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Cost of illness (COI) is defined as the value of the resources that are expended or forgone as a result of a health problem.
History, Science and Methods
Economic Estimates
Epidemiology of primary bone tumors and economical aspects of bone metastases
Cost of illness
Epidemiology of Primary Bone Tumors and Economical Aspects of Bone Metastases
IX. Cost of Illness
Medical Diagnosis & Therapy
Estimating the Costs (Resource Use) of Medical Therapy for Glaucoma
Economic Considerations in the Treatment of Rheumatic Diseases
Descriptive Studies
Economics and Patient Reported Outcomes
8.4.1 Choosing the Right Analysis
Pharmacoeconomic Analyses and Modeling
Pharmacoeconomic Evaluation Purpose
Economic Burden of Rheumatic Diseases
Conclusions
The Economics of Osteoporosis
A. Direct Medical Costs
The Social and Economic Impact of Rheumatoid Arthritis
Intangible Costs
What are examples of intangible costs?
What is an example of an indirect cost of health care?
What is cost utility analysis in healthcare?
From: Bone Cancer, 2010
History, Science and Methods
R.J. Lake, … A.H. Havelaar, in Encyclopedia of Food Safety, năm trước
Economic Estimates
Cost of illness estimates have been extensively investigated in the US. A series of estimates have been published by
the USDA Economic Research Service (ERS), beginning with a 1996 estimate of the cost of foodborne illnesses from six bacterial pathogens of $2.9–6.7 billion (US). This estimate was based on a COI approach, including foregone earnings of affected individuals, and productivity losses. More up-to-date estimates have been provided at the ERS website.
A 2009 estimate of the cost of foodborne illness for six major foodborne enteric diseases in New Zealand of $162
million (NZ$) has been published. The estimate of the value of personal and lifestyle costs (pain, suffering and disruption, including the possibility of premature death) was based on a WTP estimate for the value of a statistical life. This estimate also included costs for treatment and lost production, as well as industry and regulatory costs.
An Australian estimate of the cost of foodborne illness, published in 2006, also incorporated industry and
regulatory costs, although these were modest compared with productivity and lifestyle costs. The overall cost was estimated as $1249 million with productivity and lifestyle costs being $772 million (AU$), largely based on WTP by individuals to avoid illness.
Epidemiology of primary bone tumors and economical aspects of bone metastases
Esther I. Hauben, Pancras C.W. Hogendoorn, in Bone Cancer (Second Edition), năm ngoái
Cost of illness
Cost of illness (COI) is defined as the value of the resources that are expended or forgone as a result of a health problem. It includes
health sector costs (direct costs), the value of decreased or lost productivity by the patient (indirect costs), and the cost of pain and suffering (intangible costs)32. Direct costs for the health sector are: hospitalization, medication, emergency transport, and medical care. In addition, the patients and family have costs directly related to treatment of illness, as there are non-refunded payments for hospitalization, medical visits and drugs; transportation of
patient and family for health visits; transportation of family to visit the hospitalized patient; modifications at home as a result of illness; and costs for taking care of the patient at home.
Decreased or lost productivity can be the result of illness, premature death, side effects of illness or treatment, or time spending receiving treatment. This not only affects the patient but also the family members, who reduce or stop their employment to take care of
the patient. With premature death, the indirect cost is the loss in potential wage and benefits.
From the foregoing, it is clear that it is difficult to estimate the COI. The easiest cost to calculate is the direct cost for the health care system. The direct costs for the patient are more difficult to estimate, because data on the costs are usually insufficient or inexact. The most difficult to estimate are the intangible costs, and the cost of loss of
productivity. Most studies on the economic burden of illness focus only on the direct medical costs for the health care sector, thus underestimating the total cost of illness.
Cost analysis gives an indication of the financial impact of disease, and provides information to policy makers, researchers, and medical specialists that can be considered in making more efficient use of resources. Additionally, on the basis of distinction between different cost
components, it may be possible to estimate the financial aspect of various treatment strategies, which can influence the choice of treatment.
