The social cost of chronic health conditions and their potential for rehabilitation towards an aging population

The social cost of chronic health conditions and their potential for rehabilitation towards an aging population Cumulative thesis submitted for the degree of Ph.D. in Health Sciences at the Faculty of Healht Sciences and Medicine University of Lucerne Included Papers in the Cumulative Thesis Paper 1 Excess healthcare utilization and costs linked to chronic conditions. European Journal of Public Health. Status: Published. Available at: https://doi.org/10.1093/eurpub/ckaf012 Paper 2 Chronic health conditions and their impact on the labor market. A cross-country comparison in Europe. Journal of Social Sciences and Medicine. Status: Published Available at: https://doi.org/10.1016/j.ssmph.2024.101666 Paper 3 Effective and efficient rehabilitation. What works best for persons with SCI during (sub)acute phase of rehabilitation? Status: Submitted Available at: https://doi.org/10.1016/j.arrct.2025.100532 Submitted by Boris Santiago Polanco Jacome 16-104-622 Supervisors Prof. Diana Pacheco Barzallo Prof. Adrian Martinez de la Torre Lucerne, 2025 DOI: 10.5281/zenodo.17199873 Acknowledgements I find this section the perfect place to reflect on the journey I have had while working on this thesis and to thank all the people who supported me along the way. I am extremely grateful for the support of all the co-authors of the papers included in this thesis. Their feedback provided helped me to shape the ideas presented in these studies.1 I would like to thank also to the Velux Foundation 2for supporting this research. Their contribution enabled me to deepen my understanding of health and aging. Special thanks to Swiss Paraplegic Research for hosting me and giving me access to their excellent facilities. This institution is a world leader in spinal cord injury research and I feel fortunate to have been a part of it. I am also very grateful to my supervisor, Prof. Diana Pacheco, she has been really supportive in all the stages of this research. I think that in some way I can understand much better economy and also this journey has triggered new ideas for future potential projects. I feel also really glad of have been working in the Health Economics Group at Swiss Paraplegic Research. Big thanks for the group. Even though we are a new and small group, we are doing and important progress preparing the ground and constructing the foundations of health economics in SPZ3. I am also deeply grateful for the friendships I formed here, especially with my Ph.D 1A very special thanks to my co-authors: Prof. Diana Pacheco Barzallo, Prof. Carla Sabariego, Prof. Armin Gemperli, Dr. Inge Eriks-Hoogland, Dr. Anke Scheel-Sailer, MSc Stefan Metzger, and Dr. Ana Ona. 2https://veluxstiftung.ch/projects/new-perspectives-for-healthy-ageing/ 3Members of the Health Economics Group: Prof. Diana Pacheco Barzalo, Dr. Ana Ona, and my colleagues Stefan Metzger and Nga Chau My Ha 1 colleagues in the PhD room in Nottwil. It has been incredibly enriching to share this experience with people of different academic backgrounds and nationalities. Having such diverse and inspiring colleagues has made this journey very special. I also thank the Professor Stefan Boes and Dr. Michael Havranek for giving me the opportunity to work on a real-world project. That experience allowed me to explore new topics, better understand how research is applied in practical settings, and grow significantly in my professional development. Before mentioning my personal growth, I sincerely thank all the professors involved in the PhD program and evaluations. Your guidance, feedback and support played a key role in helping me complete this thesis and shape my academic path. I must also thank my family, who have always encouraged my curiosity and supported me in pushing my limits to achieve my academic goals. Switzerland has given me more than just academic growth, it introduced me to wonderful people who have shaped my life. I want to thank my friends from the Zug jazz band, with whom I have been playing almost every weekend for more than three years. They’ve helped me understand, in a very personal way, what healthy aging means through their passion, discipline, and love for music. I will forever carry with me my passion for drumming. 2 Chapter 1 Introduction Background and Motivation The population aging imposes several challenges and opportunities for the organization of health and social systems. As people live longer and often in better health, they can remain active in the workforce and contribute to society beyond traditional retirement ages [1]. However, at the same time, this demographic shift is also characterized by a rising prevalence of chronic conditions, which is currently the leading cause of disability [2]. Globally, chronic conditions such as ischemic heart disease, stroke, and chronic obstructive pulmonary disease (COPD) are not only the main causes of death, but also the drivers of disability adjusted years (DALYs) worldwide [3, 4, 5]. Extensive literature exists studying how