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Economic Costs of Birth Defects and Cerebral Palsy -- United States, 1992

Birth defects are the leading cause of infant mortality in the United States and the fifth leading cause of years of potential life lost (1,2). Despite the substantial allocation of medical and nonmedical resources to the care and support of persons with birth defects, the economic costs of such defects have not been estimated accurately. Because estimates of the cost per new case of a birth defect represent the savings from preventing a case, an incidence-based approach enables assessment of the value of prevention strategies. This approach was used to estimate the cost of illness for cerebral palsy and for 17 of the most clinically important structural birth defects in the United States. This report uses data from California (adjusted to provide national estimates) and national data (Table_1) to estimate the costs of these 18 conditions occurring in the United States during 1992.

Using a human capital approach, * estimates were made of the direct costs of medical, developmental, ** and special education services and the indirect costs of lost work and household productivity attributable to premature morbidity and mortality of the cohort of persons born in California during 1988 *** with any of the 18 conditions (6,7). Estimates were adjusted to reflect national costs in 1992 dollars and to avoid duplication when a child had more than one condition. Estimated costs of medical and other services used by children without these conditions were subtracted to yield the cost of each condition. The cost of associated conditions (e.g., cardiac anomalies with Down syndrome) were included because prevention of defects was presumed to prevent such conditions.

The number of new cases of the conditions were estimated using data from the California Birth Defects Monitoring Program (CBDMP). Prevalence estimates were derived from CBDMP and from a combined sample of CDC's National Health Interview Surveys for 1985-1989 (8). For each condition, estimates of excess mortality through the first year of life were based on a CBDMP study linking birth and death records. Estimates of age-specific direct costs of the conditions were based on reported charges and expenditures for children with the conditions. For several conditions, limitations in the data restricted the incorporation of certain costs and the period of time during which costs could be assessed. For example, the long-term excess costs of education for persons with certain conditions was not available.

For 1992, the combined estimated cost of the 18 conditions in the United States was $8 billion (Table_2). Costs ranged from $75,000 to $503,000 per new case. Conditions with the highest costs per case were characterized by relatively high levels of long-term activity limitations (e.g., cerebral palsy {$503,000}, Down syndrome {$451,000}, and spina bifida {$294,000}). In addition, these conditions had among the highest total lifetime costs ($2.4 billion, $1.8 billion, and $489 million, respectively), reflecting their relatively high incidences.

The high cost per new case of major heart defects reflects the high medical costs associated with early surgical interventions for these defects and high costs of lost productivity attributable to deaths during the first year of life.

Reported by: NJ Waitzman, PhD, Univ of Utah, Salt Lake City. PS Romano, MD, Univ of California, Davis; RM Scheffler, PhD, Univ of California, Berkeley; JA Harris, MD, California Birth Defects Monitoring Program, California Dept of Health Svcs. Div of Birth Defects and Developmental Disabilities, National Center for Environmental Health, CDC.

Editorial Note

Editorial Note: The findings in this report indicate that cerebral palsy and 17 of the most clinically important birth defects in the United States cause substantial economic burden. If all of the approximately 120,000 infants (3% of all live births) born each year in the United States with serious birth defects had been included in this analysis, the economic costs would have been higher. These cost estimates provide a basis for assessing prevention strategies using cost-benefit and cost-effectiveness analyses.

Because the medical and nonmedical services provided to persons with the 18 conditions often continue into adulthood, the cost estimates for these conditions were particularly sensitive to the choice of discount rate (6). In this analysis, a discount rate of 5% was used to compute the present value of money to be spent or received in the future.

The findings in this report are subject to at least four limitations. First, California data used to estimate incidence rates and treatment costs may not be representative of the United States; therefore, total costs per case may vary by state. Second, the contribution of time by family members to the provision of care was not estimated and may be substantial for some conditions. Third, the psychosocial costs of illness -- which may exceed traditional human capital costs -- also were not included (10). For these and other reasons, the use of the human capital approach underestimates what the public is willing to pay to prevent these conditions (9). Finally, excess medical and education costs probably were underestimated for some conditions because they could not be ascertained completely.

Prevention of birth defects can substantially reduce their economic burden. In 1992, the Public Health Service recommended that all women capable of becoming pregnant consume 0.4 mg of folic acid (a B vitamin) to reduce their risk for a pregnancy affected by spina bifida or anencephaly (11). Based on the estimates in this report, if this recommendation were fully implemented, a substantial proportion of the $489 million in total costs associated with spina bifida could be averted. The high personal and societal costs of birth defects underscore the need to develop and implement effective primary-prevention programs.

