No. 1, January 2005
Direct and Indirect Costs of Asthma in School-age Children
Li Yan Wang, MBA, MA, Yuna Zhong, MD, MSPH, Lani Wheeler, MD
Suggested citation for this article: Wang LY, Zhong Y, Wheeler L. Direct and indirect costs of asthma
in school-age children. Prev Chronic Dis [serial online] 2005 Jan [date
cited]. Available from: URL:
Asthma is one of the most common chronic diseases of childhood and is the
most common cause of school absenteeism due to chronic conditions. The objective
of this study is to estimate direct and indirect costs of asthma in school-age
Using data from the 1996 Medical Expenditure Panel Survey, we estimated
direct medical costs and school absence days among school-age children who had
treatment for asthma during 1996. We estimated indirect costs as costs of lost
productivity arising from parents’ loss of time from work and lifetime earnings
lost due to premature death of children from asthma. All costs were calculated
in 2003 dollars.
In 1996, an estimated 2.52 million children aged five to 17 years received
treatment for asthma. Direct medical expenditure was $1009.8 million ($401
per child with asthma), including payments for
prescribed medicine, hospital inpatient stay, hospital outpatient care,
emergency room visits, and office-based visits. Children with treated asthma had
a total of 14.5 million school absence days; asthma accounts for 6.3 million
school absence days (2.48 days per child with asthma). Parents’ loss of
productivity from asthma-related school absence days was $719.1 million
($285 per child with asthma). A total of 211 school-age children died of asthma
during 1996, accounting for $264.7 million lifetime earnings lost ($105 per
child with asthma). Total economic impact of asthma in school-age children was
$1993.6 million ($791 per child with asthma).
The economic impact of asthma on school-age children, families, and society
is immense, and more public health efforts to better control asthma in children
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One of the most common chronic disorders in children and adolescents (1),
asthma represents a major public health problem of increasing concern in
the United States. Between 1980 and 1996, the prevalence of asthma increased by
an average of 4.3% per year, from 3.6% to 6.2% among children aged from birth to
seven years (2). Since then, asthma prevalence appears to be stable, and in 2001,
more than 5 million children aged five to 17 in the United States were reported
to have a current diagnosis of asthma (3). Previously published reports (4-8)
strongly suggest that asthma not only increases health care use and
costs but also places a large burden on affected children and their families.
Children with asthma miss out on school, sports, and other childhood activities.
Parents or caregivers of children with asthma are affected by missed
workdays and decreased job productivity.
In 1992, Weiss et al (4) conducted a study of the asthma-related costs in the
U.S. population. They derived estimates of direct medical costs and indirect
costs of productivity loss (in 1985 dollars) using data from national surveys,
including the National Health Interview Survey (NHIS), the National Hospital
Discharge Survey, the National Ambulatory Medical Care Survey, and others.
Direct medical expenditures were estimated to be $465 million for children with
asthma aged from birth to 17 years, and indirect costs (value of parents’ or
caregivers’ productivity loss associated with school absence days [SADs]) were
estimated to be $726 million among school-age children. Because none of the
national surveys collects diagnostic and expenditure data, only national
expenditure estimates were produced. Although such estimates enable policymakers
to understand the economic impact of childhood asthma in the United States, it
is necessary to assess the per capita costs for children with asthma to
determine the savings or benefits of a successful asthma intervention.
Using the 1987 Medical Expenditure Panel Survey (MEPS), a later study
conducted by Lozano et al (6) estimated the per capita health care costs for
children with asthma aged one to 17 years, including both asthma-related
expenditures only and all care expenditures (both asthma and nonasthma care). For
children with asthma aged one to 17 years, the mean asthma-related per capita
expenditures totaled $171 per year; the mean all-care per capita expenditures
totaled $1129 ($468 for children without asthma). However, those annual cost
estimates were based on parent-reported prevalence. Although 8.8% of the study
sample was classified as children with asthma (had asthma or wheezing during the
past 12 months), 56% reported taking no asthma medication, and 12.3% reported no
health care use. To determine the reduction in health costs that would
result from an asthma intervention, cost estimates based on treated prevalence
or attack prevalence are more appropriate than those using proxy-reported
Beginning in 1997, the asthma questions on the NHIS changed the measure of
asthma prevalence (2). Now, three measures are used, all restricted to persons
with a medical diagnosis of asthma. The first measure is referred to as lifetime
asthma prevalence, which includes respondents with a medical diagnosis of
asthma at any time in their lives. The second measure identifies persons with a
current diagnosis of asthma. The third is a measure of 12-month attack
prevalence, which includes the number of persons who had one or more attacks or
episodes during the past 12 months.