Epidemiology of Primary Bone Tumors and Economical Aspects of Bone Metastases
Esther I. Hauben, Pancras C.W. Hogendoorn, in Bone Cancer, 2010
IX. Cost of Illness
Cost of illness (COI) is defined as the value of the resources that are expended or forgone as a result of a health problem. It includes health sector costs (direct
costs), the value of decreased or lost productivity by the patient (indirect costs), and the cost of pain and suffering (intangible costs) [32,33]. Direct costs for the health sector are: hospitalization, medication, emergency transport, and medical care. Also the patients and family have costs directly related with the treatment of an illness as there are non-refunded payments for hospitalization, medical visits and drugs; transportation of patient and family for health
visits; transportation of family for visiting the hospitalized patient; modifications made to a home as a result of the illness; costs for taking care of the patient at home, etc. [33].
Decreased or lost productivity can be the result of illness, premature death, side effects of illness or treatment, or time spent receiving treatment. This does not only affect the patient but also the family members who reduce or stop working so that they can
take care of the patient. Premature death can mean an indirect cost for the loss of potential wages and benefits.
It is clear that it is difficult to estimate the impact the COI would have based on the above. Indeed, the easiest cost to calculate is the direct cost for the health care system. The direct costs for the patient may be hard to estimate, because data on the costs can often be insufficient or inexact. The
most difficult to estimate are the intangible costs, and the cost of loss of productivity. Most studies on the economic burden of illness focus only on the direct medical costs for the health care sector, thus underestimating the total cost of illness.
Nevertheless, cost analysis gives an indication of the financial impact of disease and provides information to policy makers, researchers, and medical specialists. This information can be considered when
making decisions based on more efficient use of resources. Additionally, on the basis of distinction between different cost components, it may be possible to estimate the financial aspect of various treatment strategies, which can influence the choice of treatment.
Jennifer Burr, Luke Vale, in Glaucoma (Second Edition), năm ngoái
Estimating the Costs (Resource Use) of Medical Therapy for Glaucoma
Cost-of-illness studies determine the total financial burden of a disease by considering ‘direct’ and ‘indirect’
costs. The direct costs of glaucoma treatment include the costs of the tests and treatment, costs of visits including the costs to patients of attending and the costs of healthcare personnel and facilities. Direct costs also include the expected costs of side effects and adverse events. Direct costs might also include the costs of social tư vấn such as use of aids and equipment or adaptation of homes and living spaces to mitigate the effects of visual impairment for those with severe
glaucoma. The direct costs of glaucoma are usually higher during the first year following diagnosis as treatment is stabilized and increase for those with more severe glaucoma.4 Thus, minimizing visual impairment by an effective treatment schedule and improving adherence and compliance with treatment may all contribute to a reduction in the overall economic burden of glaucoma. The indirect costs of glaucoma include loss of productivity and the need for informal
personal care (and the associated impact on the employment of informal carers). Many of these indirect costs are related to the level of visual impairment and are not necessarily specific to glaucoma.
Critical to the consideration of cost is the perspective of the analysis. Commonly adopted perspectives are those of healthcare providers (e.g. a hospital); payers (e.g. a publicly funded National Health Service (NHS) or managed care organization); social
services; patients or, in the widest form, society. Whose perspective is taken can be very important as taking a narrower perspective, e.g. the NHS alone, could lead to a different conclusion being drawn than when a wider perspective, e.g. the NHS and the patient, is taken.
Economic Considerations in the Treatment of Rheumatic Diseases
Gisela Kobelt, in Targeted Treatment of the Rheumatic Diseases, 2010
Descriptive Studies
Cost of illness or burden of illness studies provide information on
how much is spent on a given disease. They can be prevalence or incidence based. Prevalence studies will inform about the total amounts spent, and their distribution on different resource types, during a defined time frame (most often a year) and in a defined geographic area (most often a country). Costs can be expressed as average costs for a patient, or total costs for all patients with the disease. A recent study estimated these costs for patients in different countries, using an economic
model to impute costs from countries with existing data to countries without data.8Table 32-3 shows mean costs per patient and total costs for the estimated prevalence in some selected countries. From these estimates, it also becomes obvious that spending on disease differs between countries with different incomes, illustrating the issue of affordability mentioned above.
