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The direct cost of care for psoriasis and psoriatic arthritis in the United States
The direct cost of care for psoriasis and psoriatic arthritis in the United States Harold S. Javitz, PhD,a Marcia M. Ward, PhD,b Eugene Farber, MD,c† Lexie Nail, PhD,d and Susan Gillis Vallow, RPh, MBAe Menlo Park and Palo Alto, California; Iowa City, Iowa; and Collegeville, Pennsylvania Background: Relatively little information is available in the literature concerning the cost of psoriasis in the United States, and much of that information is out of date. Objective: The present analyses estimate the direct cost of medical care for psoriasis (including psoriatic arthritis) from a societal perspective among adults in the United States. Method and Data: The costs of hospitalizations, outpatient and physician office visits, prescription and over-the-counter (OTC) medications, and medical procedures were estimated from the literature, analysis of publicly available health databases (Health and Nutrition Examination Survey, National Hospital Discharge Survey, Medicare Public Use Files, National Ambulatory Medical Care Survey, and the National Hospital Ambulatory Medical Care Survey), and analysis of privately available health databases (United Health Care/Diversified Pharmaceutical Services, the Medstat Group diagnosis-related group guide, and the National Disease and Therapeutic Index). Costs were expressed as of 1997 by using Medicare and health maintenance organization reimbursement rates and wholesale drug costs. Costs of OTC medications were derived by adjusting a previous estimate in the literature for inflation in over-the-counter drugs and population increases. Results: The cost of illness for the approximately 1.4 million individuals with clinically significant disease is substantial—approximately $30.5 million for hospitalizations, $86.6 million for outpatient physician visits, $27.4 million for photochemotherapy, $147.9 million for dermatologic prescription drugs, and $357.2 million for OTC drugs, for a total direct cost of $649.6 million. Conclusion: Cost estimates from this study are substantially less than those found in previous studies ($1.09 billion and $4.32 billion after adjustment of estimates in the literature for medical inflation and population increases). This appears to be principally a result of decreases in hospitalization rates since 1979 and the valuation methodology per unit of medical services (with prior studies using “list” prices and the current study using reimbursement rates). (J Am Acad Dermatol 2002;46:850-60.)
T
here have been relatively few published reports of the cost of treating psoriasis in the general population (as contrasted with reports describing the costs of various regimens for treatment of periodic flare-ups of the disease). An-
From the Center for Health Sciences, SRI International, Menlo Park,a the Department of Health Management and Policy, University of Iowa,b Psoriasis Research Center, Palo Alto, c Stanford University, Palo Alto,d and SmithKline Beecham, Collegeville.e † Deceased. Funding sources: A grant from SmithKline Beecham. Conflict of interest: None. Accepted for publication July 3, 2001. Reprint requests: Harold S. Javitz, PhD, Center for Health Sciences, SRI International, 333 Ravenswood Ave, Menlo Park, CA 94025. Copyright © 2002 by the American Academy of Dermatology, Inc. 0190-9622/2002/$35.00 ⫹ 0 16/1/119669 doi:10.1067/mjd.2002.119669
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nual direct costs for treating psoriasis have been published only twice. A report by Kraning and Odland1 for the Society for Investigative Dermatology calculated the annual cost of psoriasis at $248 million. Krueger et al2 calculated the combined cost of hospitalization and outpatient therapy at $1.63 billion. If these figures were adjusted for medical inflation and increases in the number of individuals with clinically significant psoriasis (since 1978 and 1983, respectively, to 1997), these estimates would be $1.09 billion and $4.32 billion, respectively, in 1997 dollars. These revised estimates are shown in Table I by component of medical care. As seen in Table I, there are considerable discrepancies between these 2 sources, with total costs varying by a factor of 4. Because of a lack of detail concerning the methods for calculating costs in both reports, it is difficult to reconcile these differences.
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Abbreviations used: CPI: CPT: DRG: HANES I:
Consumer Price Index Current Procedural Terminology diagnosis-related group Health and Nutrition Examination Survey of 1971-1974 HMO: health maintenance organization ICD-9: International Classification of Diseases, 9th Revision NAMCS: National Ambulatory Medical Care Survey NHAMCS-OV: National Hospital Ambulatory Medical Care Survey–Outpatient Visit NDTI: National Disease and Therapeutic Index NHDS: National Hospital Discharge Survey OTC: over-the counter PSA: psoriatic arthropathy UHC/DPS: United Health Care/Diversified Pharmaceutical Services
In addition, there have been substantial changes in the treatment of this disease since these studies were published. The current study was developed to update the cost estimates by using publicly and privately available databases and a clearly specified methodology for estimating prevalence and unit costs. Accurate estimates of the direct cost of care of psoriasis are necessary if health providers, pharmaceutical companies, and public agencies such as the National Institutes of Health are to justify and provide resources necessary for further study of the epidemiology and etiology of this disease and to develop and deploy better treatments.
METHODOLOGY Definition of psoriasis Two International Classification of Diseases, 9th Revision (ICD-9) codes were used to identify services associated with treatment of patients with psoriasis: (1) 696.0 for psoriatic arthropathy (PSA) and (2) 696.1 for other types of psoriasis (including plaque, guttate, pustular, and erythrodermic). There is considerable controversy in the literature concerning whether PSA is a distinct disease or simply a form of rheumatoid arthritis occurring in patients with psoriasis. Regardless, PSA was included in the cost-of-illness study because its incidence is so much higher in patients with psoriasis than rheumatoid arthritis is in the general population, suggesting at least a common etiology and because some systemic medications (eg, methotrexate) are used in the treatment of both PSA and other types of psoriasis. However, when possible, the costs associated with the 2 different ICD-9 codes were calculated separately.
Table I. Published estimates of total US costs for psoriasis updated to 1997
Component of care
Hospitalization Outpatient physician visits Photochemotherapy Dermatologic drugs OTC drugs Total
Kraning and Odland,1 1979 ($000s)
Krueger et al,2 1984 ($000s)
$178.5 $247.9
$279.0 $4,042.0
$74.4 $233.1 $357.2 $1,091.1
$4,321.1
Disease prevalence Estimates of the prevalence rates of psoriasis were based on the Health and Nutrition Examination Survey of 1971-1974 (HANES I).3 This study was conducted by the National Center for Health Statistics to estimate the prevalence of various types of skin disease, including those dermatologic conditions about which the individual expresses concern, among the US noninstitutionalized population aged 1 to 74 years. Health data were collected by direct physical examinations of 20,749 individuals and therefore could provide information on previously unrecognized or undiagnosed conditions. Dermatologists were trained in the examination methodology to minimize interobserver variation. The dermatologists evaluating the prevalence of psoriasis classified each case as being a significant skin disease or nonsignificant, and, if significant, as active or in remission. In addition, patients classified their psoriasis as being of concern or not. The age- and sex-specific prevalence estimates of HANES I for various classifications of psoriasis (eg, clinically significant psoriasis, clinically significant psoriasis that is currently active, and clinically significant psoriasis that is in remission) were applied to estimates from the US Bureau of the Census4 of the number of adult US residents by age and sex in 1997 to obtain estimates of the prevalence of psoriasis by age and sex in 1997. These estimates were summed over age and sex to obtain estimates of the total number of adult US residents with various classifications of psoriasis. In performing these extrapolations, sex-specific prevalence rates for individuals aged 75 years and older (which were not calculated in HANES I) were set equal to the sexspecific prevalence rates for individuals aged 65 to 74 years.
