Appendix B: Economic Burden of Illness in Canada, 2005–2008 – Definitions

Appendix B: Definitions

Diagnostic Category

A diagnostic category refers to a group of illnesses or injuries with similar characteristics. The diagnostic category is the first tier in EBIC’s two-tiered grouping system for physical and mental health conditions. For all cost components, with the exception of the value of lost production due to morbidity, costs are grouped into the appropriate diagnostic category using the International Classification of Diseases (ICD) codes. In the current edition of EBIC there are 24 unique diagnostic categories. The list of diagnostic categories and the associated ICD codes can be found in Appendix C.
Diagnostic Subcategory

A diagnostic subcategory refers to a group of illnesses or injuries with similar characteristics. The diagnostic subcategory is the second tier in EBIC’s two-tiered grouping system for physical and mental health conditions. Classification by diagnostic subcategory offers further specification than the classification by diagnostic category only. For all cost components, with the exception of the value of lost production due to morbidity, costs are grouped into the appropriate diagnostic subcategory using the International Classification of Diseases (ICD) codes. In the current edition of EBIC there are 165 unique diagnostic subcategories. The list of diagnostic subcategories and the associated ICD codes can be found in Appendix C.
Direct Costs

Direct costs refer to health care expenditures for which the primary objective was to improve and prevent the deterioration of health status. Three direct cost components were estimated in this report: hospital care expenditures, physician care expenditures and drug expenditures.  Other direct health expenditure totals, comprising other institutions and additional direct health expenditures (e.g. other professionals, capital, public health and other health spending), were included in this report but could not be attributed by EBIC category (diagnostic category, sex, age and province/territory). All direct cost component totals are included in NHEX (5). Total EBIC direct expenditures are compared with NHEX expenditure totals to calculate the amount of expenditures not attributable by EBIC category.
Drug Expenditures

Drug expenditure estimates include the public and private costs associated with prescription and non-prescription (i.e. over-the-counter) drugs purchased in retail stores (5). Estimates represent the final costs to consumers, including dispensing fees, markups and appropriate taxes.  Drugs dispensed in hospitals and other institutions are excluded. For the EBIC drug expenditure estimates, only expenditures for prescription drugs could be allocated across EBIC categories (diagnostic category/subcategory, sex, age group and province/territory).
Hospital Care Expenditures
Hospital care expenditures include all costs of operating and maintaining both public and private hospitals in Canada: drugs dispensed in hospitals; medical supplies; therapeutic and diagnostic outpatient costs; administrative costs; some research costs; accommodation and meals for patients; maintenance of hospital facilities; and gross salaries and wages for all hospital staff (such as physicians on hospital payroll, nurses, technicians and medical students).  EBIC 2004-2008 hospital care expenditures were estimated and distributed across diagnostic category/subcategory, sex, age group and province/territory for each year of analysis (5).
Indirect Costs

Indirect costs refer to the dollar value of lost production due to illness, injury or premature death. In this report, only the value of lost production due to an individual’s “own” illness, injury or premature death associated with labour market activities was considered (costs associated with non-labour market activities and informal caregiving costs were not included). The indirect cost components in this report are the value of lost production due to morbidity and the value of lost production due to premature mortality. In the current edition of EBIC, the friction cost method was adopted to value lost production due to illness, injury and premature death.
Other Direct Health Expenditures

Other direct health expenditures comprise costs for other institutions, other professionals (dental services, vision care services and other), capital, public health and other health spending (e.g. health research) (5).
Physician Care Expenditures

Physician care expenditures include fee-for-service payments made by provincial/territorial medical care insurance plans to physicians in private practice, as well as alternative forms of payment (salaries, sessional, capitation) made to physicians. Fees for services rendered in hospitals are also included in the physician care expenditures component when the provincial/territorial medical insurance plans make payments directly to the physicians (5).
Value of Lost Production due to Morbidity
Morbidity costs are incurred when some form of illness and/or injury results in time lost from productive activities, whether paid or unpaid. In this report, morbidity costs associated with labour market missed work days (absenteeism) were estimated using the friction cost method and a prevalence-based approach. The value of lost production due to morbidity was not estimated for presenteeism or non-labour market production losses. Furthermore, the morbidity cost estimates in this report included only lost production costs associated with an individual's “own” illness and injury; production losses due to informal caregiving for the sick and injured were not included.
Values of Lost Production due to Premature Mortality

Mortality costs are incurred as a result of premature death due to illness and/or injury. In this report, the value of lost production due to premature mortality associated with labour market activities was estimated using the friction cost method and a prevalence-based approach for individuals whose age at death was between 15 and 64 years.
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