Table 32-4 lists the typical
resources that are relevant for studies in rheumatic diseases, whereas Table 32-5 indicates some sources for differences in published studies. Figure 32-4 illustrates the cost structure in a sample of around 1500 RA patients in France.9
Costs can also be estimated for patients at different stages of the disease. This is particularly important for chronic progressive disease in which the goal of treatment is
to prevent patients from developing severe disease, or slow the progression to severe disease. In diseases such as RA or AS, but likely also other rheumatic diseases, costs increase steadily and substantially as the disease gets more severe. Figure 32-5A illustrates the increase in costs with decreasing functional capacity measured with the Health Assessment Questionnaire (HAQ)10 in France.9
Figure
32-5A also shows that it is essentially costs outside the health care system, such as family help (informal care), investments to enable activities of daily living (ADLs), and productivity losses that make up for most of the cost increase. When only those costs that occur to public payers are included (health care, community care, sick leave compensation, and invalidity pensions), the increase is far less steep, providing less opportunities for cost savings (Fig. 32-5B).
Hence, the major economic opportunity with disease-modifying treatments lies outside the health care system which, however, has to finance the treatment. Costs of treatment occur in one part of our economy, whereas the benefits occur in another. This argues for adopting a societal perspective and put away the restricted budget mentality inherent in our health care organization. Despite this, many countries will consider only health care costs (direct medical costs) when deciding on reimbursement
of new treatments, an approach that can considerably underestimate the benefit of treatment, in particular in terms of contribution to the economy (productivity).
Early in most rheumatic diseases, productivity losses will come from short- and medium-term sick leave due to episodes of severe inflammation and pain. As the disease progresses, up to half of the patients with RA have to leave the workforce permanently. Figure 32-6 shows the gap in
workforce participation among patients below retirement age, with decreasing functional capacity, compared with the general population.9
All estimates of how costs progress with the disease so far were based on functional capacity, which is indeed by far the strongest predictor of resource consumption. However, inflammation cannot be ignored as a cost driver, as illustrated in Figure 32-7 for
AS.11–13 Inflammation and function cannot be dissociated. However, the effect of disease activity on costs is much more limited than the one of function, most likely because inflammation can be periodical and reversible or controlled.
Much more clearly than on costs, function and disease activity have an independent effect on patients’ QoL. A number of cross-sectional studies have shown that, at the same level of HAQ, QoL is different
for patients with high or low disease activity. In all of these studies, QoL has been measured as utility, a generic preference weight for given states of health best thought of as a type of index for QoL. Utility scores are expressed as a value on a scale anchored between 0 (death) and 1 (perfect health). They can be measured directly using techniques from decision analysis (standard gamble, time trade off)14 or derived from health status systems (tariffs) such as those
developed for the EQ-5D, the Health Utility Index (HUI), or the Short Form-36 (SF36).15–18Figure 32-8 highlights how in RA utilities are affected by both HAQ and disease activity, in a sample of patients in Sweden.19 Economic evaluations of treatments must thus incorporate both measures, particularly because treatment is targeted primarily at inflammation.
Richard Chin, Bruce Y. Lee, in Principles and Practice of Clinical Trial Medicine, 2008
8.4.1 Choosing the Right Analysis
Choosing the right economic analytic method
entails defining the question first. Do you want to know whether a disease or condition is worth addressing? Do you want to choose among different alternatives? Are you unsure about how much money to invest in developing a treatment? What should the price or reimbursement for your intervention be? In many cases, one analytic method will not suffice, and a progression of different methods will answer a question. Table 8.1 lists some common health economic analyses.
TABLE 8.1. Common Health Economic Analyses
Question
Costs
Rewards
Cost-of-illness (COI) analysis
Economic impact of disease
Monetary units
None
Cost-of-treatment analysis
Economic cost of intervention
Monetary units
None
Cost-minimization analysis (CMA)
Choose best alternative when effects are equal
Monetary units
None
Cost-benefit analysis (CBA)
Choose best alternative when rewards can be expressed in monetary units
Monetary units
Monetary units
Cost-effectiveness analysis (CEA)
Choose best alternative when rewards expressed in simple clinical units
Monetary units
Clinical units (e.g., life years saved and hospitalizations averted)
Cost-utility analysis (CUA)
Choose best alternative when rewards expressed in health status units
Monetary units
Health status units (e.g., QALYs)
A cost-of-illness (COI) study can help quantify a disease’s total monetary effect, including all the resulting medical and nonmedical costs (e.g., loss of productivity). A well-performed COI study will show not only the total cost (e.g., disease A costs society $750 million annually), but also different strata and categories of cost, such as the amount spent on medications, hospitalizations, emergency care,
and days off from work (e.g., $100 million from hospital visits, $200 million from clinic visits, $250 million from lost productivity, and $200 million from medications), allowing you to target the areas of greatest economic burden. Often, the first step in tackling a new and unfamiliar disease is a COI study to “map” out the problem.