COST COMPONENTS AND COSTING METHODOLOGY In the determination and attribution of relevant costs to psoriasis, a limited societal perspective was
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Table II. Sources of prevalence and medical care utilization data Type of cost
Prevalence Hospitalization Inpatient physician services Outpatient/physician office visits and procedures Prescription medication
Database
1971-1974 HANES I, 1993-1995 UHC/DPS database 1990 NHDS, 1993 Medicare Part A Hospitalizations, 1993-1995 UHC/DPS database 1993 Medicare Part A Inpatient Physician Services, 1993-1995 UHC/DPS database 1991 and 1993 NAMCS, 1992 and 1993 NHAMCS-OV, 1993 Medicare Part B Outpatient Physician Services, 1993-1995 UHC/DPS database 1996 National Disease Therapeutic Index, 1993-1995 UHC/DPS database
adopted with consideration of all direct medical costs. Indirect and intangible costs related to psoriasis are not valued in this cost-of-illness analysis. Direct medical costs are separated into the following primary components of care: hospitalization, inpatient physician services, outpatient physician visits, and prescription medications. The cost of over-thecounter (OTC) medications was estimated by updating a previous estimate in the literature to reflect changes in the number of patients with psoriasis and changes in the consumer price index (CPI) OTC drug index (series SEMB).5 Emergency department services, diagnostic radiology and laboratory services, and nursing home or home health care services were not evaluated because such costs are believed to be relatively small. Medicare reimbursement rates were applied as fee structures for valuing the services used in the public databases; managed care reimbursement rates were applied as fee structures for valuing the services used in the managed care database. The word payment or cost refers to this fee structure and the term annual cost is the product of this payment multiplied by the annual use. Estimates of annual medical resource use and costs related to psoriasis apply to the US population in 1997 and are expressed in 1997 dollars. All costs obtained before 1997 (other than OTC medications) were inflated by using the CPI medical care index (series SAM). Data sources for utilization The approach to determining medical resource utilization was to identify psoriasis-related records in multiple data sources, including national medical care utilization surveys and a managed care database. Data sources used to determine each component of medical care utilization are listed in Table II. All Medicare data are from the 5% public use files.6 The United Health Care/Diversified Pharmaceutical Services Database The United Health Care/Diversified Pharmaceutical Services (UHC/DPS) database (UHC/DPS data were made available by SmithKline Beecham, Collegeville, Pa) comprises patients from 4 geographi-
cally diverse Independent Physician Association model health maintenance organizations during the 3-year period starting on January 1, 1993. During this period, the insured population who were members for at least 12 months totaled 207,759 females and 200,088 males. The database available to this study consisted of patients who had 1 year of continuous plan membership after January 1, 1993, and had at least 2 claims for psoriasis or one claim for psoriasis and one claim for a drug or phototherapy associated with a diagnosis of psoriasis in the 3-year study period. (Thus, the UHC/DPS data does not include psoriasis costs associated with patients who have only one claim for psoriasis during the study period.) The eligible population with psoriasis consisted of 1284 adult females and 1322 adult males, who were eligible for services for an average of 1.8 years during the study period. Approximately 36% of these individuals had a diagnosis of another dermatologic disorder during the study period; the remaining 64% only had a dermatologic diagnosis of psoriasis. A comparison with the incidence rate from HANES I was obtained by calculating the prevalence from the UHC/DPS database. By dividing the number of individuals with psoriasis in a sex and age category by the number of eligible individuals in the HMO population, an approximation of the prevalence of psoriasis in the HMO was obtained. We note that although the study period was 3 years in duration, because of movement in and out of the plan, the average duration of eligibility for the more than 400,000 members with at least 12 months of eligibility sometime during the 3-year period was only 1.8 years. Consequently, the prevalence rate for the HMO is approximately equal to the percentage of patients who would have two claims for psoriasis over slightly less than a 2-year period. The HMO prevalence rate was not used in any further computations. Hospitalizations Hospitalization costs were estimated from 3 databases: (1) the 1990 National Hospital Discharge Survey
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(NHDS),7 (2) the 1993 Medicare Part A Public Use Files, and (3) the 1993-1995 UHC/DPS database. Data from the NHDS were used to estimate the number of hospitalizations in 1990 with a principal diagnosis of psoriasis for patients aged 64 years and younger. The number of hospitalizations was increased to reflect the increase in the number of adult residents with psoriasis between 1990 and 1997. (This calculation will overestimate the number of hospitalizations in 1997 to the extent to which the hospitalization rate declined between 1990 and 1997.) Hospital reimbursements were estimated by applying 1997 Medicare reimbursement rates. In addition, Medicare pays separately for inpatient physician fees. The 1993 Medicare Part A and B Public Use Files were analyzed to determine the ratio (by using 1993 reimbursement rates) of physician inpatient service reimbursements to hospital reimbursements for each specific DRG. These percentages were applied to the 1997 Medicare reimbursements for hospitalizations by DRG to obtain an estimate of physician inpatient service reimbursement. Hospital and physician inpatient reimbursements were summed to obtain an estimate of total reimbursement. Hospitalizations with a primary diagnosis of psoriasis for Medicare Part A recipients aged 65 and older were estimated from the 1993 Medicare Part A Public Use Files. The number of hospitalizations was increased to reflect this increase in the number of individuals aged 65 and older with psoriasis from 1993 to 1997. Hospital reimbursements were estimated by applying 1997 Medicare reimbursement rates. Medicare reimbursements for inpatient physician fees were calculated by increasing the hospital reimbursements by a DRG-specific percentage, representing the ratio of 1993 inpatient physician fees to 1993 hospital reimbursements. The reimbursements for hospitalizations from Medicare were compared with private sector reimbursements as reported by the Medstat Group8 for a population of approximately 7 million individuals whose health benefits were sponsored by nearly 100 large employers. Health plans represented in the database include preferred provider organizations and point of service and indemnity plans. The cost per hospitalization was defined as all payments to all providers for services rendered during an admission, including fees for hospital room and board, operating room, surgeon, attending physician, laboratory, and other services. The data do not include worker’s compensation claims by Medicare or Medicaid beneficiaries. Rates were obtained for 2000 and were deflated by using the CPI Medical Care Index to 1997.
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The data from the UHC/DPS database were used to calculate the total costs (by using the managed care reimbursement rates during 1993 to 1995) for hospitalizations of 2 days or greater duration for 8 categories of adults defined by age and sex. Costs were then inflated by using the CPI medical care index. Total costs in each category were divided by the number of person-years of coverage of individuals with psoriasis in the category (obtained from UHC/DPS enrollment data) to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I prevalence rates multiplied by 1997 US Census Bureau population estimates) in the age and sex category, and then summed across category, to obtain an estimate of the total cost of hospitalizations in the United States in 1997. Outpatient and physician office visits Outpatient and physician office visits were estimated from 4 databases: (1) the 1991 and 1993 National Ambulatory Medical Care Survey (NAMCS),7 (2) the 1992 and 1993 National Hospital Ambulatory Medical Care Survey–Outpatient Visit component (NHAMCS-OV),7 (3) the 1993 Medicare Part B Public Use Files, and (4) the 1993-1995 UHC/ DPS database. The average yearly number of physician office visits for patients aged 64 years and younger with a primary diagnosis of psoriasis were estimated from the 1991 and 1993 NAMCS data sets. These values were multiplied by the growth in the number of patients with psoriasis in the US resident adult population to take into account the increase in population from 1992 to 1997. Office procedures were valued by using 1997 Medicare reimbursement rates based on the CPT procedural code, the length of the office visit, and whether the patient was new or established. The average yearly number of hospital-based physician outpatient visits for patients aged 64 years and younger with a primary diagnosis of psoriasis were estimated from the 1992 and 1993 NHAMCS-OV data sets. These values were multiplied by the growth in the number of patients with psoriasis in the US resident adult population to take into account the increase in population from 19921993 to 1997. Records in NHAMCS-OV do not contain information on the duration of each outpatient visit, and therefore the Medicare-equivalent average reimbursement per visit cannot be directly calculated. Instead, the average Medicare reimbursement per visit was calculated from NAMCS (which contains the number of minutes for each appointment)
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separately for new and established patients and for PSA and other types of psoriasis as the principal diagnosis, and these reimbursement values were applied to NHAMCS-OV visits. The number of yearly outpatient and physician office visits for individuals aged 65 and older was estimated from the 1993 Medicare Part B Public Use Files. The number of visits was increased to reflect the growth in the number of adults aged 65 and older with psoriasis from 1993 to 1997. These visits were valued by using 1997 Medicare reimbursement rates. The data from the UHC/DPS database were used to calculate the total number and costs (by using the managed care reimbursement rates during 1993 to 1995) for outpatient and office visits for 8 categories of adults defined by age and sex. Total costs in each category were divided by the number of personyears of coverage of individuals with psoriasis in the category to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I) in the age and sex category, and then summed across categories, to obtain an estimate of the total cost of office visits in the United States in 1997.
wholesale cost per treatment day, and total costs per year for medications prescribed for patients with a diagnosis of psoriasis were obtained. The UHC/DPS database was used to calculate the total prescription medication use and costs. Psoriasis medications included antineoplastic agents and immunosuppressant medications, glucocorticoids, topical corticosteroids, antipruritic drugs, topical antifungal drugs, antipsoriasis and antieczema drugs, and selected other dermatologic preparations and compounded prescriptions. A particular prescription for medication on this list was attributed to psoriasis if it was filled within a week of a visit during which a diagnosis of psoriasis was made. Total costs for medications were obtained in 8 categories of adults defined by age and sex. Total managed care costs in each patient group were divided by an estimate of the number of person-years of coverage of individuals with psoriasis in each patient group to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I) in each age and sex category, and then summed across categories, to obtain an estimate of the total cost of psoriasis prescription medications in the United States in 1997.
Outpatient and office procedures Outpatient and procedures associated with office visits with a primary diagnosis of psoriasis were estimated from 4 databases: (1) the 1991 and 1993 NAMCS, (2) the 1992 and 1993 NHAMCS-OV, (3) the 1993 Medicare Part B Public Use Files, and (4) the 1993-1995 UHC/DPS database. The calculation methodology was essentially the same as that used to calculate outpatient and office visit costs. In the UHC/DPS database, only procedures for actinotherapy (Current Procedural Terminology [CPT] 96900), ultraviolet B light therapy (CPT 96910), psoralen ultraviolet A-range light therapy (CPT 96912), extensive duration photochemotherapy (CPT 96913), and unlisted special dermatologic procedures (CPT 96999) were tabulated.
OTC medications The cost of OTC medications was determined by increasing a prior estimate by Kraning and Odland1 to reflect OTC inflation and increases in the number of individuals with clinically significant psoriasis from 1979 through 1997.