The objective of this study is to estimate direct and indirect costs of
asthma among school-age children using data from the 1996 MEPS. This study is
different from previous reports in four aspects: 1) it produces both national
estimates and per capita estimates; 2) the 1996 MEPS data are used to derive not
only medical cost estimates but also SAD estimates; 3) both medical costs and
SADs are estimated based on treated prevalence; and 4) the costs of productivity
loss due to premature death among school-age children are estimated. We hope
that the results of this study can provide more insights into the economic
burden of childhood asthma on society, the individual child, and the family.
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A societal perspective was used to estimate costs of asthma among
school-age children. The direct costs of asthma were estimated as
asthma-related medical costs. Indirect costs were estimated as costs of lost
productivity, including parents’ loss of productivity due to asthma-related SADs
and loss of productivity due to premature death of children from asthma. Data
from the 1996 MEPS were used to derive medical cost and SAD estimates. Published
estimates were used for value of lost productivity (9), and data from the
National Vital Statistics System were used for asthma mortality among
school-age children (2). Both national and per capita estimates were
calculated. All costs were in 2003 dollars.
Data source and data processing
The MEPS is the third in a series of national probability surveys conducted
by the Agency for Healthcare Research and Quality (AHRQ) on the financing and
use of medical care in the United States. MEPS actually comprises a
family of four surveys: 1) a household survey; 2) a survey of medical providers;
3) a survey of health insurance providers; and 4) a survey of nursing home
residents. Using the NHIS as its sampling frame, the MEPS household component (MEPS–HC)
is designed to provide estimates of health care use, spending, sources of
payments, and insurance coverage for the U.S. civilian noninstitutional
population. Using an overlapping panel design, self-reports of health care use
and spending are collected at the person and household levels through five
rounds of in-person interviews that occur during a 30-month period. This yields
two full years of data. The MEPS medical provider component (MEPS–MPC) is a
survey of medical providers that are directly linked to the respondents in the
household survey. The MEPS–MPC is used to replace or to supplement household
data to reduce potential bias from relying solely on self-reported data. The
MEPS–MPC focuses on medical events and collects information on dates of visit,
diagnosis and procedure codes, and charges and payments.
Although MEPS data are generally available from 1996 to 2000, we chose to use
1996 data for this study because only 1996 data have information on SADs. The
data used in this article were derived from the 1996 Person-Level Full-Year File
(HC-012) and the Person-Level Medical Event Files (HC-001). The 1996 MEPS–HC
comprises a sample of 10,597 households and 23,565 individuals. Hispanic households were oversampled at ratios of approximately 2:1;
African American households were oversampled at ratios of approximately
1.5:1. The subsample of individuals used in this study consisted
of all children aged five to 17 years in 1996 and was further divided into two
condition groups: children with asthma and children without asthma. In this
study, the definition of children with asthma was further refined to include
children who had any type of health care provider visit or prescription
medication related to asthma during the year. All other children in the
study sample were classified as children without asthma. We identified the
children with asthma through diagnosis code 493, according to the International
Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM)
(10). An event cost associated with an ICD-9 code of 493 was considered
an asthma-related medical care cost and was derived from the event files. Using the
full-year file, we derived estimates of all-cause medical spending and SADs for
each condition group.
Expenditures in the 1996 MEPS are defined as the sum of direct payments for
care provided during the year, including out-of-pocket payments and payments by
private insurance, Medicare, Medicaid, and other sources. For this analysis, the
medical events were classified and enumerated into the following mutually exclusive categories: purchase of prescribed medicines, hospitalizations, emergency room (ER)
visits, outpatient hospital visits, office-based visits, other medical
equipments, and home health care.
To derive SAD estimates, we had to address two data issues in the 1996 MEPS.
First, Round 3 was conducted in 1996 and 1997; some data from Round 3 pertain
to 1997. The number of days lost from school in Round 3 that occurred in each
calendar year was not ascertained. We developed an algorithm for deciding what
portion of the reported SADs occurred in 1996 (the number of days in Round 3 in
1996 divided by the total number of days in Round 3 and then multiplied by the
total number of SADs in Round 3). Second, two variables have missing data — the
ending date of Round 3 and SADs in Round 3 (34 children with asthma and 583
children without asthma). We used the SAS Multiple Imputation Procedure to
impute the missing values for the two variables (11).
