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Breast and Prostate Cancer Productivity Costs: A Comparison of the Human Capital Approach and the Friction Cost Approach

Hanly, Paul, Timmons, Aileen, Walsh, Paul M. and Sharp, Linda (2012) Breast and Prostate Cancer Productivity Costs: A Comparison of the Human Capital Approach and the Friction Cost Approach. Value in Health, 15 (3). pp. 429-436. ISSN 1098-3015

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Productivity costs constitute a substantial proportion of the total societal costs associated with cancer. We compared the results of applying two different analytical methods—the traditional human capital approach (HCA) and the emerging friction cost approach (FCA)—to estimate breast and prostate cancer productivity costs in Ireland in 2008.

Data from a survey of breast and prostate cancer patients were combined with population-level survival estimates and a national wage data set to calculate costs of temporary disability (cancer-related work absence), permanent disability (workforce departure, reduced working hours), and premature mortality.

For breast cancer, productivity costs per person using the HCA were €193,425 and those per person using the FCA were €8,103; for prostate cancer, the comparable estimates were €109,154 and €8,205, respectively. The HCA generated higher costs for younger patients (breast cancer) because of greater lifetime earning potential. In contrast, the FCA resulted in higher productivity costs for older male patients (prostate cancer) commensurate with higher earning capacity over a shorter time period. Reduced working hours postcancer was a key driver of total HCA productivity costs. HCA costs were sensitive to assumptions about discount and growth rates. FCA costs were sensitive to assumptions about the friction period.

The magnitude of the estimates obtained in this study illustrates the importance of including productivity costs when considering the economic impact of illness. Vastly different results emerge from the application of the HCA and the FCA, and this finding emphasizes the importance of choosing the study perspective carefully and being explicit about assumptions that underpin the methods.

Item Type: Article
Subjects: Q Science > Life sciences > Medical sciences > Pathology > Tumors > Cancer
H Social Sciences > Economics > Microeconomics > Production (Economic theory) > Industrial productivity > Labor productivity
Divisions: School of Business > Staff Research and Publications
Depositing User: Caoimhe Ní Mhaicín
Date Deposited: 15 Sep 2014 08:17
Last Modified: 15 May 2018 14:40

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