Prescription medications Prescription medication use was estimated from two data sources: (1) 1996-1996 National Disease and Therapeutic Index (NDTI) (IMS America, Plymouth Meeting, Pa) and (2) the 1993-1996 UHC/DPS database. Data on prescription medication sales covering the period from the third quarter of 1995 through the third quarter of 1996 were obtained from the NDTI, a private service that compiles prescription information from a panel of approximately 3000 officebased physicians. The treatment days per year,
RESULTS Prevalence of psoriasis Disease point prevalence, as derived from the psoriasis rates in HANES I and US Bureau of Census data on the US resident population in 1997, is shown in Table III. Table IV shows the comparison of prevalence rates derived from the UHC/DPS medical study and the HANES I rates. The HMO prevalence rates are generally larger than the HANES I prevalence rates and substantially larger for 3 of the age categories for women (18-30 years, 51-65 years, and 66 years and older) and one of the age categories for men (31-50 years). If the prevalence rate among these HMO members is extrapolated to the US population, we obtain an estimate that there are 2,089,000 individuals who would receive treatment for psoriasis (at least 2 physician visits or one visit and one medication or procedure) within a 1.8-year period. This is greater than the HANES I point prevalence of 1,437,000 with clinically significant psoriasis (of
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Table III. Summary of number of adults with psoriasis in 1997 (derived from HANES I prevalence rates)
Type of condition
Table IV. Comparison of psoriasis prevalence rates in an HMO and in HANES I
Percent of US adult No. in 1997 population
Clinically significant psoriasis 1,437,000 Clinically significant psoriasis, 905,000 currently active Clinically significant psoriasis, in 532,000 remission Not clinically significant 900,000 Total clinically significant and 2,337,000 nonsignificant All psoriasis over which respondent 936,000 has expressed concern
0.73 0.46 0.27 0.46 1.18 0.47
which only 905,000 is currently active) or the HANES I point prevalence of 936,000 persons who expressed “some concern” about their condition. This finding suggests one of the following: (1) the prevalence of psoriasis has been increasing in the United States since HANES I was conducted, (2) the HMO population had a larger proportion of patients with psoriasis than the general population, or (3) the vast majority of patients with clinically nonsignificant psoriasis or psoriasis that is in remission sought treatment for their condition even if they were not “concerned” about their condition. If the UHS/DPS prevalence rate is used, rather than the HANES I prevalence rate, then our estimates of national use derived from the UHS/DPS study would need to be multiplied by a factor of 1.45. Hospitalizations Hospitalization costs from the various data sources are shown in Table V. These data appear to be relatively consistent, with the total of the NHDS (age 18 to 64) and Medicare Part A (age 65 and older) valuations ($22.9 million) being relatively similar to the total from the managed care database ($30.1 million). Additional information concerning the hospitalizations was obtained from NHDS and Medicare Part A. Table VI shows the DRG classification, number of hospitalizations, cost per hospitalization, and total costs for all adult patients projected to 1997. Costing information for private sector hospitalizations obtained from the Medstat Group was compared with the Medicare reimbursements. Private sector reimbursement rates were not available for all DRGs but were obtained for DRGs representing 75% of admissions. For those DRGs, the private sector costs were higher by a factor of 2.0. Consequently, if
Sex and age category
Prevalence of psoriasis in an HMO (defined as having 2 claims for psoriasis during an average of 1.8 y)
Point prevalence of clinically significant psoriasis in HANES I
Male, 18-30 y Male, 31-50 y Male, 51-65 y Male, 66⫹ y Female, 18-30 y Female, 31-50 y Female, 51-65 y Female, 66⫹ y
0.50% 1.00% 1.35% 1.67% 0.59% 0.84% 1.30% 1.02%
0.41% 0.65% 1.39% 1.44% 0.29% 0.75% 0.84% 0.58%
Table V. Total annual hospitalization costs (including inpatient physician reimbursement) in 1997 by principal diagnosis Type of cost
PSA
Other psoriasis
Hospitalizations (age 18-64) $5,076,000 $11,329,000 from NHDS valued at Medicare rates* Hospitalizations (age 65⫹) from $2,142,000 $4,395,000 Medicare Part A valued at Medicare rates* $30,117,000 Hospitalization (all adult) from UHC/DPS, valued at HMO rates (combined PSA and other psoriasis) *For valuation at Medstat Group rates multiply costs by 2.0.
valued at private sector reimbursement rates, the hospitalizations for psoriasis in 1997 would cost approximately $45.8 million. Hospitalizations with a secondary diagnosis of psoriasis in the NHDS were also examined to determine whether psoriasis was an underlying cause or a complicating condition. Of 44 hospitalizations in the 1990 NHDS with a secondary diagnosis of psoriasis, in only one case was it reasonable to conclude that psoriasis was the underlying cause. The UHC/DPS database contained a total of 322 adult hospital days of a total of 4684 person-years of eligibility among adult patients with psoriasis. The age- and sex-specific hospital day utilization rates for the UHC/DPS database were multiplied by the estimated number of patients with clinically significant psoriasis in 1997 to obtain 103,852 hospital days. The total cost for these hospitalizations at HMO rates is $30.1 million. This value is comparable to the total of $22.9 million obtained from the total of the NHDS and Medicare Part A valued at Medicare
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Table VI. Cost of 1997 hospitalizations (including inpatient physician fees) for psoriasis from the 1990 NHDS (age 0-64) and the 1993 Medicare Public Use Files (age 65 and older)
DRG and principal diagnosis
Diagnosis of PSA 209 (Major joint re-attachment, lower extremity) 229 (Hand or wrist procedure) 231 (Removal of internal fixation device of hip and femur) 240 (Connective tissue disorders w/o CC) 241 (Connective tissue disorder w/CC) PSA subtotal Diagnosis of other psoriasis 269 (Other skin, subcutaneous, and breast procedures, with CC) 272 (Major skin disorder with CC) 273 (Major skin disorder without CC) Other psoriasis subtotal Total or average
Projected No. of hospital stays in 1997
Average payment per hospital stay in 1997
126 62 21 319 1,101 1,630
$11,845 $3,438 $6,622 $6,012 $3,136 $4,429
$1,492 $214 $139 $1,920 $3,452 $7,218
21 2,388 1,232 3,641 5,271
$8,076 $4,916 $3,096 $4,318 $4,353
$170 $11,738 $3,815 $15,723 $22,941
Total reimbursement in 1997 ($000)
Table VII. Total annual outpatient and office visit costs in 1997 by principal diagnosis Type of cost
Physician visits (age 18-64) from NAMCS and NHAMCS-OV Physician visits (age 65⫹) from Medicare Part B Physician visits (all adult) from UHC/DPS, valued at HMO rates (combined PSA and other psoriasis)
PSA
$1,551,000 $1,467,000
Other psoriasis
$124,434,000
$34,236,000 $11,520,000
Table VIII. Total annual outpatient and office visit costs in 1997 by principal diagnosis Principal diagnosis and age category
PSA, age 18 to 64 (from NAMCS and NHAMCS-OV) PSA, age 65⫹ (from Medicare Part B) Other psoriasis, age 18-64 (from NSMCS and NHAMCS-OV) Other psoriasis, age 65⫹ (from Medicare Part B)
reimbursement rates and the total of $45.8 million those hospitalizations would cost at private sector reimbursement rates. Outpatient and physician office visits Outpatient and physician office visit costs are shown in Table VII. The total results from NAMCS, NHAMCS-OV, and Medicare Part B are substantially smaller than estimates obtained from UHC/DPS. Further details concerning the number of visits by age group are shown in Table VIII. The annual number of visits in 1997 for PSA was estimated as 70,200, and reimbursements, at $3.0 million; the corresponding values for a diagnosis of other psoriasis were 1,426,000 visits and $45.8 million. Data
No. of annual visits in 1997 (in 000s)
Reimbursement for visits in 1997 (in $000s)
38.1 32.1 1,105.2 320.9
$1,551 $1,467 $34,236 $11,520
from NAMCS and NHAMCS-OV for patients aged 18 to 64 show that the majority (58%) of the visits with a principal diagnosis of PSA were to rheumatologists with the remaining visits going to “specialists” other than dermatologists and that almost all of the visits (94%) with a principal diagnosis of other psoriasis were to dermatologists. The numbers of visits to family or general practitioners and internists were very small (less than 3% of the total). Possible explanations include undercoding of psoriasis by nondermatologists. In the UHC/DPS database, the average number of visits per patient-year was 2.5. The UHC/DPS cost per visit was very similar to the 1997 average Medicare reimbursement for the NAMCS and
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Table IX. Total annual outpatient and office procedure costs in 1997 Type of cost
Procedures (age 18 to 64) from NAMCS and NHAMCS-OV Procedures (age 65⫹) from Medicare Part B Procedures (all age categories) from UNC/DPS, valued at HMO rates
PSA
Other psoriasis
$0 $1,323,000
$5,935,000 $11,102,000
$36,361,000
NHAMCS-OV visits. Projected nationally with HANES I prevalence rates, the UHC/DPS physician visit rate extrapolated to 3.640 million physician outpatient and office visits at an annual cost of $124.4 million.
because of the costing methodology (NDTI costs tend to approximate the cost for the purchase of the medication by wholesalers; managed care institutions typically value medications at their direct costs plus pharmacy operating costs).
Outpatient and office procedures Outpatient and office procedure costs are shown in Table IX. Total costs from NAMCs, NHAMCS-OV, and Medicare Part B are substantially less than the extrapolated results from UHC/DPS. For the population of all adults in 1997, NAMCS and NHAMCS-OV projected a total of 372,572 actinotherapy procedures for psoriasis (valued at $5.168 million) and 102,519 procedures for psoriasis involving local excision of skin and subcutaneous tissue (valued at $3.076 million). In addition, there were approximately 95,000 “other miscellaneous procedures” (ICD-9-CM 99.99) and 9000 “other nonoperative measurements and examinations” (ICD-9-CM 89.24) for which the procedure descriptions were too vague to allow costing. For the population of adults aged 65 and older in 1997, Medicare Part B projected a total of 49,868 procedures for PSA (valued at $1.323 million) and 504,462 procedures for other psoriasis (valued at $11.102 million). Most of the procedures for PSA were associated with blood or urine testing, methotrexate sodium injections, and injection or draining of a joint. Most of the procedures for other psoriasis were associated with ultraviolet light therapy (266,000 procedures valued at $5.387 million), injection into skin lesions, skin lesion biopsy, destruction of benign or premalignant lesions, tissue examination by a pathologist, office consultations, and radiation therapy. For the population of all adults in 1997, the UHC/ DPS data projected to a total of 1.489 million procedures, the vast majority of which were ultraviolet B or psoralen ultraviolet A-range light therapy (50% and 41%, respectively). More than 75% of these procedures were provided by dermatologists.
OTC medications Kraning and Odland’s estimate1 of $100 million in OTC medication use in 1979 was adjusted to $357.2 million to reflect population and OTC inflation.