A COI study can serve multiple purposes, such as:
•
Determine whether a problem is worth
tackling. A COI study can identify which diseases and conditions should be addressed. For example, acne and hangnails are two very common conditions. However, acne probably has more economic cost than hangnails. People purchase a variety of facial washes, creams, and medications to prevent or conceal acne. Acne may cost people dates and/or job promotions. By contrast, hangnails do not create as many hassles. Therefore, an economic study could show that pursuing an acne treatment may be more
worthwhile than pursuing a hangnail treatment.
•
Demonstrate the size and importance of the problem. A COI study can convince others that a disease or condition should receive more attention. Sometimes the full impact of a disease or condition is very subtle but far-reaching. An example is sleep disorders. While failing to get regular sleep may not have consequences as dramatic as a heart attack, over time insomnia can result in
substantial loss in productivity and increased health care expenditures from developing depression, suffering fatigue and getting sick more often. A COI study could delineate the economic impact of these effects.
•
Find unexpected costs. Often people will not realize the effects of a disease or condition. For example, if an employer learns that a disease affects an employee’s
productivity, the employer may be willing to subsidize treatment for the disease.
There are different types of COI studies. Prevalence COI studies tabulate the total cost of a disease per year. Incidence studies calculate the total cost of a disease throughout a patient’s lifetime. A COI study may sum the costs of a single patient, a specific group of patients, or all patients with the disease. Establishing the costs-of-illness for a
“typical” patient can be challenging, since patients may vary substantially. Therefore, it may be more useful to identify a median, mean, and standard deviation of disease-related costs.
After profiling a problem, a cost-of-intervention or cost-of-treatment analysis can profile all the monetary costs associated with administering an intervention. While some interventions are relatively simple to administer (e.g., simply taking a pill), others involve a
range of different steps and materials (e.g., surgery). Cost-of-intervention studies should include and clearly identify every important fixed and variable cost. Running multiple scenarios may show how variable costs change with different situations.
Cost-of-intervention studies can serve several purposes:
•
Outline which interventions are economically feasible. No matter how effective, an intervention may be
prohibitively expensive to use. Moreover, you may want to reserve relatively expensive interventions for unusual, very-difficult-to-treat situations.
•
Identify targets for cost reduction. Cost-of-intervention studies may help determine which steps or materials in an intervention are particularly expensive and find less expensive alternatives. Sometimes the cost-driver (i.e., the item or step that contributes the most to
the overall cost of the intervention) of the intervention is unexpected.
•
Choosing the best intervention among equally effective, safe, and convenient interventions. When two or more interventions are no different in efficacy, safety or ease of use, the primary factor in choosing an intervention is cost. Insurance companies and health care organizations will often use cost-of-treatment studies to determine the cost savings from
switching to a generic version of a medication or an alternative “equivalent” treatment.
After you profile possible treatments, a cost-minimization analysis (CMA), cost-benefit analysis (CBA), cost-effective analysis (CEA), or cost-utility analysis (CUA) can help choose among multiple alternative treatments. The type of problem guides the choice of analysis. If all treatments have equivalent effects, a CMA, which focuses
only on costs, can help choose the least expensive treatments. For example, if Medication A and Medication B have the same success rate in treating a disease, a CMA might find that Medication A should be used because it costs $200 less. If the potential effects are different but easily translate to monetary terms (e.g., dollars, yen, pounds), a CBA is suitable. A CBA converts all rewards and costs of each option into comparable monetary terms. A benefit is a reward expressed in monetary
terms. All costs and rewards must be in equivalent monetary terms (e.g., you cannot have some rewards in dollars and others in yen) and present day values (i.e., net present value). So, for instance, a CMA may find that Medication A that costs $300 but potentially could save $1000 from preventing lung disease (a net benefit of $700 = $1000 – $300) to be favorable to Medication B that costs $100 but could save only $400 (a net benefit of $300). However, if all the potential rewards do not
translate easily into pure monetary terms, a CEA (which measures rewards in simple clinical units such as life years saved, deaths avoided, or operations avoided) or a CUA (which measures rewards in health status measures like QALYs or utilities) is more useful. A CEA and CUA will measure the costs and rewards of each alternative separately and compare the alternatives using incremental cost-effectiveness (or cost-utility) ratios.
