's time if you're caring for the sick, because that is their productivity potential. So let's go back to our original example which is, how do we assess the costs of illness associated with averting Influenza due to vaccine. So in this case, we have productivity losses averted, if you think about the times that you've ever had the flu you might be home for a week if you're a parent. If you're a parent of a sick child, the sick child might lose, miss school for a week. You might miss work for a week. So you have to take into all those productivity hits. So we want to look at, what are the work loss prevented? What are the. What's the value of lower rates of work effectiveness? So we call this presenteeism. How many of you have gone to work? Are gone to school when you were sick, and maybe your productivity po, potential is not as high as it normally is. And then should there be a death associated with the Influenza, how do we value the future earning stream? So in this particular example, here's the data that you would need to calculate productivity losses. You need to know again, the Influenza rate. You'd need to know the number of work days that one typically loses for an for an influenza illness, the vaccine effectiveness, one's hourly wage, including fringe. And then for reduced work effectiveness, we would need to know what kind of reduction in your work effectiveness do you have. We have an interesting study that I conducted in the. In the violence world. Where we where we asked a sample of men in a workplace. This was a government workplace. We had them do a survey where it was their abusiveness potential scale. So we had them fill out this abusiveness potential scale. And then simultaneously we asked them to report out. Their, number of days they miss from work and also their presenteeism. And we found a very strong correlation between potential for abusiveness and the number of work days missed and, presenteeism. So this is one way we can get at productivity losses for violence as an example.