Prescription medications Prescription medication costs for PSA and other psoriasis in 1997 were estimated as $130.560 million from NDTI and $165.329 million from UHC/DPS. The NDTI costs may be less than the UHC/DPS costs
DISCUSSION Among the adult US population in 1997, the prevalence of clinically significant psoriasis from HANES I was 0.73% and the prevalence of all psoriasis was 1.18%. The prevalence of patients with two or more treatments for psoriasis in the last 1.8 years from UHC/DPS data is 1.06%, which appears to be generally consistent with data from HANES I. Estimates on the prevalence of psoriasis in the literature range from 0.5% to 4.6%,9 with most estimates in the range of 1.0% to 2.0%.10,11 Koo12 conducted a survey of 50,000 households in 1991 to obtain information on the prevalence of psoriasis by using patient selfreports. On the basis of responses, he estimated that the prevalence of psoriasis was 2.6% of the US population. The reported response rate for the portions of the survey that were needed to estimate the prevalence of psoriasis was 45%, which, together with self-reporting of symptoms (which presumably would have been of greater interest to individuals with psoriasis), raises some concerns about possible upward biases in his prevalence estimate. However, if his estimate were correct, our estimates of treatment costs derived from the UHC/DPS study (which were projected by using the HANES I prevalence rates) would need to be increased by a factor of 2.2. Our estimates of costs based on NAMCS, NAMCSOV, NHDS, Medicare parts A and B, and NDTI would not be affected because each of these data sources provides an estimate of total costs for diagnoses of psoriasis independently of HANES I. A summary of the cost estimates in two previous studies1,2 (adjusted for increases in population and medical inflation indices) and this study appears in Table X. The combined estimates are the average of our public and private sector database estimates,
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Table X. Comparison of direct cost estimates (adjusted for population increase and medical care inflation to 1997)
Kraning and Odland,1 1979 ($000s)
Hospitalization Outpatient physician visits Photochemotherapy Dermatologic prescription drugs OTC drugs Total
$178.5 $247.9 $74.4 $233.1 $357.2 $1091.1
except for prescription medications (which were only available from our private sector databases) and OTC medications (which were obtained from the literature). Hospitalization costs found in the current study ($22.9 million from the public databases valued at Medicare rates and $45.8 million valued at Medstat Group rates, and $30.1 million from the UHC/DPS database) are substantially less than the costs extrapolated from the studies by Kraning and Odland1 and Krueger et al2 ($178.5 million and $279.6 million, respectively). Some of this discrepancy appears to be due to the fact that hospitalization days have decreased substantially in the last decade as day treatment centers and new medications were used to treat patients who were previously hospitalized. Kraning and Odland1 estimate that there were 180,000 hospitalization days in 1979 and Krueger et al2 estimate that there were 210,000 hospitalization days in 1984; the UHC/DPS database provides an estimate of 103,000 days of hospitalization. Furthermore, this reduction in hospital days is not due to a shortening of the average length of hospitalizations. There is considerable agreement in the literature concerning the average length of hospitalization.1,2,13 The length-of-stay estimates range from 18 to 23 days, which represent the usual course of hospitalization for the Goeckerman treatment. If we divide the UHC/DPS estimate of 103,000 days of hospitalization by the NHDS and Medicare estimate of 5271 days of hospitalization, we obtain 19.5 days per hospitalization, which is in agreement with the literature. Instead, the reduction in hospital days appears to be due to a reduction in the number of hospitalizations corresponding to the increase in the last decade in the use of day treatment centers and new medications to treat patients who were previously hospitalized. (Future hospitalization trends are uncertain; funding difficulties in day treatment centers would tend to increase hospitalizations, but this may be counterbalanced by increased use of cyclo-
Krueger et al,2 1984 ($000s)
$279.0 $4042.0
$4321.1
Estimate derived from NHDS, NAMCS, NHAMCS, Medicare, and Medstat ($000s)
$22.9 to $45.8 $48.8 $18.3
Estimate derived from UHC/DPS, HANES I and NDTI ($000s)
$30.1 $124.4 $36.4 $130.5 to $165.3
Combined estimate
$30.5 $86.6 $27.4 $147.9 $357.2 $649.6
sporine and other potent agents.) However, the major source of the discrepancy among these 3 studies is the difference in the valuation of hospital days. Adjusted for medical inflation, the estimates of the cost per hospital day by Kraning and Odland,1 Krueger et al,2 and UHC/DPS are $759, $1080, and $290, respectively. (Medicare does not pay on a daily basis; however, if we assume that hospitalizations under Medicare Part A averaged 20 days per stay, then reimbursements were $268 per day and private sector rates in the Medstat Group database would be approximately $536 per day.) Although the rates reported by Kraning and Odland1 and Krueger et al2 appear consistent with list charges for hospitalization, the UHS/DPS, imputed Medicare Part A daily reimbursement, and Medstat Group rates appear to be consistent with actual reimbursement rates. The current study’s estimate of outpatient and physician office visit costs ($48.8 million for the public databases and $124.4 million for the managed care database) are substantially less than the estimate from Kraning and Odland1 ($219.8 million). The difference between the public database estimate and the other two appears to be primarily attributable to differences in the average number of visits per patient year. Kraning and Odland1 state that “one million psoriatics make an average of 2.4 office visits to a dermatologist per year,” and since elsewhere in their report, they estimate that there are 1 to 3 million persons with psoriasis, we must assume that the patients with psoriasis for whom Kraning and Odland are estimating the dermatology office visit rate are those with clinically significant psoriasis. The UHC/DPS database provides an estimate of 2.5 visits per patient-year for those patients with 2 or more treatments per 1.8 years. This study’s public databases estimate 1.1 visits per clinically significant patient-year. This is in substantial agreement with estimates by Johnson et al14 of total visits, which, when divided by our estimate of the number of
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patients with clinically significant psoriasis, yields 0.7 visits per year for patients with clinically significant psoriasis to all physicians (from the 1979 NAMCS) and 0.8 visits per year to dermatologists (based on the 1982 National Disease and Therapeutic Index). The difference between the UHC/DPS estimate and the Kraning and Odland estimate of physician costs appears attributable to the difference between the cost per visit. The per visit cost as calculated by Kraning and Odland was $20.83, which inflates to $72.40 in 1997. This is substantially higher than the corresponding 1997 Medicare or managed care or UHC/DPS reimbursement rates (estimated as $31.02 and $34.19 per office visit, respectively). Again, Kraning and Odland’s rates are more consistent with list prices, and the UHC/DPS and Medicare Part B rates are more consistent with actual reimbursement rates. Outpatient and office procedure costs found in the current study ($18.4 million from the public databases and $36.4 million from the managed care database) are substantially less than the costs extrapolated from the study by Kraning and Odland1 ($65.9 million for photochemotherapy). The difference between the public and managed care estimates would appear to be related to the difference in their estimates of the number of office visits. Our public database estimate of the number of visits is consistent with a finding by Fleischer et al15 that there were 1,265,000 office visits as determined from analysis of the 1997 NAMCS. There is insufficient information to determine the cause of the discrepancy with the findings of Kraning and Odland, but the magnitude of the difference suggests that they were valuing procedures at list prices versus our policy of valuing procedures at reimbursement rates ($21.96 per procedure for UHC/DPS, $17.35 for NAMCS and NHAMCS-OV, and $20.25 from Medicare Part B). The costs for prescription medications found in the current study (from $130.6 million to $165.3 million) are somewhat less than the costs extrapolated from the report by Kraning and Odland ($206.6 million). Differences of this magnitude would be consistent with differences between prices paid by managed care for pharmaceutical products and list prices, although there is insufficient information to determine whether this is the actual cause of this discrepancy. Limitations of the current study include the following: (1) inadequate coding in NAMCS and NHAMCS-OV of miscellaneous and other procedures, which precluded costing of those procedures; (2) possible undercoding in NAMCS and NHAMCS-OV of visits to nondermatologists for treat-
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ment of psoriasis; (3) absence in the UHC/DPS database of medical services provided to individuals who had only a single physician visit for psoriasis during the study and no prescription medication or procedure with that diagnosis; (4) use of 1990 NHDS and 1993 Medicare Part A hospitalization rate to extrapolate to the 1997 US population, even though there may have been a reduction in the hospitalization rate in the intervening years; (5) application of the 1971-1974 HANES prevalence rates, even though there may have been a change in the underlying prevalence rate in the years between 1971 and 1997; and (6) difficulty in extrapolating the findings from the UHC/DPS population to the population of the United States, resulting in the need to assume that the percentage of individuals with clinically significant psoriasis (as defined in HANES I) in the US population is the same as the percentage of individuals who would have 2 or more treatments for psoriasis within an 18-month period. In summary, this study provides updates to the use and costs for medical services for the treatment of psoriasis and a level of rigor in economic methodology that has been lacking in many previous studies. Total yearly costs are approximately $452 per person with clinically significant psoriasis or $718 per person with clinically significant and active psoriasis. We found that primary medical costs for the treatment of psoriasis are medications (both OTC and prescription), followed by outpatient physician office visits. The rate of hospitalization appears to have decreased over time, reflecting the availability of better medications for providing relief of symptoms and the increased use of day treatment clinics, so that hospitalizations represent a relatively minor proportion of total costs in 1997. Because our estimate of OTC drug use was based on adjustment of results from 1979 for population and inflation and OTC drug use patterns may have changed since that time, we would encourage additional research on OTC drug use and costs. We extend our appreciation to Heather Patterson, formerly of SmithKline Beecham, for her efforts in assembling the data necessary for some analyses. REFERENCES 1. Kraning KK, Odland GF. I. Psoriasis. J Invest Dermatol 1979;73: 402-13. 2. Krueger GG, Bergstresser PR, Lowe NJ, Voorhess JJ, Weinstein GD. Psoriasis. J Am Acad Dermatol 1984;11:937-47. 3. Johnson ML, Roberts J. Skin conditions and related need for medical care among persons 1-74, United States, 1971-1974. Washington (DC): US Department of Health, Education, and Welfare; 1978. Vital and Health Statistics Series 11, No. 212. 4. US Census Bureau. National population estimates. Available from: URL:www.census.gov/population/www/estimates/uspop. html.
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5. Bureau of Labor Statistics. Consumer Price Index—All Urban Consumers. Available from: URL:www.bls.gov/labjava/ outside.jsp?survey⫽cu. 6. Medicare Public Use Files. Office of Statistics and Data Management, Health Care Financing Administration. Baltimore: US Department of Health and Human Services. Available from: URLwww.hcfa.gov/stats/pufiles.htm. 7. US Department of Healthh and Human Services. Centers for Disease Control and Prevention. National Center for Health Statistics. Documentation, electronic data downloads, and/or CD-ROMs containing survey data for the National Ambulatory Medical Care Survey, the National Hospital Medical Care Survey, the National Hospital Discharge Survey, and the National Health and Nutrition Survey. Available from: www.cdc.gov/nchs/ (select the link to “public-use data files and documentation”). 8. Medstat Group. The Medstat DRG Guide. Available from: http:// www.medstat.com/DRG/form.html. 9. Weinstein GD, Gottlieb AB, editors. National Psoriasis Founda-
10.
11. 12.
13.
14.
