ACTING POSITIVELY: STRATEGIC IMPLICATIONS OF THE ECONOMIC COSTS OF MULTIPLE SCLEROSIS IN AUSTRALIA REPORT BY ACCESS ECONOMICS PTY LIMITED FOR MULTIPLE SCLEROSIS AUSTRALIA WINTER 2005 Acting positively: strategic implications of the economic costs of MS in Australia TABLE OF CONTENTS Acknowledgements and disclaimer i Glossary of common abbreviations ii EXECUTIVE SUMMARY iii 1. Prevalence and socioeconomic impacts 9 1.1 Epidemiology and aetiology....................................................................................................9 1.1.1 What is MS? ...................................................................................................................9 1.1.2 Aetiology.......................................................................................................................10 1.1.3 Mortality and co-morbidity............................................................................................12 1.2 Treatment and management ................................................................................................14 1.2.1 Prevention and early intervention.................................................................................14 1.2.2 Pharmacological management.....................................................................................15 1.2.3 Psychosocial and other health interventions................................................................15 1.2.4 Other and alternative interventions ..............................................................................16 1.3 Prevalence ............................................................................................................................17 1.3.1 Prevalence rates ..........................................................................................................17 1.3.2 Prevalence estimates and projections .........................................................................22 1.4 Health and socioeconomic impacts ......................................................................................25 1.4.1 Disability.......................................................................................................................25 1.4.2 Socioeconomic status and rurality ...............................................................................27 1.4.3 Employment .................................................................................................................29 1.4.4 Use of medical, welfare and other services .................................................................34 2. The cost burden of MS in Australia 36 2.1 Direct health system costs....................................................................................................36 2.1.1 Methodological basis....................................................................................................36 2.1.2 Health costs in 2005.....................................................................................................38 2.1.3 Projections of direct costs ............................................................................................42 2.1.4 Comparison with bottom-up data .................................................................................43 2.2 Indirect financial costs...........................................................................................................45 2.2.1 Lower workforce participation for people with MS .......................................................46 2.2.2 Family and carer costs .................................................................................................49 2.2.3 Cost of welfare payments.............................................................................................52 2.2.4 Modifications and aids..................................................................................................55 2.2.5 Summary of financial costs ..........................................................................................56 2.3 The ‘burden of disease’.........................................................................................................58 2.3.1 Valuing life and health..................................................................................................58 2.3.2 DALYs and QALYs.......................................................................................................59 2.3.3 Discount rates ..............................................................................................................61 2.3.4 Estimating the burden of disease from MS in 2005 .....................................................62 2.3.5 Valuing the burden of disease......................................................................................65 3. Comparisons, constraints and challenges 68 3.1 Comparisons with other diseases.........................................................................................68 3.1.1 Prevalence ...................................................................................................................68 3.1.2 Health system expenditure comparisons .....................................................................69 Acting positively: strategic implications of the economic costs of MS in Australia 3.1.3 Burden of disease.........................................................................................................69 3.2 Constraints and challenges...................................................................................................71 3.2.1 Employment support.....................................................................................................71 3.2.2 Early intervention..........................................................................................................74 3.2.3 Pharmaceuticals ...........................................................................................................76 3.2.4 Residential and community care ..................................................................................77 3.2.5 Support for informal carers and respite........................................................................80 3.2.6 Research ......................................................................................................................81 3.2.7 Collaborative partnerships............................................................................................83 3.2.8 Service capacity of MS Australia..................................................................................84 3.2.9 Disadvantaged groups .................................................................................................86 3.2.10 Financing issues...........................................................................................................86 3.3 Conclusions and recommendations......................................................................................87 REFERENCES 91 TABLE OF TABLES Table 1-1: MS mortality rates, Queensland 1981 (per 100,000) 13 Table 1-2: MS prevalence rates from selected Australian studies 18 Table 1-3: Age-specific prevalence rates, 1996 20 Table 1-4: Geographic variations in MS prevalence, Australia, index relative to Newcastle 20 Table 1-5: Prevalence rates for costing purposes 21 Table 1-6: MS prevalence by age and gender, Australia, 2005, 2010, 2020 22 Table 1-7 MS disability score and disease progression 26 Table 1-9: Cost categories in the AMSLS EIS and preliminary estimates 34 Table 2-1: Health cost inflation, % per annum, Australia, 1992-93 to 2002-03 38 Table 2-2: Allocated health costs, MS, by cost type, age and gender, 2005 ($m) 39 Table 2-3: People with MS in nursing homes, number and % total, 2005 41 Table 2-4: Lost earnings and taxation revenue due to MS, 2005, Australia 48 Table 2-5: Replacement valuation of informal care, unit cost components 51 Table 2-6: Cost of informal care by Australians with MS, 2005 51 Table 2-7: Average and maximum payment for selected income support payments 54 Table 2-8: Cost of welfare payments to people with MS, Australia 2005 55 Table 2-9: Cost of modifications and aids for Australians with MS, 2005 56 Table 2-10: MS, Financial cost summary, 2005, $m 57 Table 2-11: International estimates of VSL, various years 61 Table 2-12: MS disease burden by age, gender and YLD/YLL, Australia, 2005 65 Table 2-13: Gross cost of disability and premature death scenarios, MS, 2005, ($m) 66 Table 2-14: Net cost of disability and premature death, MS, $m, 2005 67 Table 3-1: Comparison of allocated health spending, 2000-01, $m 69 Acting positively: strategic implications of the economic costs of MS in Australia TABLE OF FIGURES Figure 1-1: Worldwide prevalence of MS 17 Figure 1-2: MS prevalence rates, Australia, 1961 – 2002 19 Figure 1-3: Comparison of age-specific prevalence rates, females 21 Figure 1-4: Comparison of age-specific prevalence rates, males 22 Figure 1-5: MS prevalence by age and gender, 2005 23 Figure 1-6: MS prevalence, % change by age group, 2005 to 2020 24 Figure 1-7: Growth in MS prevalence relative to population, 2005-2020 24 Figure 1-8: Mild, moderate and severe disability from MS (% of total), 2005 27 Figure 1-9: MS prevalence by rurality (% of total), 2005 28 Figure 1-10: Remoteness across Australia 29 Figure 1-11: MS employment rates relative to Australian averages, 2003 30 Figure 1-12: MS full-time and part-time employment rates relative to Australian averages, 2003 30 Figure 2-1: Allocated health costs, MS, by age and gender, 2005 ($m) 38 Figure 2-2: Allocated health