Any CBA, CEA, or CUA
should not include sunk costs, that is, costs that already incurred before the time frame of the study and thus are not recoupable. Such costs would be part of any possible option and therefore will not help decide among different options. For example, in deciding what medication to give a patient after heart surgery, do not include the cost of the heart surgery. The sunk costs of heart surgery should not affect the choice of medication.
A common
mistake in CBA’s, CEA’s, and CUA’s is double-counting of costs and rewards. An intervention may result in seemingly two separate rewards that are in fact different variations of the same reward. For example, an asthma medication may help a person breathe better and improve her productivity at work. If you were to use days present at work as a measure of productivity, do not also use the number of projects completed. Counting and summing both will result in double-counting. Someone who
is at work more often most likely will complete more projects.
Some costs and rewards may be contingencies, that is, there is a chance that they may occur. For example, after knee surgery, some (but not all) patients may need very strong pain medications. In some cases, a repeat operation may be necessary. The value of a contingency is equal to its cost or reward multiplied by the probability of the contingency occurring.
Dixon Thomas, … Hong Li, in Clinical Pharmacy Education, Practice and Research, 2019
Pharmacoeconomic Evaluation Purpose
A COI study aims to measure the burden of a disease
with regards to costs. This could be useful to prioritize between diseases but does not help in getting an efficient healthcare allocation for coverage and reimbursement decisions of a particular intervention. (A high-cost burden does not mean that treatments are available to reduce this burden.) As affordability is also important for short-run economic purposes, a BIA is often undertaken. By estimating the impact of the new drug on healthcare budgets, this method assesses the affordability of a
healthcare intervention if the intervention is used within an environment as compared to not used within an environment.
A full economic evaluation aims to assess the value of money or efficiency of healthcare resources. The preferred type of economic evaluation is CUA because it allows the use of the same health outcome for all interventions and diseases, and thus to help decision makers to allocate resources efficiently.
Edward Yelin, in Kelley and Firestein’s Textbook of Rheumatology (Tenth Edition), 2017
Conclusions
Researchers use cost-of-illness studies to describe the
impact of conditions on individuals and society (the positive function) and to assist policymakers in allocating resources to redress those burdens (the normative function). Some have criticized the development of such measures of impact because it deflects attention from assigning relative values to interventions that might alleviate the impacts (i.e., from calculating the cost-effectiveness of interventions regardless of the condition for which they are to be used).86
In essence, they argue that the fact of presenting large estimates of burden may mean that resources may be diverted from using highly cost-effective interventions on conditions of small prevalence even when no effective interventions exist for the conditions of high prevalence and impact, in effect, wasting money.
However, an effective counterargument is that allocation decisions will still be made on criteria other than cost-effectiveness. For example,
Verbrugge87 long ago noted that fatal conditions tend to garner more attention from policymakers. This puts at a disadvantage groups with conditions with apparent low fatality rates but which are severely disabling. She observed that men tend to have higher rates of many fatal conditions, particularly cardiovascular disease, whereas women have higher rates of musculoskeletal and neurologic conditions that may have severe impacts but which are not commonly considered to
cause mortality.
Certainly societies should allocate services on the basis of the return from the investment, but we must also be certain that we do not unduly discriminate against those with conditions that do not always garner attention proportional to their effect on people’s lives. At the least, we must acknowledge the positive aspect of cost-of-illness studies in describing how resources that are diverted by disease could be used for other purposes were
the disease to be eradicated, to provide a measure of the potential returns from effective interventions as they arise.
This debate about the role of cost-of-illness studies notwithstanding, there is no debating that musculoskeletal conditions do divert substantial resources from other uses and that the amount has been increasing because of the aging of the population and increases in the amount spent to treat them, especially for medications. Since the U.S.
government began collecting MEPS data almost two decades ago, the gross economic impact of musculoskeletal conditions has grown by the equivalent of more than 4% of GDP, to 7.6%. If one accounts only for the increment expected of people of similar age and gender, the impact is smaller, but approximately a third of that total, not small. Musculoskeletal conditions do divert significant economic resources away from other uses because of the substantial expenditures for medical care and by
depriving the economy of the productivity at work and in other activities of those affected by the conditions.