References

  1. CDC. Years of potential life lost before ages 65 and 85 -- United States, 1987 and 1988. MMWR 1990;39:20-2.

  2. CDC. Infant mortality -- United States, 1989. MMWR 1992;41:81-5.

  3. SRI International. The National Longitudinal Transition Study of Special Education Students: data documentation. Prepared by Kathryn

    1. Valdes for the Office of Special Education Programs, US Department of Education, under contract 300-87-0054, 1990.

  4. Bureau of the Census, US Department of Commerce. Survey of income and program participation (SIPP), 1987 panel (Wave VI Rectangular Core and Topical Module File) {Computer file}. Washington, DC: US Department of Commerce, Bureau of the Census (producer), 1990. Ann Arbor, Michigan: Inter-University Consortium for Political and Social Research (distributor), 1991.

  5. Rice DP, Max W. The cost of smoking in California, 1989. Sacramento, California: California State Department of Health Services, 1992.

  6. Waitzman NJ, Romano PS, Scheffler RM. Estimates of the economic costs of birth defects. Inquiry 1994;31:188-205.

  7. Waitzman NJ, Scheffler RM, Romano PS. The economic costs of birth defects, 1996. Lanham, Maryland: University Press of America (in press).

  8. NCHS. Public-use data tape documentation, part I, National Health Interview Survey, 1988 {Machine-readable data file and documentation}. Hyattsville, Maryland: US Department of Health and Human Services, Public Health Service, CDC, 1989 (producer). National Technical Information Service, U.S. Department of Commerce, Springfield, Virginia (distributor), 1989.

  9. Haddix A, Teutsch S, Shaffer P, Dunet D, Churchill E. A practical guide to prevention effectiveness: decision and economic analysis. Atlanta, Georgia: US Department of Health and Human Services, Public Health Service, CDC, 1994.

  10. Hu T, Sandifer FH. Synthesis of cost of illness methodology. Washington, DC: Georgetown University, Public Services Laboratory, 1981; National Center for Health Services Research contract no. 233-79-3010.

  11. CDC. Recommendations for the use of folic acid to reduce the number of cases of spina bifida and other neural tube defects. MMWR 1992;41(no. RR-14).

* A method for estimating the economic cost of disease that includes the resources used for medical care and the productivity losses resulting from morbidity and premature mortality. Intangible costs (e.g., "pain and suffering") are excluded from estimates using this approach.

** Nonmedical services provided to children outside the educational system. Services were grouped into four categories: out-of-home services (e.g., community-care centers), day programs, camps (including day residential and respite care), and other services (e.g., training for independent living, driver training, and interpreters). *** The most recent year for which data were available.




Table_1
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TABLE 1. Data sources used to estimate the costs of cerebral palsy and 17 of the most clinically important structural birth
defects, by cost category -- United States
=================================================================================================================================
Cost category                  Data source                Data description/adjustment
---------------------------------------------------------------------------------------------------------------------------------
Direct costs
 Medical services              Medical tape-to-tape       Estimates of inpatient and outpatient medical costs were based on
                               claims file (MTTCF),       abstracts of all discharges from California nonfederal, acute-
                               1988                       care hospitals in 1988 and on claims for all MediCal
                                                          (California's Medicaid program) beneficiaries in fiscal year 1988
                               Office of Statewide        (i.e., July 1988-June 1989). Because charges do not reflect
                               Health Planning and        actual costs, charges were adjusted using Medicare cost-to-charge
                               Development (OSHPD)        ratios.
                               hospital discharge
                               abstract, 1988

  Inpatient                    MTTCF, 1988                Inpatient charges from OSHPD were adjusted to cost based on the
                                                          Medicare cost-to-charge ratio for California hospitals.
                               OSHPD hospital discharge
                               abstract, 1988

  Outpatient/                  MTTCF, 1988                Because Medicare charges more accurately reflect actual costs,
  Physician services                                      MediCal costs were adjusted to approximate Medicare charges.

  Long-term care               MTTCF, 1988                Costs estimates were based on data from the MediCal claims file
                                                          and a file from the California Department of Developmental
                                                          Services.

 Developmental services        California Department      Cost estimates were based on nonmedical services provided to
                               of Developmental Services  children outside the educational system. Services were grouped
                               master file, 1988-1989    into four categories: out-of-home services (e.g., community-care
                                                          services), day programs, camps (including day residential and
                                                          respite care), and other services (e.g., training for independent
                                                          living, driver training, and interpreters).

 Special education             California Special         School-district-level special education enrollment and
  services                     Education Enrollment       expenditure data provided by the California Department
                               data, 1988-1989           of Education were analyzed to provide estimates that considered
                               California Special         differences in costs resulting from both federal handicap
                               Education Expenditure      categories and school-placement settings. Data about the
                               data, 1989                 distribution of persons with conditions among special education
                                                          handicap and placement categories were based on a nationally
                                                          representative survey of special education students (3).