15.
tion: therapy of moderate-to-severe psoriasis. Stamford (CT): Haber and Flora, Inc; 1993. p. 3. Fried RG, Friedman S, Paradis C, Hatch M, Lynfield Y, Duncanson C, et al. Trivial or terrible? The psychosocial impact of psoriasis. Int J Dermatol 1995;34:101-5. Roenigk HH, Maibach HI, editors. Psoriasis. 2nd ed. New York: Marcel Dekker; 1991. P. 213-4. Koo J. Population-based epidemiologic study of psoriasis with emphasis on quality of life assessment. Dermatol Clin 1996;14: 485-96. Stern RS. Long-term use of psoralens and ultraviolet A for psoriasis: evidence for efficacy and cost savings. J Am Acad Dermatol 1986;14:520-6. Johnson ML, Johnson KG, Engel A. Prevalence, morbidity, and cost of dermatologic diseases. J Am Acad Dermatol 1984;5:930-6. Fleischer AB Jr, Feldman SR, Rapp SR. Introduction. The magnitude of skin disease in the United States. Dermatol Clin 2000;18: xv-xxi.
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T
here have been relatively few published reports of the cost of treating psoriasis in the general population (as contrasted with reports describing the costs of various regimens for treatment of periodic flare-ups of the disease). An-
From the Center for Health Sciences, SRI International, Menlo Park,a the Department of Health Management and Policy, University of Iowa,b Psoriasis Research Center, Palo Alto, c Stanford University, Palo Alto,d and SmithKline Beecham, Collegeville.e † Deceased. Funding sources: A grant from SmithKline Beecham. Conflict of interest: None. Accepted for publication July 3, 2001. Reprint requests: Harold S. Javitz, PhD, Center for Health Sciences, SRI International, 333 Ravenswood Ave, Menlo Park, CA 94025. Copyright © 2002 by the American Academy of Dermatology, Inc. 0190-9622/2002/$35.00 ⫹ 0 16/1/119669 doi:10.1067/mjd.2002.119669
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nual direct costs for treating psoriasis have been published only twice. A report by Kraning and Odland1 for the Society for Investigative Dermatology calculated the annual cost of psoriasis at $248 million. Krueger et al2 calculated the combined cost of hospitalization and outpatient therapy at $1.63 billion. If these figures were adjusted for medical inflation and increases in the number of individuals with clinically significant psoriasis (since 1978 and 1983, respectively, to 1997), these estimates would be $1.09 billion and $4.32 billion, respectively, in 1997 dollars. These revised estimates are shown in Table I by component of medical care. As seen in Table I, there are considerable discrepancies between these 2 sources, with total costs varying by a factor of 4. Because of a lack of detail concerning the methods for calculating costs in both reports, it is difficult to reconcile these differences.
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Abbreviations used: CPI: CPT: DRG: HANES I:
Consumer Price Index Current Procedural Terminology diagnosis-related group Health and Nutrition Examination Survey of 1971-1974 HMO: health maintenance organization ICD-9: International Classification of Diseases, 9th Revision NAMCS: National Ambulatory Medical Care Survey NHAMCS-OV: National Hospital Ambulatory Medical Care Survey–Outpatient Visit NDTI: National Disease and Therapeutic Index NHDS: National Hospital Discharge Survey OTC: over-the counter PSA: psoriatic arthropathy UHC/DPS: United Health Care/Diversified Pharmaceutical Services
In addition, there have been substantial changes in the treatment of this disease since these studies were published. The current study was developed to update the cost estimates by using publicly and privately available databases and a clearly specified methodology for estimating prevalence and unit costs. Accurate estimates of the direct cost of care of psoriasis are necessary if health providers, pharmaceutical companies, and public agencies such as the National Institutes of Health are to justify and provide resources necessary for further study of the epidemiology and etiology of this disease and to develop and deploy better treatments.
METHODOLOGY Definition of psoriasis Two International Classification of Diseases, 9th Revision (ICD-9) codes were used to identify services associated with treatment of patients with psoriasis: (1) 696.0 for psoriatic arthropathy (PSA) and (2) 696.1 for other types of psoriasis (including plaque, guttate, pustular, and erythrodermic). There is considerable controversy in the literature concerning whether PSA is a distinct disease or simply a form of rheumatoid arthritis occurring in patients with psoriasis. Regardless, PSA was included in the cost-of-illness study because its incidence is so much higher in patients with psoriasis than rheumatoid arthritis is in the general population, suggesting at least a common etiology and because some systemic medications (eg, methotrexate) are used in the treatment of both PSA and other types of psoriasis. However, when possible, the costs associated with the 2 different ICD-9 codes were calculated separately.
Table I. Published estimates of total US costs for psoriasis updated to 1997
Component of care
Hospitalization Outpatient physician visits Photochemotherapy Dermatologic drugs OTC drugs Total
Kraning and Odland,1 1979 ($000s)
Krueger et al,2 1984 ($000s)
$178.5 $247.9
$279.0 $4,042.0
$74.4 $233.1 $357.2 $1,091.1
$4,321.1
Disease prevalence Estimates of the prevalence rates of psoriasis were based on the Health and Nutrition Examination Survey of 1971-1974 (HANES I).3 This study was conducted by the National Center for Health Statistics to estimate the prevalence of various types of skin disease, including those dermatologic conditions about which the individual expresses concern, among the US noninstitutionalized population aged 1 to 74 years. Health data were collected by direct physical examinations of 20,749 individuals and therefore could provide information on previously unrecognized or undiagnosed conditions. Dermatologists were trained in the examination methodology to minimize interobserver variation. The dermatologists evaluating the prevalence of psoriasis classified each case as being a significant skin disease or nonsignificant, and, if significant, as active or in remission. In addition, patients classified their psoriasis as being of concern or not. The age- and sex-specific prevalence estimates of HANES I for various classifications of psoriasis (eg, clinically significant psoriasis, clinically significant psoriasis that is currently active, and clinically significant psoriasis that is in remission) were applied to estimates from the US Bureau of the Census4 of the number of adult US residents by age and sex in 1997 to obtain estimates of the prevalence of psoriasis by age and sex in 1997. These estimates were summed over age and sex to obtain estimates of the total number of adult US residents with various classifications of psoriasis. In performing these extrapolations, sex-specific prevalence rates for individuals aged 75 years and older (which were not calculated in HANES I) were set equal to the sexspecific prevalence rates for individuals aged 65 to 74 years.
COST COMPONENTS AND COSTING METHODOLOGY In the determination and attribution of relevant costs to psoriasis, a limited societal perspective was
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Table II. Sources of prevalence and medical care utilization data Type of cost
Prevalence Hospitalization Inpatient physician services Outpatient/physician office visits and procedures Prescription medication
Database
1971-1974 HANES I, 1993-1995 UHC/DPS database 1990 NHDS, 1993 Medicare Part A Hospitalizations, 1993-1995 UHC/DPS database 1993 Medicare Part A Inpatient Physician Services, 1993-1995 UHC/DPS database 1991 and 1993 NAMCS, 1992 and 1993 NHAMCS-OV, 1993 Medicare Part B Outpatient Physician Services, 1993-1995 UHC/DPS database 1996 National Disease Therapeutic Index, 1993-1995 UHC/DPS database
adopted with consideration of all direct medical costs. Indirect and intangible costs related to psoriasis are not valued in this cost-of-illness analysis. Direct medical costs are separated into the following primary components of care: hospitalization, inpatient physician services, outpatient physician visits, and prescription medications. The cost of over-thecounter (OTC) medications was estimated by updating a previous estimate in the literature to reflect changes in the number of patients with psoriasis and changes in the consumer price index (CPI) OTC drug index (series SEMB).5 Emergency department services, diagnostic radiology and laboratory services, and nursing home or home health care services were not evaluated because such costs are believed to be relatively small. Medicare reimbursement rates were applied as fee structures for valuing the services used in the public databases; managed care reimbursement rates were applied as fee structures for valuing the services used in the managed care database. The word payment or cost refers to this fee structure and the term annual cost is the product of this payment multiplied by the annual use. Estimates of annual medical resource use and costs related to psoriasis apply to the US population in 1997 and are expressed in 1997 dollars. All costs obtained before 1997 (other than OTC medications) were inflated by using the CPI medical care index (series SAM). Data sources for utilization The approach to determining medical resource utilization was to identify psoriasis-related records in multiple data sources, including national medical care utilization surveys and a managed care database. Data sources used to determine each component of medical care utilization are listed in Table II. All Medicare data are from the 5% public use files.6 The United Health Care/Diversified Pharmaceutical Services Database The United Health Care/Diversified Pharmaceutical Services (UHC/DPS) database (UHC/DPS data were made available by SmithKline Beecham, Collegeville, Pa) comprises patients from 4 geographi-
cally diverse Independent Physician Association model health maintenance organizations during the 3-year period starting on January 1, 1993. During this period, the insured population who were members for at least 12 months totaled 207,759 females and 200,088 males. The database available to this study consisted of patients who had 1 year of continuous plan membership after January 1, 1993, and had at least 2 claims for psoriasis or one claim for psoriasis and one claim for a drug or phototherapy associated with a diagnosis of psoriasis in the 3-year study period. (Thus, the UHC/DPS data does not include psoriasis costs associated with patients who have only one claim for psoriasis during the study period.) The eligible population with psoriasis consisted of 1284 adult females and 1322 adult males, who were eligible for services for an average of 1.8 years during the study period. Approximately 36% of these individuals had a diagnosis of another dermatologic disorder during the study period; the remaining 64% only had a dermatologic diagnosis of psoriasis. A comparison with the incidence rate from HANES I was obtained by calculating the prevalence from the UHC/DPS database. By dividing the number of individuals with psoriasis in a sex and age category by the number of eligible individuals in the HMO population, an approximation of the prevalence of psoriasis in the HMO was obtained. We note that although the study period was 3 years in duration, because of movement in and out of the plan, the average duration of eligibility for the more than 400,000 members with at least 12 months of eligibility sometime during the 3-year period was only 1.8 years. Consequently, the prevalence rate for the HMO is approximately equal to the percentage of patients who would have two claims for psoriasis over slightly less than a 2-year period. The HMO prevalence rate was not used in any further computations. Hospitalizations Hospitalization costs were estimated from 3 databases: (1) the 1990 National Hospital Discharge Survey
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(NHDS),7 (2) the 1993 Medicare Part A Public Use Files, and (3) the 1993-1995 UHC/DPS database. Data from the NHDS were used to estimate the number of hospitalizations in 1990 with a principal diagnosis of psoriasis for patients aged 64 years and younger. The number of hospitalizations was increased to reflect the increase in the number of adult residents with psoriasis between 1990 and 1997. (This calculation will overestimate the number of hospitalizations in 1997 to the extent to which the hospitalization rate declined between 1990 and 1997.) Hospital reimbursements were estimated by applying 1997 Medicare reimbursement rates. In addition, Medicare pays separately for inpatient physician fees. The 1993 Medicare Part A and B Public Use Files were analyzed to determine the ratio (by using 1993 reimbursement rates) of physician inpatient service reimbursements to hospital reimbursements for each specific DRG. These percentages were applied to the 1997 Medicare reimbursements for hospitalizations by DRG to obtain an estimate of physician inpatient service reimbursement. Hospital and physician inpatient reimbursements were summed to obtain an estimate of total reimbursement. Hospitalizations with a primary diagnosis of psoriasis for Medicare Part A recipients aged 65 and older were estimated from the 1993 Medicare Part A Public Use Files. The number of hospitalizations was increased to reflect this increase in the number of individuals aged 65 and older with psoriasis from 1993 to 1997. Hospital reimbursements were estimated by applying 1997 Medicare reimbursement rates. Medicare reimbursements for inpatient physician fees were calculated by increasing the hospital reimbursements by a DRG-specific percentage, representing the ratio of 1993 inpatient physician fees to 1993 hospital reimbursements. The reimbursements for hospitalizations from Medicare were compared with private sector reimbursements as reported by the Medstat Group8 for a population of approximately 7 million individuals whose health benefits were sponsored by nearly 100 large employers. Health plans represented in the database include preferred provider organizations and point of service and indemnity plans. The cost per hospitalization was defined as all payments to all providers for services rendered during an admission, including fees for hospital room and board, operating room, surgeon, attending physician, laboratory, and other services. The data do not include worker’s compensation claims by Medicare or Medicaid beneficiaries. Rates were obtained for 2000 and were deflated by using the CPI Medical Care Index to 1997.