specific chronic conditions impact individuals, as well as the effects on the costs for the healthcare system. [6, 7]. However, their economic burden extends beyond that due to its long-term nature. In fact, chronic conditions reduce the intrinsic capacity of people with important implications for their activity and participation, being the most worrisome the effects in the labor market. Several studies have shown how people with chronic conditions have higher rates of absenteeism [8], increasing demand for disability benefits or early retirement [9]. In addition, chronic conditions are associated with higher levels of healthcare utilization. These results are particularly pronounced among vulnerable populations, where poverty, limited education, 3 and restricted access to care can exacerbate adverse health and economic outcomes [10]. To quantify these impacts, the literature has commonly adopted the cost-of-illness (COI) approach, which considers direct and indirect costs [11]. Direct costs are related to the treatment of the chronic condition, which includes costs such as hospitalization and medical care. Indirect costs arise from the effects of the chronic disease, and include productivity losses, dependence on others, among others. Several studies have estimated these costs for specific conditions including diabetes [12], stroke [13], chronic obstructive pulmonary disease (COPD) [14], arthritis [15], mental health disorders [16], kidney disease [17], and cancer [18]. Despite this growing attention, existing studies mostly offer condition specific results, mostly describing correlations, which limits to capture the cumulative effects of chronic conditions. This fragmented effect makes it harder to develop clear and effective public policies that deal with chronic conditions in a comprehensive and lasting way. Moreover, few studies explore potential solutions from the health system perspective, such as preventive or rehabilitative care, to mitigate the effects of these conditions [19]. While prevention is a long-term goal, it does not address the existing and growing population already living with chronic conditions. For this group, the sole health strategy that targets people’s functioning is rehabilitation[20]. Rehabilitation, defined as the set of interventions designed to optimize functioning and reduce disability, can help people with chronic conditions to remain independent for as long as possible, with important implications for society. This thesis aims to close this gap and contributes to the literature by providing a comprehensive assessment of the economic burden of chronic conditions in 9 European countries. It focuses on both direct and indirect costs and explores the underused but promising role of rehabilitation. Specifically, it estimates the impact of chronic conditions on healthcare utilization (direct costs) and labor market participation (indirect costs), and it evaluates the effectiveness and efficiency of rehabilitation using an extreme case of disability, like spinal cord injury (SCI) as a case study. In addition, this thesis implements an innovative methodological framework, using 4 causal inference for panel data. We apply difference-in-differences models with multiple time periods to study how the diagnosis of a chronic condition impacts the utilization of healthcare services and the productivity of individuals. I combine these estimates with unit costs of healthcare services (WHO-CHOICE) and concepts from insurance mathematics to quantify the healthcare cost burden. Finally, using real world data, I show how rehabilitation can be an effective strategy to improve independence measures of patients with high level of disability. 1.1 Research Objectives and Structure The objective of this thesis is to quantify the effect of chronic conditions on healthcare costs and the labor market. Also, to evaluate the effectiveness and efficiency of rehabilitation in keeping people independent. This is achieved through the following studies: •Study 1: Chronic conditions and their impact on healthcare utilization and costs. Aim: To estimate the additional use of health services due to chronic conditions and its cost. •Study 2: Chronic conditions and their impact in the labor market. Aim: To estimate the productivity losses due to chronic conditions, assessing their impact on the participation and economic burden in the labor market. •Study 3: Efficiency and effectiveness of rehabilitation for persons with spinal cord injury (SCI). Aim: To estimate how rehabilitation improves functional independence of persons with paraplegia/tetraplegia. 