Introduction

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The debate on containing the cost of health care is mainly focused on the supply side and the financing of health care.¹ Little attention is given to changes in population health, which is another important determinant of costs. This may be because the relation between disease and costs is not straightforward and relevant data are often lacking. We therefore subdivided total healthcare costs in the Netherlands by healthcare sector, diagnosis, age, and sex to determine which illnesses and age groups have the greatest demand for care. The Dutch healthcare budget is ideal for this type of analysis since the country is small, more than 99% of its population has full health insurance cover, and because of a longstanding administrative tradition most healthcare sectors have excellent registries, of which the most important are national. The completeness of Dutch healthcare data has allowed us to include not only the acute care sectors but also those sectors which deliver long term care to disabled people. Long term care is rarely included in other studies,^2-5 which consequently underestimate the high costs of disabling disease.

	Methods

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We used data on healthcare costs for each care sector from the Ministry of Health for 1994 (table 1).⁶ Additional personal expenditures, such as over the counter medicines and spectacles (6% of all costs), were not included.

We clustered the diagnoses of the international classification of diseases (ICD, 9th revision)⁷ into 34 diagnostic groups, which can be regrouped into the 17 chapters of the ICD (table 2). We defined groups of diagnoses to minimise misclassification between diagnostic groups and so that each group would be large enough to describe a sufficiently large proportion of healthcare costs. Conditions that could not be related to a specific diagnostic group but that are unambiguously related to a specific functional system (cardiovascular, respiratory, mental, etc) were assigned to the remainder group of that specific ICD chapter. Ill defined conditions which could not be related to a specific ICD chapter were classified as "symptoms and ill defined conditions" (ICD chapter 16). This is particularly relevant in primary health care, where patients present with problems not diagnoses. To avoid double counting we have considered only primary diagnoses.

Of all healthcare costs, 8.1% could not be allocated to any diagnostic group because of insufficient information from some smaller healthcare sectors and 5.3% are for healthcare administration and are not related to specific health problems. Together with the living costs in old people's homes, these costs were assigned to non-specific healthcare costs.

For each healthcare sector we identified key variables that are representative of healthcare use in that sector, such as days of stay for nursing costs in hospitals and nursing homes or outpatient visits for costs of outpatient hospital care. We divided each sector by sex, 21 age groups (0, 1-4, 5-9, 10-14, ...95 years), and 34 diagnostic clusters to give 1428 cells (2 × 21× 34). We considered the distribution of the costs to be the same as the distribution of the key variable for that sector. Thus, for each healthcare sector costs for each combination of age, sex, and diagnostic group were calculated as the proportion of the key variable in the relevant cell times the total costs for the sector.

The probability distribution of key variables was derived from sector specific registries and sample surveys. Detailed information about the registries and the key variables used is available in a report⁸ and on our web page: http://www.eur.nl/fgg/mgz/.

	Results

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Total healthcare costs, representing 9.7% of the Dutch gross national product, were £1381 ($2124) per capita in 1994, £1613 ($2481) for women and £1144 ($1760) for men. The distribution is strongly age dependent (figure). Costs are relatively high in the first year of life, reflecting the high costs of perinatal and infant care, but then drop to the lowest levels in childhood. During adulthood costs increase slowly, and after age 50 they start to increase exponentially up to the highest age group (95). The higher share in total costs of women (59%) is predominantly caused by their longer life expectancy, the higher prevalence of women in nursing homes and homes for elderly people, and the high costs of reproduction (including contraception and diseases of the genital organs).

View larger version (32K): [in this window] [in a new window]   Total and per capita healthcare costs by age and sex for hospital and long term care in Netherlands, 1994. Long term care includes nursing homes, old people's homes, institutional care for disabled people, and appliances to assist disabled people. In 1994 $1=£0.65

Table 3 shows the share in total costs of diagnostic groups by sex (table 3). A high proportion of healthcare costs are for mental disorders. Mental retardation ranks 1, dementia ranks 3, depression and anxiety ranks 15, schizophrenia 23, alcohol and drug misuse 31, and the heterogeneous remainder group of mental disorders ranks 4. All mental disorders together cover 28.4% of the healthcare budget that could be allocated to diagnostic groups. Ill defined conditions, which include many psychosomatic problems, rank 5. Musculoskeletal diseases (predominantly all types of arthritis) rank 2. Dental diseases (predominantly dentists' costs) rank 6. The main causes of deaththat is, stroke, all cancers combined, and coronary heart diseaserank 7, 8, and 10, respectively. Among women, costs of reproduction rank 6. 

Table 4 shows the 15 diagnostic categories with the highest healthcare expenditure for five age groups. In all age groups either mental retardation or dementia is the main healthcare cost. In children cognitive disability ranks second but congenital diseases also cover many mentally disabling conditions. Among younger adults (age 15-44) the heterogeneous remainder group of mental disorders is second and schizophrenia, depression, and alcohol and drug related problems all rank among the top 15. Musculoskeletal diseases rank among the top five in all age groups after age 14, and ill defined conditions rank among the top six in all age groups. In the oldest age group (85) stroke is second and accidental falls (predominantly hip fractures) third. All cancers reach the top five only in the 65-84 age group and coronary heart disease only in middle age (age 45-64).

	Discussion

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In the Netherlands healthcare costs are dominated by old age and by disability, particularly mental disability and musculoskeletal diseases. The amount of the healthcare budget spent on the main fatal diseases is relatively modest: all cardiovascular diseases and all cancers, which together cause 67% of all deaths, accounted for only 17% of all healthcare costs that could be allocated to a diagnostic group.

These results have to be interpreted with caution. Less attention should be paid to the exact share of costs spent on each diagnostic group than to the patterns of distribution which emerge from these data. Firstly, the key variables used to break down costs are generally not collected for epidemiological purposes, but in the Netherlands there is no financial incentive to register one diagnosis rather than another. We considered only primary diagnoses. It is beyond the limits of the method used to assign costs appropriately to the primary as well as each secondary diagnosis. Valid information about secondary diagnoses is generally lacking or incomplete. As a result, costs of diagnoses that are more often registered as secondary or tertiary, such as diabetes, are slightly underestimated. However, the registered primary diagnosis is generally the more important diagnosis for the healthcare sector concerned and the main reason why health care is neededfor example, what the internist calls osteoporosis is for the surgeon a hip fracture, for the ambulance service an accidental fall, and for the nursing home a demented patient. The advantage of our method is that each guilder is allocated to only one combination of age, sex, and diagnostic group, avoiding double counting.

Secondly, the key variables used to break down costs for each healthcare sector do not represent exactly equal amounts of resources. Not all days of stay in hospitals or nursing homes are equally expensive, some hours of care are more labour intensive than others, and outpatient visits or primary care consultations can vary in length. As a result, costs of some diagnoses may be biased. For example, because hospital nursing costs are broken down by bed days without any differentiation, costs of diagnoses for which relatively more days are spent in intensive care will be slightly underestimated and vice versa. These limitations, however, will not affect our main findings, such as the exponential increase in per capita costs by age or the heavy burden of mental disorders.

Comparability
Our study's biggest strength is its comprehensiveness. This explains why our results seem at variance with an American (Medicare) study that shows decreasing costs at the oldest ages.² The American study did not include long term home care for elderly people or care in nursing and old people's homes. It is these costs which cause the exponential increase in costs in old age. Like the American study we found that costs for acute admissions in hospital decrease at the oldest ages (figure 1). Most of these patients are already admitted to a nursing home or are too old or too ill to consider hospital admission useful. A Swedish study, which is older and less complete, showed the same results.⁹