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The data from the UHC/DPS database were used to calculate the total costs (by using the managed care reimbursement rates during 1993 to 1995) for hospitalizations of 2 days or greater duration for 8 categories of adults defined by age and sex. Costs were then inflated by using the CPI medical care index. Total costs in each category were divided by the number of person-years of coverage of individuals with psoriasis in the category (obtained from UHC/DPS enrollment data) to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I prevalence rates multiplied by 1997 US Census Bureau population estimates) in the age and sex category, and then summed across category, to obtain an estimate of the total cost of hospitalizations in the United States in 1997. Outpatient and physician office visits Outpatient and physician office visits were estimated from 4 databases: (1) the 1991 and 1993 National Ambulatory Medical Care Survey (NAMCS),7 (2) the 1992 and 1993 National Hospital Ambulatory Medical Care Survey–Outpatient Visit component (NHAMCS-OV),7 (3) the 1993 Medicare Part B Public Use Files, and (4) the 1993-1995 UHC/ DPS database. The average yearly number of physician office visits for patients aged 64 years and younger with a primary diagnosis of psoriasis were estimated from the 1991 and 1993 NAMCS data sets. These values were multiplied by the growth in the number of patients with psoriasis in the US resident adult population to take into account the increase in population from 1992 to 1997. Office procedures were valued by using 1997 Medicare reimbursement rates based on the CPT procedural code, the length of the office visit, and whether the patient was new or established. The average yearly number of hospital-based physician outpatient visits for patients aged 64 years and younger with a primary diagnosis of psoriasis were estimated from the 1992 and 1993 NHAMCS-OV data sets. These values were multiplied by the growth in the number of patients with psoriasis in the US resident adult population to take into account the increase in population from 19921993 to 1997. Records in NHAMCS-OV do not contain information on the duration of each outpatient visit, and therefore the Medicare-equivalent average reimbursement per visit cannot be directly calculated. Instead, the average Medicare reimbursement per visit was calculated from NAMCS (which contains the number of minutes for each appointment)
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separately for new and established patients and for PSA and other types of psoriasis as the principal diagnosis, and these reimbursement values were applied to NHAMCS-OV visits. The number of yearly outpatient and physician office visits for individuals aged 65 and older was estimated from the 1993 Medicare Part B Public Use Files. The number of visits was increased to reflect the growth in the number of adults aged 65 and older with psoriasis from 1993 to 1997. These visits were valued by using 1997 Medicare reimbursement rates. The data from the UHC/DPS database were used to calculate the total number and costs (by using the managed care reimbursement rates during 1993 to 1995) for outpatient and office visits for 8 categories of adults defined by age and sex. Total costs in each category were divided by the number of personyears of coverage of individuals with psoriasis in the category to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I) in the age and sex category, and then summed across categories, to obtain an estimate of the total cost of office visits in the United States in 1997.
wholesale cost per treatment day, and total costs per year for medications prescribed for patients with a diagnosis of psoriasis were obtained. The UHC/DPS database was used to calculate the total prescription medication use and costs. Psoriasis medications included antineoplastic agents and immunosuppressant medications, glucocorticoids, topical corticosteroids, antipruritic drugs, topical antifungal drugs, antipsoriasis and antieczema drugs, and selected other dermatologic preparations and compounded prescriptions. A particular prescription for medication on this list was attributed to psoriasis if it was filled within a week of a visit during which a diagnosis of psoriasis was made. Total costs for medications were obtained in 8 categories of adults defined by age and sex. Total managed care costs in each patient group were divided by an estimate of the number of person-years of coverage of individuals with psoriasis in each patient group to obtain a cost per person-year. The cost per person-year was multiplied by the number of individuals with clinically significant psoriasis in the 1997 US resident population (as derived from HANES I) in each age and sex category, and then summed across categories, to obtain an estimate of the total cost of psoriasis prescription medications in the United States in 1997.
Outpatient and office procedures Outpatient and procedures associated with office visits with a primary diagnosis of psoriasis were estimated from 4 databases: (1) the 1991 and 1993 NAMCS, (2) the 1992 and 1993 NHAMCS-OV, (3) the 1993 Medicare Part B Public Use Files, and (4) the 1993-1995 UHC/DPS database. The calculation methodology was essentially the same as that used to calculate outpatient and office visit costs. In the UHC/DPS database, only procedures for actinotherapy (Current Procedural Terminology [CPT] 96900), ultraviolet B light therapy (CPT 96910), psoralen ultraviolet A-range light therapy (CPT 96912), extensive duration photochemotherapy (CPT 96913), and unlisted special dermatologic procedures (CPT 96999) were tabulated.
OTC medications The cost of OTC medications was determined by increasing a prior estimate by Kraning and Odland1 to reflect OTC inflation and increases in the number of individuals with clinically significant psoriasis from 1979 through 1997.
Prescription medications Prescription medication use was estimated from two data sources: (1) 1996-1996 National Disease and Therapeutic Index (NDTI) (IMS America, Plymouth Meeting, Pa) and (2) the 1993-1996 UHC/DPS database. Data on prescription medication sales covering the period from the third quarter of 1995 through the third quarter of 1996 were obtained from the NDTI, a private service that compiles prescription information from a panel of approximately 3000 officebased physicians. The treatment days per year,
RESULTS Prevalence of psoriasis Disease point prevalence, as derived from the psoriasis rates in HANES I and US Bureau of Census data on the US resident population in 1997, is shown in Table III. Table IV shows the comparison of prevalence rates derived from the UHC/DPS medical study and the HANES I rates. The HMO prevalence rates are generally larger than the HANES I prevalence rates and substantially larger for 3 of the age categories for women (18-30 years, 51-65 years, and 66 years and older) and one of the age categories for men (31-50 years). If the prevalence rate among these HMO members is extrapolated to the US population, we obtain an estimate that there are 2,089,000 individuals who would receive treatment for psoriasis (at least 2 physician visits or one visit and one medication or procedure) within a 1.8-year period. This is greater than the HANES I point prevalence of 1,437,000 with clinically significant psoriasis (of
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Table III. Summary of number of adults with psoriasis in 1997 (derived from HANES I prevalence rates)
Type of condition
Table IV. Comparison of psoriasis prevalence rates in an HMO and in HANES I
Percent of US adult No. in 1997 population
Clinically significant psoriasis 1,437,000 Clinically significant psoriasis, 905,000 currently active Clinically significant psoriasis, in 532,000 remission Not clinically significant 900,000 Total clinically significant and 2,337,000 nonsignificant All psoriasis over which respondent 936,000 has expressed concern
0.73 0.46 0.27 0.46 1.18 0.47
which only 905,000 is currently active) or the HANES I point prevalence of 936,000 persons who expressed “some concern” about their condition. This finding suggests one of the following: (1) the prevalence of psoriasis has been increasing in the United States since HANES I was conducted, (2) the HMO population had a larger proportion of patients with psoriasis than the general population, or (3) the vast majority of patients with clinically nonsignificant psoriasis or psoriasis that is in remission sought treatment for their condition even if they were not “concerned” about their condition. If the UHS/DPS prevalence rate is used, rather than the HANES I prevalence rate, then our estimates of national use derived from the UHS/DPS study would need to be multiplied by a factor of 1.45. Hospitalizations Hospitalization costs from the various data sources are shown in Table V. These data appear to be relatively consistent, with the total of the NHDS (age 18 to 64) and Medicare Part A (age 65 and older) valuations ($22.9 million) being relatively similar to the total from the managed care database ($30.1 million). Additional information concerning the hospitalizations was obtained from NHDS and Medicare Part A. Table VI shows the DRG classification, number of hospitalizations, cost per hospitalization, and total costs for all adult patients projected to 1997. Costing information for private sector hospitalizations obtained from the Medstat Group was compared with the Medicare reimbursements. Private sector reimbursement rates were not available for all DRGs but were obtained for DRGs representing 75% of admissions. For those DRGs, the private sector costs were higher by a factor of 2.0. Consequently, if
Sex and age category
Prevalence of psoriasis in an HMO (defined as having 2 claims for psoriasis during an average of 1.8 y)
Point prevalence of clinically significant psoriasis in HANES I
Male, 18-30 y Male, 31-50 y Male, 51-65 y Male, 66⫹ y Female, 18-30 y Female, 31-50 y Female, 51-65 y Female, 66⫹ y
0.50% 1.00% 1.35% 1.67% 0.59% 0.84% 1.30% 1.02%
0.41% 0.65% 1.39% 1.44% 0.29% 0.75% 0.84% 0.58%
Table V. Total annual hospitalization costs (including inpatient physician reimbursement) in 1997 by principal diagnosis Type of cost
PSA
Other psoriasis
Hospitalizations (age 18-64) $5,076,000 $11,329,000 from NHDS valued at Medicare rates* Hospitalizations (age 65⫹) from $2,142,000 $4,395,000 Medicare Part A valued at Medicare rates* $30,117,000 Hospitalization (all adult) from UHC/DPS, valued at HMO rates (combined PSA and other psoriasis) *For valuation at Medstat Group rates multiply costs by 2.0.