1.2 Data Sources and Methodological Approach This thesis is fed with data from several sources. First, it analyzed data from the Survey on Health, Aging and Retirement in Europe (SHARE)[21]. SHARE is a longitudinal 5 data set that covers European countries. The data contain information on health conditions, utilization of healthcare care services, and socioeconomic factors in people 50+ years of age. Second, I use the WHO-CHOICE data set. This program, developed by the World Health Organization (WHO), provides evidence on the unit costs of inpatient and outpatient care at country level . Finally, for the third study, in which we analyze the role of rehabilitation and disability, we have considered routine clinical data from patients with SCI who received rehabilitation from Swiss Paraplegic Center, one of the four specialized SCI rehabilitation centers in Switzerland. To analyze the effect of chronic conditions on productivity and use of healthcare services, we consider the potential outcomes framework [22],[23] (Rubin’s causal model). This framework identifies causal effects by comparing the outcomes that an individual would experience with and without a treatment, which in the case of this thesis is the diagnosis of a chronic condition. For each individual in the survey, we have two potential outcomes, but only one is observed. Causal inference then involves estimating the missing counterfactual using a synthetic control group. The outcomes analyzed were the number of working hours in the last week (Study 1) and the number of doctor visits and overnight hospital stays (Study 2). To estimate causal effects in this setting, I implemented the Callaway and Sant’Anna difference in difference estimator [24], which is specifically designed for multiple time periods with the adoption of staggered treatment. This approach allows to make comparisons between treated and untreated individuals over time, providing estimates of the average effect of treatment. For the last study, I employed generalized additive models (GAMs) to estimate the effectiveness and efficiency of specialized rehabilitation. The outcome measured in this model, was the independence metric (SCIM III), which is a standard measure collected in clinical settings. GAMs account for the nonlinear relationship between rehabilitation and functional independence, particularly with respect to length of stay and costs. This modeling choice was supported by related evidence on the nonlinear association between healthcare spending and health outcomes, which typically relies on aggregate health ex6 penditure data [25]. In contrast, our study focused on spinal cord injury (SCI), a condition that, due to its complexity and intensive resource needs, serves as a tracer condition to evaluate the performance of health systems [26]. SCI becomes highly relevant not only because of its profound and life-changing impact on individuals, but also because it involves an initial period of acute hospitalization followed by a lengthy process of rehabilitation and adaptation to a new way of life [27]. Importantly, SCI care requires a broad range of health services across sectors, offering valuable insights into the functioning of the healthcare system. In this study, we focus on Switzerland, as it provides detailed individual-level data on rehabilitation and service use, which aligns with the overall objectives of the thesis. 7 Chapter 2 Excess Healthcare Utilization and Costs DOI https://doi.org/10.1093/eurpub/ckaf012 8 context, a good understanding of rehabilitation effectiveness and efficiency is essential. Future simulations could test different scenarios of these metrics,for example, increasing or decreasing rehabilitation resources to see how these changes would affect patient outcomes and the financial pressure on insurance systems. This could help policymakers to plan how to invest in rehabilitation as a way to reduce the long-term impact of chronic diseases. 5.3 Conclusion In conclusion, this thesis shows that chronic diseases have important economic consequences, both for individuals and health systems. People with chronic diseases use more healthcare services and face productivity losses, especially in the labor market. At the same time, the results show that rehabilitation can play a key role in helping people recover their independence. This is important not only for their health, but also because it can reduce future healthcare use and productivity losses. Investing in rehabilitation should be seen as part of the strategy to manage the economic impact of chronic conditions. This thesis is one of the few studies to provide country level causal estimates on the economic impact of chronic diseases, including both healthcare utilization and productivity losses. These findings are very important evidence to support the design of policy interventions tailored to the specific characteristics of each country’s health and social systems. 15 Bibliography [1] B Franklin. “Towards a longevity dividend: Life expectancy and productivity across developed countries”. In: International Longevity Centre, United Kingdom, London (2018). [2] Xiaodong Sun and Xuan Li. Aging and chronic disease: public health challenge and education reform. 2023. [3] World Health Organization. The top 10 causes of death. 2023. url:https://www. who.int/newsroom/factsheets/detail/thetop10causesofdeath (visited on 06/12/2025). [4] Karen Hacker. “The burden of chronic disease”. In: Mayo Clinic Proceedings: Innovations, Quality & Outcomes 8.1 (2024), pp. 112–119. 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