The references for this chapter can also be found on ExpertConsult.com.
ANNA N.A. TOSTESON, DAVID J. VANNESS, in Osteoporosis (Third Edition), 2008
A. Direct Medical Costs
All osteoporosis cost of illness studies include estimation of direct medical costs. Direct costs are those associated with
goods and services and are often identified as transactions in the marketplace. A cost of illness study may focus exclusively on disease-specific direct costs (e.g., acute fracture repair and ensuing care) or may alternatively compare costs among those with the disease of interest relative to a group without the disease (i.e., using a control group) in an attempt to estimate the added cost of disease [5]. The latter approach has some appeal for diseases that affect older
populations where chronic comorbid conditions are common (e.g., diabetes, hypertension, etc.). However, it relies on identification of an appropriate control group and access to a comprehensive source of data regarding health care service utilization. As an alternative to analyses with control groups, before/after comparisons of costs are sometimes used to estimate the added cost of incident disease (e.g., fracture) [6].
Direct medical costs
associated with fracture are typically separated into distinct components based on specific types of services, with the most common broad categories being inpatient and outpatient care [7]. To facilitate cost estimation, care is disaggregated into distinct services, each having an associated cost, and units of service utilized in providing care are counted. Direct cost is then estimated by multiplying service units by unit cost and summing up across service types. For example, to
estimate direct medical outpatient costs associated with fracture, one study included the following components [8]: emergency room encounters, physician office visits, hospital encounters, physical therapy sessions, diagnostic radiology, medications, home health care visits, ambulance encounters, orthopedic and other supplies. Summing across all categories (e.g., inpatient, outpatient, etc.) provided an estimate of total direct medical cost
of fracture. We note that for some fractures, such as hip fracture, post-acute care costs that reflect either inpatient rehabilitation facility and/or a skilled nursing facility stay are important components of direct cost that warrant consideration.
The Social and Economic Impact of Rheumatoid Arthritis
Gisela Kobelt, in Rheumatoid Arthritis, 2009
Intangible Costs
The methodology for studies on the cost of illness of a disease lists three types of costs that should be included: direct, indirect, and
intangible costs. The latter are defined as the cost due to suffering from the disease and/or its treatment. Currently, there is discussion on how best to assign a monetary value to this suffering, and few studies have actually included these costs.
However, if we accept that the suffering is appropriately expressed in utility measurements, it is possible to compare the scores from patients to the values obtained
in the general population, thus estimating the loss of utility due to the disease. This difference, over the course of 1 year, will provide the loss of QALYs experience by patients with a disease. In countries where health technology assessment (HTA) and economic evaluation are actively used in decision making, such as when deciding on the reimbursement of a new treatment, the QALY is generally used as the outcome measure due to its comparability across diseases. Although no official threshold
for the willingness to pay for a QALY gained exists, it is generally implied from the way decisions have been made that treatments with an incremental cost of €50,000 per QALY gained (compared to standard treatment) are acceptable. Applying this threshold to the QALYs lost due to a disease provides one type of monetary estimate of intangible costs.
Using the most recent large cost-of-illness study in Europe,18 we have estimated the
QALY loss, compared to an age- and gender-matched population, at 0.3 QALYs, and thus an intangible cost of €15.000 per patient and year (Figure 7-3). It is interesting to note that the loss of utility is similar at all ages, despite worse HAQ scores for older patients, which would demonstrate the effect of coping with the disease.
An intangible cost is a cost that can be identified but cannot be quantified or easily estimated. Common intangible costs include impaired goodwill, loss of employee morale, or brand damage. While not directly measurable, intangible costs can have a very real impact on a company’s bottom line.
What is an example of an indirect cost of health care?
Indirect Costs – are costs that are not directly related to patient care. Examples of indirect costs include: general administration, health records, information technology, physical plant and maintenance, human resources, volunteer services, capital expenses, and other regional services.
What is cost utility analysis in healthcare?
Cost utility analysis ( CUA ) is one type of economic evaluation that can help you compare the costs and effects of alternative interventions. CUA measures health effects in terms of both quantity (life years) and quality of life.
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