valued at private sector reimbursement rates, the hospitalizations for psoriasis in 1997 would cost approximately $45.8 million. Hospitalizations with a secondary diagnosis of psoriasis in the NHDS were also examined to determine whether psoriasis was an underlying cause or a complicating condition. Of 44 hospitalizations in the 1990 NHDS with a secondary diagnosis of psoriasis, in only one case was it reasonable to conclude that psoriasis was the underlying cause. The UHC/DPS database contained a total of 322 adult hospital days of a total of 4684 person-years of eligibility among adult patients with psoriasis. The age- and sex-specific hospital day utilization rates for the UHC/DPS database were multiplied by the estimated number of patients with clinically significant psoriasis in 1997 to obtain 103,852 hospital days. The total cost for these hospitalizations at HMO rates is $30.1 million. This value is comparable to the total of $22.9 million obtained from the total of the NHDS and Medicare Part A valued at Medicare
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Table VI. Cost of 1997 hospitalizations (including inpatient physician fees) for psoriasis from the 1990 NHDS (age 0-64) and the 1993 Medicare Public Use Files (age 65 and older)
DRG and principal diagnosis
Diagnosis of PSA 209 (Major joint re-attachment, lower extremity) 229 (Hand or wrist procedure) 231 (Removal of internal fixation device of hip and femur) 240 (Connective tissue disorders w/o CC) 241 (Connective tissue disorder w/CC) PSA subtotal Diagnosis of other psoriasis 269 (Other skin, subcutaneous, and breast procedures, with CC) 272 (Major skin disorder with CC) 273 (Major skin disorder without CC) Other psoriasis subtotal Total or average
Projected No. of hospital stays in 1997
Average payment per hospital stay in 1997
126 62 21 319 1,101 1,630
$11,845 $3,438 $6,622 $6,012 $3,136 $4,429
$1,492 $214 $139 $1,920 $3,452 $7,218
21 2,388 1,232 3,641 5,271
$8,076 $4,916 $3,096 $4,318 $4,353
$170 $11,738 $3,815 $15,723 $22,941
Total reimbursement in 1997 ($000)
Table VII. Total annual outpatient and office visit costs in 1997 by principal diagnosis Type of cost
Physician visits (age 18-64) from NAMCS and NHAMCS-OV Physician visits (age 65⫹) from Medicare Part B Physician visits (all adult) from UHC/DPS, valued at HMO rates (combined PSA and other psoriasis)
PSA
$1,551,000 $1,467,000
Other psoriasis
$124,434,000
$34,236,000 $11,520,000
Table VIII. Total annual outpatient and office visit costs in 1997 by principal diagnosis Principal diagnosis and age category
PSA, age 18 to 64 (from NAMCS and NHAMCS-OV) PSA, age 65⫹ (from Medicare Part B) Other psoriasis, age 18-64 (from NSMCS and NHAMCS-OV) Other psoriasis, age 65⫹ (from Medicare Part B)
reimbursement rates and the total of $45.8 million those hospitalizations would cost at private sector reimbursement rates. Outpatient and physician office visits Outpatient and physician office visit costs are shown in Table VII. The total results from NAMCS, NHAMCS-OV, and Medicare Part B are substantially smaller than estimates obtained from UHC/DPS. Further details concerning the number of visits by age group are shown in Table VIII. The annual number of visits in 1997 for PSA was estimated as 70,200, and reimbursements, at $3.0 million; the corresponding values for a diagnosis of other psoriasis were 1,426,000 visits and $45.8 million. Data
No. of annual visits in 1997 (in 000s)
Reimbursement for visits in 1997 (in $000s)
38.1 32.1 1,105.2 320.9
$1,551 $1,467 $34,236 $11,520
from NAMCS and NHAMCS-OV for patients aged 18 to 64 show that the majority (58%) of the visits with a principal diagnosis of PSA were to rheumatologists with the remaining visits going to “specialists” other than dermatologists and that almost all of the visits (94%) with a principal diagnosis of other psoriasis were to dermatologists. The numbers of visits to family or general practitioners and internists were very small (less than 3% of the total). Possible explanations include undercoding of psoriasis by nondermatologists. In the UHC/DPS database, the average number of visits per patient-year was 2.5. The UHC/DPS cost per visit was very similar to the 1997 average Medicare reimbursement for the NAMCS and
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Table IX. Total annual outpatient and office procedure costs in 1997 Type of cost
Procedures (age 18 to 64) from NAMCS and NHAMCS-OV Procedures (age 65⫹) from Medicare Part B Procedures (all age categories) from UNC/DPS, valued at HMO rates
PSA
Other psoriasis
$0 $1,323,000
$5,935,000 $11,102,000
$36,361,000
NHAMCS-OV visits. Projected nationally with HANES I prevalence rates, the UHC/DPS physician visit rate extrapolated to 3.640 million physician outpatient and office visits at an annual cost of $124.4 million.
because of the costing methodology (NDTI costs tend to approximate the cost for the purchase of the medication by wholesalers; managed care institutions typically value medications at their direct costs plus pharmacy operating costs).
Outpatient and office procedures Outpatient and office procedure costs are shown in Table IX. Total costs from NAMCs, NHAMCS-OV, and Medicare Part B are substantially less than the extrapolated results from UHC/DPS. For the population of all adults in 1997, NAMCS and NHAMCS-OV projected a total of 372,572 actinotherapy procedures for psoriasis (valued at $5.168 million) and 102,519 procedures for psoriasis involving local excision of skin and subcutaneous tissue (valued at $3.076 million). In addition, there were approximately 95,000 “other miscellaneous procedures” (ICD-9-CM 99.99) and 9000 “other nonoperative measurements and examinations” (ICD-9-CM 89.24) for which the procedure descriptions were too vague to allow costing. For the population of adults aged 65 and older in 1997, Medicare Part B projected a total of 49,868 procedures for PSA (valued at $1.323 million) and 504,462 procedures for other psoriasis (valued at $11.102 million). Most of the procedures for PSA were associated with blood or urine testing, methotrexate sodium injections, and injection or draining of a joint. Most of the procedures for other psoriasis were associated with ultraviolet light therapy (266,000 procedures valued at $5.387 million), injection into skin lesions, skin lesion biopsy, destruction of benign or premalignant lesions, tissue examination by a pathologist, office consultations, and radiation therapy. For the population of all adults in 1997, the UHC/ DPS data projected to a total of 1.489 million procedures, the vast majority of which were ultraviolet B or psoralen ultraviolet A-range light therapy (50% and 41%, respectively). More than 75% of these procedures were provided by dermatologists.
OTC medications Kraning and Odland’s estimate1 of $100 million in OTC medication use in 1979 was adjusted to $357.2 million to reflect population and OTC inflation.
