Health costs of occupational disease in New York State

Occupational diseases and deaths are costly events. They are responsible for: 1) direct medical costs; 2) indirect costs, resulting from lost production, foregone opportunities, and diminished investment; and 3) non-economic costs, including pain and suffering, disrupted careers, and devastated families. To develop a partial estimate of the total costs of occupational disease in New York State, we have examined four categories of illness: occupational cancer, chronic respiratory disease and the pneumoconioses, cerebrovascular and cardiovascular disease, and end-stage renal failure. We base our partial estimate on the human capital approach to the costs of these illnesses. Using the best measures available, including both incidence and prevalence statistics, mortality records, and a variety of financial data, we employ two cost accounting techniques of the human capital approach, the incidence method, and the prevalence method. Our analysis shows that these four occupational illnesses are costing New York over $600 million per year. This figure is a pragmatic but conservative, lower-bound estimate of the relative magnitude of total economic costs of occupational disease in New York State. The largest proportion of these costs (80%) is due to occupational cancer. The failure of the health care system to recognize the costs of occupational disease precludes recognition of the economic benefits which would result from preventing these illnesses. This study, it is hoped, will stimulate advances in epidemiological and economic approaches to resolve this important measurement problem.