The data were initially processed with SAS software (SAS Institute, Inc,
Cary, NC). All estimates produced in this study were weighted to represent the
U.S. population. The sampling weights were used to adjust for potential survey
response bias. SUDAAN software (Research Triangle Institute, Research Triangle
Park, NC) was used to account for the complex sample design
in the computation of the final estimates and standard errors for the estimates
produced (12). Linear regression analyses were conducted to estimate excess
all-cause medical costs and excess SADs for children with asthma compared with
children without asthma, controlling for the effects of sociodemographic and
access-to-care variables such as age, sex, race, mother’s education level,
poverty status, and health insurance coverage.
Calculation of direct and indirect costs
Asthma-related expenditures were considered as the direct costs of asthma;
estimates were directly derived from MEPS data. The costs of parents’ loss of
productivity due to SADs were calculated as the product of SADs associated with
asthma and the cost of lost productivity (value of a day lost). The costs of
loss of productivity due to premature death were calculated as the product of
asthma mortality and the cost of lost productivity (discounted value of future
According to a previous published study (9), the value of a lost day was
estimated to be $108 (in 2000 dollars) or $115 (in 2003 dollars), which was
calculated as the sum of annual earnings and annual household services divided
by 365. The same study also reported the present value of future total earnings
(including fringe benefits) and of the combination of future earnings and
household production. Estimates are reported at each exact age in five-year
intervals, beginning with birth. The reported estimates (in 2000 dollars and
discounted at 3%) are $1,064,530 for a
child aged five years, $1,176,371 for a child aged 10, and $1,290,814 for a
child aged 15. In this study, we used the
average of the three estimates — $1,254,347 (in 2003 dollars) — as the present
value of future total earnings of children who are currently aged five to 17
A recent study by Akinbami and Schoendorf used data from the Mortality
Component of the National Vital Statistics System and reported that annual
asthma mortality (per million) was 2.7 among children aged five to 10 years and
5.6 among children aged 11 to 17 years during 1995–1996 (2). We used these
mortality estimates and the 1996 Census data to calculate the total asthma
mortality of children aged five to 17 years as 211.
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As shown in Table 1, of a total of 4786 children aged five to 17 years in our
study sample, 248 had asthma-related care during 1996, representing 2,521,537
children in the United States. The annual treated prevalence rate of asthma was
4.9% (2,521,537/51,605,560). Among all of the children with asthma in the nation during 1996, 68% had
at least one health care provider visit of some type, and 94% purchased
prescriptions for asthma medication and devices. The percentage of children with
asthma who used asthma-related care by category of service was 61% for
office-based visits, 10% for ER visits, 3% for outpatient
visits, and 2% for hospitalization. Sixty-five percent of children with asthma
purchased quick-relief medicine for asthma and 36% purchased controller medicine
for asthma. Asthma-related medical costs were $1009.8 million ($401 per child)
among all school-age children with asthma in the nation. The distribution of
asthma-related expenditures shows that 43% of the total expenditure was in
prescribed medicine, followed by 36% in outpatient and office-based visits and
21% in hospitalization and ER care.
Table 2 shows the all-cause medical care costs of children with asthma and
children without asthma. The all-cause medical costs of children with asthma totaled
$2590 million during 1996, with asthma-related care accounting for 39% of the
all-care costs. The weighted per capita costs were $1042 for children with
$618 for children without asthma. Compared with a child without asthma, a child
with asthma had an excess of $424 in all-cause medical spending. Comparing the
cost distribution of children with asthma to children without asthma, children with
asthma had a higher proportion of all-cause medical expenditures in
prescriptions, office-based visits, and outpatient visits and a lower proportion
of expenditures in hospitalization and ER visits.
Table 3 shows the estimates of
SADs in children with and without asthma as
well as excess SADs of children with asthma compared with children without
asthma. Among 2.5 million school-age children with asthma, a total of 14.5
million SADs occurred. On average, a child with asthma missed 2.48 more days of
school than a child without asthma (5.81 SADs per child with asthma and 3.33 SADs
per child without asthma). The total number of SADs associated with asthma among
all of the children with asthma was 6.3 million, accounting for 43% of the total
SADs of all of the children with asthma for all illness and injury.