Prescription medications Prescription medication costs for PSA and other psoriasis in 1997 were estimated as $130.560 million from NDTI and $165.329 million from UHC/DPS. The NDTI costs may be less than the UHC/DPS costs
DISCUSSION Among the adult US population in 1997, the prevalence of clinically significant psoriasis from HANES I was 0.73% and the prevalence of all psoriasis was 1.18%. The prevalence of patients with two or more treatments for psoriasis in the last 1.8 years from UHC/DPS data is 1.06%, which appears to be generally consistent with data from HANES I. Estimates on the prevalence of psoriasis in the literature range from 0.5% to 4.6%,9 with most estimates in the range of 1.0% to 2.0%.10,11 Koo12 conducted a survey of 50,000 households in 1991 to obtain information on the prevalence of psoriasis by using patient selfreports. On the basis of responses, he estimated that the prevalence of psoriasis was 2.6% of the US population. The reported response rate for the portions of the survey that were needed to estimate the prevalence of psoriasis was 45%, which, together with self-reporting of symptoms (which presumably would have been of greater interest to individuals with psoriasis), raises some concerns about possible upward biases in his prevalence estimate. However, if his estimate were correct, our estimates of treatment costs derived from the UHC/DPS study (which were projected by using the HANES I prevalence rates) would need to be increased by a factor of 2.2. Our estimates of costs based on NAMCS, NAMCSOV, NHDS, Medicare parts A and B, and NDTI would not be affected because each of these data sources provides an estimate of total costs for diagnoses of psoriasis independently of HANES I. A summary of the cost estimates in two previous studies1,2 (adjusted for increases in population and medical inflation indices) and this study appears in Table X. The combined estimates are the average of our public and private sector database estimates,
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Table X. Comparison of direct cost estimates (adjusted for population increase and medical care inflation to 1997)
Kraning and Odland,1 1979 ($000s)
Hospitalization Outpatient physician visits Photochemotherapy Dermatologic prescription drugs OTC drugs Total
$178.5 $247.9 $74.4 $233.1 $357.2 $1091.1
except for prescription medications (which were only available from our private sector databases) and OTC medications (which were obtained from the literature). Hospitalization costs found in the current study ($22.9 million from the public databases valued at Medicare rates and $45.8 million valued at Medstat Group rates, and $30.1 million from the UHC/DPS database) are substantially less than the costs extrapolated from the studies by Kraning and Odland1 and Krueger et al2 ($178.5 million and $279.6 million, respectively). Some of this discrepancy appears to be due to the fact that hospitalization days have decreased substantially in the last decade as day treatment centers and new medications were used to treat patients who were previously hospitalized. Kraning and Odland1 estimate that there were 180,000 hospitalization days in 1979 and Krueger et al2 estimate that there were 210,000 hospitalization days in 1984; the UHC/DPS database provides an estimate of 103,000 days of hospitalization. Furthermore, this reduction in hospital days is not due to a shortening of the average length of hospitalizations. There is considerable agreement in the literature concerning the average length of hospitalization.1,2,13 The length-of-stay estimates range from 18 to 23 days, which represent the usual course of hospitalization for the Goeckerman treatment. If we divide the UHC/DPS estimate of 103,000 days of hospitalization by the NHDS and Medicare estimate of 5271 days of hospitalization, we obtain 19.5 days per hospitalization, which is in agreement with the literature. Instead, the reduction in hospital days appears to be due to a reduction in the number of hospitalizations corresponding to the increase in the last decade in the use of day treatment centers and new medications to treat patients who were previously hospitalized. (Future hospitalization trends are uncertain; funding difficulties in day treatment centers would tend to increase hospitalizations, but this may be counterbalanced by increased use of cyclo-
Krueger et al,2 1984 ($000s)
$279.0 $4042.0
$4321.1
Estimate derived from NHDS, NAMCS, NHAMCS, Medicare, and Medstat ($000s)
$22.9 to $45.8 $48.8 $18.3
Estimate derived from UHC/DPS, HANES I and NDTI ($000s)
$30.1 $124.4 $36.4 $130.5 to $165.3
Combined estimate
$30.5 $86.6 $27.4 $147.9 $357.2 $649.6
sporine and other potent agents.) However, the major source of the discrepancy among these 3 studies is the difference in the valuation of hospital days. Adjusted for medical inflation, the estimates of the cost per hospital day by Kraning and Odland,1 Krueger et al,2 and UHC/DPS are $759, $1080, and $290, respectively. (Medicare does not pay on a daily basis; however, if we assume that hospitalizations under Medicare Part A averaged 20 days per stay, then reimbursements were $268 per day and private sector rates in the Medstat Group database would be approximately $536 per day.) Although the rates reported by Kraning and Odland1 and Krueger et al2 appear consistent with list charges for hospitalization, the UHS/DPS, imputed Medicare Part A daily reimbursement, and Medstat Group rates appear to be consistent with actual reimbursement rates. The current study’s estimate of outpatient and physician office visit costs ($48.8 million for the public databases and $124.4 million for the managed care database) are substantially less than the estimate from Kraning and Odland1 ($219.8 million). The difference between the public database estimate and the other two appears to be primarily attributable to differences in the average number of visits per patient year. Kraning and Odland1 state that “one million psoriatics make an average of 2.4 office visits to a dermatologist per year,” and since elsewhere in their report, they estimate that there are 1 to 3 million persons with psoriasis, we must assume that the patients with psoriasis for whom Kraning and Odland are estimating the dermatology office visit rate are those with clinically significant psoriasis. The UHC/DPS database provides an estimate of 2.5 visits per patient-year for those patients with 2 or more treatments per 1.8 years. This study’s public databases estimate 1.1 visits per clinically significant patient-year. This is in substantial agreement with estimates by Johnson et al14 of total visits, which, when divided by our estimate of the number of
J AM ACAD DERMATOL VOLUME 46, NUMBER 6
patients with clinically significant psoriasis, yields 0.7 visits per year for patients with clinically significant psoriasis to all physicians (from the 1979 NAMCS) and 0.8 visits per year to dermatologists (based on the 1982 National Disease and Therapeutic Index). The difference between the UHC/DPS estimate and the Kraning and Odland estimate of physician costs appears attributable to the difference between the cost per visit. The per visit cost as calculated by Kraning and Odland was $20.83, which inflates to $72.40 in 1997. This is substantially higher than the corresponding 1997 Medicare or managed care or UHC/DPS reimbursement rates (estimated as $31.02 and $34.19 per office visit, respectively). Again, Kraning and Odland’s rates are more consistent with list prices, and the UHC/DPS and Medicare Part B rates are more consistent with actual reimbursement rates. Outpatient and office procedure costs found in the current study ($18.4 million from the public databases and $36.4 million from the managed care database) are substantially less than the costs extrapolated from the study by Kraning and Odland1 ($65.9 million for photochemotherapy). The difference between the public and managed care estimates would appear to be related to the difference in their estimates of the number of office visits. Our public database estimate of the number of visits is consistent with a finding by Fleischer et al15 that there were 1,265,000 office visits as determined from analysis of the 1997 NAMCS. There is insufficient information to determine the cause of the discrepancy with the findings of Kraning and Odland, but the magnitude of the difference suggests that they were valuing procedures at list prices versus our policy of valuing procedures at reimbursement rates ($21.96 per procedure for UHC/DPS, $17.35 for NAMCS and NHAMCS-OV, and $20.25 from Medicare Part B). The costs for prescription medications found in the current study (from $130.6 million to $165.3 million) are somewhat less than the costs extrapolated from the report by Kraning and Odland ($206.6 million). Differences of this magnitude would be consistent with differences between prices paid by managed care for pharmaceutical products and list prices, although there is insufficient information to determine whether this is the actual cause of this discrepancy. Limitations of the current study include the following: (1) inadequate coding in NAMCS and NHAMCS-OV of miscellaneous and other procedures, which precluded costing of those procedures; (2) possible undercoding in NAMCS and NHAMCS-OV of visits to nondermatologists for treat-
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ment of psoriasis; (3) absence in the UHC/DPS database of medical services provided to individuals who had only a single physician visit for psoriasis during the study and no prescription medication or procedure with that diagnosis; (4) use of 1990 NHDS and 1993 Medicare Part A hospitalization rate to extrapolate to the 1997 US population, even though there may have been a reduction in the hospitalization rate in the intervening years; (5) application of the 1971-1974 HANES prevalence rates, even though there may have been a change in the underlying prevalence rate in the years between 1971 and 1997; and (6) difficulty in extrapolating the findings from the UHC/DPS population to the population of the United States, resulting in the need to assume that the percentage of individuals with clinically significant psoriasis (as defined in HANES I) in the US population is the same as the percentage of individuals who would have 2 or more treatments for psoriasis within an 18-month period. In summary, this study provides updates to the use and costs for medical services for the treatment of psoriasis and a level of rigor in economic methodology that has been lacking in many previous studies. Total yearly costs are approximately $452 per person with clinically significant psoriasis or $718 per person with clinically significant and active psoriasis. We found that primary medical costs for the treatment of psoriasis are medications (both OTC and prescription), followed by outpatient physician office visits. The rate of hospitalization appears to have decreased over time, reflecting the availability of better medications for providing relief of symptoms and the increased use of day treatment clinics, so that hospitalizations represent a relatively minor proportion of total costs in 1997. Because our estimate of OTC drug use was based on adjustment of results from 1979 for population and inflation and OTC drug use patterns may have changed since that time, we would encourage additional research on OTC drug use and costs. We extend our appreciation to Heather Patterson, formerly of SmithKline Beecham, for her efforts in assembling the data necessary for some analyses. REFERENCES 1. Kraning KK, Odland GF. I. Psoriasis. J Invest Dermatol 1979;73: 402-13. 2. Krueger GG, Bergstresser PR, Lowe NJ, Voorhess JJ, Weinstein GD. Psoriasis. J Am Acad Dermatol 1984;11:937-47. 3. Johnson ML, Roberts J. Skin conditions and related need for medical care among persons 1-74, United States, 1971-1974. Washington (DC): US Department of Health, Education, and Welfare; 1978. Vital and Health Statistics Series 11, No. 212. 4. US Census Bureau. National population estimates. Available from: URL:www.census.gov/population/www/estimates/uspop. html.
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5. Bureau of Labor Statistics. Consumer Price Index—All Urban Consumers. Available from: URL:www.bls.gov/labjava/ outside.jsp?survey⫽cu. 6. Medicare Public Use Files. Office of Statistics and Data Management, Health Care Financing Administration. Baltimore: US Department of Health and Human Services. Available from: URLwww.hcfa.gov/stats/pufiles.htm. 7. US Department of Healthh and Human Services. Centers for Disease Control and Prevention. National Center for Health Statistics. Documentation, electronic data downloads, and/or CD-ROMs containing survey data for the National Ambulatory Medical Care Survey, the National Hospital Medical Care Survey, the National Hospital Discharge Survey, and the National Health and Nutrition Survey. Available from: www.cdc.gov/nchs/ (select the link to “public-use data files and documentation”). 8. Medstat Group. The Medstat DRG Guide. Available from: http:// www.medstat.com/DRG/form.html. 9. Weinstein GD, Gottlieb AB, editors. National Psoriasis Founda-
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tion: therapy of moderate-to-severe psoriasis. Stamford (CT): Haber and Flora, Inc; 1993. p. 3. Fried RG, Friedman S, Paradis C, Hatch M, Lynfield Y, Duncanson C, et al. Trivial or terrible? The psychosocial impact of psoriasis. Int J Dermatol 1995;34:101-5. Roenigk HH, Maibach HI, editors. Psoriasis. 2nd ed. New York: Marcel Dekker; 1991. P. 213-4. Koo J. Population-based epidemiologic study of psoriasis with emphasis on quality of life assessment. Dermatol Clin 1996;14: 485-96. Stern RS. Long-term use of psoralens and ultraviolet A for psoriasis: evidence for efficacy and cost savings. J Am Acad Dermatol 1986;14:520-6. Johnson ML, Johnson KG, Engel A. Prevalence, morbidity, and cost of dermatologic diseases. J Am Acad Dermatol 1984;5:930-6. Fleischer AB Jr, Feldman SR, Rapp SR. Introduction. The magnitude of skin disease in the United States. Dermatol Clin 2000;18: xv-xxi.
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