                               National Longitudinal
                               Study of Special
                               Education Students, 1985

Indirect costs
 Productivity losses           Survey of Income and       Work-limitation estimates were obtained from CDC's National
                               Program Participation,     Health Interview Survey, and reduction of earnings resulting from
                               (SIPP) wave 2, 1987        limitations were based on the 1987 SIPP (4). Average California
                                                          earnings and household-production estimates by age and sex were
                                                          used to calculate lost productivity resulting from such
                                                          limitations (5) and were adjusted based on the average employee
                                                          compensation index in California relative to the United States
                                                          (1991 Statistical Abstract of the United States).

 Care-giver costs              Not included
=================================================================================================================================

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Table_2
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TABLE 2. Incidence rate and estimated economic costs * of cerebral palsy and 17 of the most clinically
important birth defects, by condition and type of cost -- United States, 1992
========================================================================================================
                                       Direct costs
                                -----------------------  Indirect                  Cost per
                    Incidence    Medical @  Nonmedical &  costs **  Total costs ++ new case
Condition             rate +    (millions)  (millions)  (millions)   (millions)   (thousands)
--------------------------------------------------------------------------------------------------------
Nervous system
 Cerebral palsy @@    12.3      $  852        $445      $1,129       $2,426         $503
 Spina bifida          4.2      $  205        $ 43      $  241       $  489         $294

Cardiovascular
 Truncus arteriosus    1.1      $  108        $< 1      $  101       $  210         $505
 Single ventricle      1.3      $   62        $< 1      $  110       $  173         $344
 Transposition/
  Double outlet
  right ventricle      4.9      $  166        $  4      $  344       $  515         $267
 Tetralogy of fallot   3.5      $  185        $  4      $  171       $  360         $262

Alimentary tract
 Tracheo-esophageal
  fistula&&            2.9      $   62         --      $  103       $  165         $145
 Colorectal atresia    4.5      $   57         --      $  162       $  219         $123
 Cleft lip or palate  17.7      $   97        $ 20     $  599       $  697         $101
 Atresia/stenosis
 of small intestine && 3.8      $   63         --      $   47       $  110         $ 75

Genitourinary
 Renal agenesis        4.3      $   25         --      $  399       $  424         $250
 Urinary
  obstruction&&       10.4      $   46         --      $  297       $  343         $ 84

Musculoskeletal
 Lower-limb
  reduction            2.2      $   17        $ 12      $  139       $  167         $199
 Upper-limb
  reduction            4.4      $   11        $ 24      $  135       $  170         $ 99


Abdominal wall
 Omphalocele &&        1.9      $   28         --      $  104       $  132         $176
 Gastroschisis &&      2.6      $   55         --      $   54       $  109         $108

Chromosomal
 abnormality
 Down syndrome        10.5      $  279        $389      $1,180       $1,848         $451

Other
 Diaphragmatic
  hernia &&            3.7      $   63         --      $  302       $  364         $250

Total &&              83.8      $2,104        $887      $5,039       $8,031         $244
--------------------------------------------------------------------------------------------------------
*  Costs (in 1992 dollars) are based on lifetime estimates for the 1988 birth cohort in California
   adjusted for differences in births and costs between California and the nation and for cost inflation
   between 1988-1992. Future costs are discounted at 5% (9).
+  Per 10,000 live births.
@  Medical costs were estimated through the second year of life only for persons born with
   tracheo-esophageal fistula, atresia/stenosis of small intestine, urinary obstruction, gastroschisis,
   omphalocele, or diaphragmatic hernia and through age 17 years for those born with colorectal atresia.
   For all other conditions, medical costs were estimated through age 65 years.
&  Includes developmental services costs for persons born with cleft lip or palate, spina bifida, Down
   syndrome, and cerebral palsy, and special education costs for persons born with these conditions as
   well as for those born with upper- or lower-limb reduction and heart anomalies.
** Includes indirect costs of illness for persons born with cleft lip or palate, spina bifida, Down
   syndrome, cerebral palsy, upper- or lower-limb reductions, and heart anomalies, and indirect costs
   resulting from first-year mortality for persons born with any of the conditions except spina bifida,
   cerebral palsy, and Down syndrome. For the latter three conditions, indirect costs attributable to
   excess mortality were estimated through ages 9, 17, and 65 years, respectively.
++ Row totals may not equal row sums because of rounding.
@@ Estimates of incidence were based on the proportion of 3-year-olds with cerebral palsy.
&& Column totals are less than column sums because total cost estimates reflect a downward adjustment to
   avoid duplication when a child had more than one condition.
========================================================================================================

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