As shown in Table 4, the direct costs of asthma were estimated to be $1009.8
million ($401 per child). The indirect costs of asthma were estimated to be
$983.8 million ($390 per child), including $719.1 million ($285 per child)
associated with SADs and $264.7 million ($105 per child) associated with
premature deaths due to asthma. The total economic impact of asthma in
school-age children was $1993.6 million ($791 per child).
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This study is the first to produce both national and per capita estimates of
direct and indirect costs of children with asthma. Although only 4.9% of
U.S. children, or 2.5 million children nationally, had any type of health care
provider visit or prescription medication related to asthma during 1996
(parent-reported asthma prevalence was 5.9%), the economic impact of asthma
among those children is substantial. The direct costs of asthma were estimated
to be $1009.8 million ($401 per child). The indirect costs of asthma were
estimated to be $983.8 million ($390 per child), including $719.1 million ($285
per child) associated with SADs and $264.7 million ($105 per child) associated
with premature deaths due to asthma. The total economic impact of asthma in
school-age children was $1993.6 million ($791 per child).
Unlike most of the previous studies of childhood asthma, this study focuses
on children who had any treatment for asthma during 1996. Before 1997, no other
national survey collected information to measure treated prevalence or attack
prevalence. After the 1997 redesign of the NHIS questionnaire, information to
estimate asthma attack prevalence was obtained. The 1996 treated prevalence of
asthma derived in this MEPS study (4.9%) is close to the attack prevalence
derived from the 1997 NHIS (5.9% among children aged five to 10 years and 6.0%
among children aged 11 to 17 years). The annual prevalence of parent-reported
asthma in this MEPS study (5.9%) is in the general range of other recent
studies, where the prevalence of asthma in 1996 has been reported previously to
be 5.5% among individuals aged five to 20 years (2), 7.4% among children aged five
to 10 years, and 7.7% among children aged 11 to 17 years (2).
Although two studies by Weiss et al (4,5) have previously
estimated direct medical expenditures of asthma in children, their estimates are
not comparable to ours because of two major differences. First, they used
charges data, which are very different from the payment data we used in this
study, to derive cost estimates. Second, they studied costs for all children aged from birth
to 17 years, rather than for the school-age children we focused on in this
study. Although there is no comparable per capita estimate in the literature to
compare with our estimate of asthma-related medical costs, we found that our per
capita estimate of asthma-related costs ($401) is very close to our estimate of
the excess all-cause medical spending ($424) per child with asthma compared with
a child without asthma.
To our knowledge, this is the first study that uses MEPS data to derive SAD
estimates for children with asthma. Most early SAD estimates were produced using
NHIS data. To compare the results of this MEPS study with those of the most
recent NHIS study, one should keep in mind two differences between the studies.
First, as noted earlier, the definition of children with asthma is different. In
this study, only children who had treatment for asthma were identified as
children with asthma. In the NHIS study, the definition of children with asthma
was broader: children with asthma did not have to have treatment if their
parents believed that they had asthma during the year. Second, the information
collected on SADs is different between the two data sets. Although the 1996 MEPS
obtained information on the total number of SADs for each child and on
the conditions that caused the SADs, it collected no information on the number
of SADs associated with a particular condition. Thus, our SAD estimates reflect
annual SADs resulting from all conditions. In contrast, the NHIS provided data
on the number of SADs resulting from specific conditions (i.e., SADs associated
with asthma). Based on the MEPS data, we found that the total number of SADs in
1996 resulting from all conditions was 14.5 million among children with treated
asthma (5.75 days per child). On average, a child with asthma had an excess of
2.5 SADs compared with a child without asthma. The study using 1994–1996 NHIS
data found that the annual number of SADs associated with asthma was 14 million
(3.7 days per child) among children with parent-reported asthma. Although
our SAD estimates are different from those of the NHIS study, we found that the
proportion of all children with asthma who had asthma-related SADs (49%)
is interestingly close to the proportion of all SADs associated with asthma at
the individual level (42% = 2.48/5.81). This indicates internal consistency in
the MEPS data.
Like many other cost analyses, this study has some clear limitations. The
results of this study should be interpreted with some degree of caution. First,
as noted earlier, the medical condition data in the MEPS were derived from
parents’ reports; they may not conform perfectly to diagnoses made by
physicians. However, a study by AHRQ staff indicated that, at the three-digit
ICD-9 code level, there was agreement between household- and provider-reported
conditions in the overwhelming majority of cases (13). In addition, this concern
is minimized by the fact that most of the children (94%) who were classified as
children with asthma in this study had purchased prescription medicine for
asthma. Second, in the MEPS event data file, a health service may occur for
multiple reasons; spending associated with specific conditions is not mutually
exclusive. However, in this study, we also estimated all medical spending for
children with asthma and compared them with children without asthma. Because the
estimated per capita asthma-related cost ($401) is very close to the estimated
excess cost per child with asthma ($424), it is reasonable to believe that our
direct cost estimates are fairly accurate. Third, we did not use asthma
medication data as a means of identifying children with asthma; we might have
underestimated the treated prevalence as well as the national medical
expenditure of children with asthma. There were more probable asthma cases in
the 1996 MEPS data. Among children who had neither proxy-reported asthma nor
treated asthma in the study sample, 15 probably really had asthma because they
purchased albuterol more than once during a year. Fourth, we have significantly
underestimated the direct costs of asthma in school-age children, because
children with asthma receive a substantial proportion of care in school
settings. Because MEPS is limited to expenditures in medical settings, the cost
of services provided by the school system, such as nursing care and first-aid
care provided by school nurses, school health aids, and school secretaries,
were not included in this study. Fifth, the sample size for inpatient,
outpatient, and emergency care was small. However, the focus of this study was
total medical expenditures across all medical care services, for which we had a
sufficient sample size to be confident in both national estimates and per capita
Even with these limitations, it is reasonable to conclude that the economic
impact of asthma to school-age children, families, and society is immense, and
more public health efforts are needed to better control asthma in children.
Evidence from evaluation studies of asthma intervention programs suggest that
asthma among school-age children can be controlled, and significant cost
savings in medical care and parents’ loss of productivity from asthma-related SADs can be realized, especially when the programs are aimed at children with
moderate to severe asthma (14-21). Two economic studies of clinical-based asthma
education programs have documented cost savings from $180 per enrolled child
with at least persistent asthma to $542 per enrolled child with a history of
frequent use of ER services for asthma (14,15). One particularly well-designed
randomized controlled trial of an inner-city social-worker–based education
program was able to demonstrate cost savings of $2509 per child with one or more
hospital visits at baseline, $1050 per child with two or more unscheduled visits
at baseline, and $220 per child with more than 50% of days with asthma symptoms
(16). Two studies of asthma management programs found a cost savings of $1144
per inpatient child as a result of an inpatient asthma clinical pathway and a
cost savings of $1667 per child with one or more hospitalizations or two or more
ER visits during a six-month period as a result of a home-based self-management
program (17,18). Studies examining the impact of asthma interventions on SADs
have also found significant reduction in SADs, including a 1.8-day reduction by
a school-based asthma education program, a two-day reduction by a summer asthma
camp-based education program for children with moderate to severe asthma, and a
2.5-day reduction by a large-scale population-based asthma management program
for asthma patients and their caregivers (19-21).
Based on the medical cost estimates derived in this study, we found that
$211.4 million in medical expenditures (21% of the total asthma-related
medical expenditures in 1996) are preventable with effective asthma
interventions, including $120.8 million in inpatient care and $90.6 million in
ER care. In addition, published asthma intervention studies reveal that SADs
related to asthma can be reduced by 1.8 to 2.5 days (19-21). Since the cost
estimate of parents’ loss of productivity derived in this study was based on an
additional 2.5 SADs per child with asthma relative to a child without asthma, it
is reasonable to believe that more than half of the total indirect costs of
parent’s loss of productivity ($983.8 million) are preventable with effective
interventions. However, to achieve such cost savings, more public health efforts
are needed to educate parents and children on the child’s condition and
medications, the need for follow-up care, and the importance of avoiding known
disease triggers. To ensure the success of such effort, education of primary
care providers and school staff and efficient collaboration among
primary care providers, school health professionals, and health education
professionals are essential.
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Corresponding author: Li Yan Wang, MBA, MA, Surveillance and Evaluation
Research Branch, Division of Adolescent and School Health (DASH), National Center for
Chronic Disease Prevention and Health Promotion (NCCDPHP), Centers for Disease
Control and Prevention (CDC), 4770 Buford Hwy, Mail Stop
K-33, Chamblee, GA 30341. Telephone: 770-488-6195. E-mail: email@example.com.
Author affiliations: Yuna Zhong, MD, MSPH, DASH, NCCDPHP, CDC, Atlanta,
Ga; Lani Wheeler, MD, DASH, NCCDPHP, CDC, Annapolis, Md.
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