Costs to Canada’s Health Care System of
Climate Change Impacts on Health
(Annex A)
Submitted to
National Round Table on the Environment and the Economy (NRTEE)

Submitted by
ICF Marbek

March 14, 2011

222 Somerset Street West, Suite 300
Ottawa, Ontario, Canada K2P 2G3
Tel: +1 613 523-0784
Fax: +1 613 523-0717
info@marbek.ca
www.marbek.ca

Table of Contents
1

Introduction .................................................................................................. 1
1.1
1.2

2

Approach …………………………………………………………………………………………….3
2.1
2.2
2.3
2.4

3

Objectives and Scope .................................................................................................... 1
Health Impacts, Economic Value, and Health Care Costs ............................................. 1
Approach to Estimating Health Care Costs per Endpoint ............................................. 3
Proposed Comparators ............................................................................................... 12
Approach to Assessing each City’s Current Burden on Provincial Health Care Budget
..................................................................................................................................... 12
Escalation of Health Care Costs over Time ................................................................. 13

Health Care Costs Estimates ........................................................................ 15
3.1
3.2
3.3

Unit Health Care Costs in 2008 ................................................................................... 15
Unit Health Care Costs in the 2020s, 2050s and 2080s .............................................. 16
Annual Health Care Cost Estimates ............................................................................ 17

4 Summary, Limitations and Assumptions ..................................................... 22
Appendix A
References .............................................................................. A-1
Appendix B
Cost of Treatment Model (Steib et al., 2002) .......................... B-1
Appendix C
Patient Cost Estimator Estimates ............................................ C-1
Appendix D
Annual Cardiovascular and Respiratory Morbidity Impacts due to
Climate-Induced Increases in Ozone Concentrations............... D-1

List of Exhibits
Exhibit 1 Schematic of full spectrum of health care system costs of climate change .................... 2
Exhibit 2 Interactions between Health Endpoints and Health Care System Components ............. 4
Exhibit 3 Provincial-Regional Health Authority Adjustment Ratios ................................................ 6
Exhibit 4 Provincial Emergency Room Visit Costs for Respiratory Illnesses ................................... 7
Exhibit 5 Total Drug Expenditures in Canada by Source of Finance and Type, 2009 ($ billions) ... 8
Exhibit 6: Average Total Medication costs per Health Endpoint from ICAP ................................... 9
Exhibit 7 Total and Public Sector Medication Costs per Health Endpoint .................................... 10
Exhibit 8 Provincial Costs of a Doctor’s Office Visit ...................................................................... 11
Exhibit 9 Province-specific Unit Costs of the Two Comparators .................................................. 12
Exhibit 10 Current City Burdens on the Provincial Health Care Budgets (2008) ......................... 13
Exhibit 11 Increase in Real GDP for the Local Stewardship and World Market Scenarios, relative
to 2008 .......................................................................................................................................... 14
Exhibit 12 Unit Health Care Costs in 2008 for Toronto and Montreal ......................................... 15
Exhibit 13 Unit Health Care Costs in 2008 for Calgary and Vancouver ........................................ 15
Exhibit 14 Unit Health Care Costs in 2020s, 2050s and 2080s for Toronto .................................. 16
Exhibit 15 Unit Health Care Costs in 2020s, 2050s and 2080s for Montreal ................................ 16
Exhibit 16 Unit Health Care Costs in 2020s, 2050s and 2080s for Calgary ................................... 16
Exhibit 17 Unit Health Care Costs in 2020s, 2050s and 2080s for Vancouver ............................. 17
Exhibit 18 Health Care Cost Estimates by Morbidity Health Endpoint......................................... 18
Exhibit 19 Health Care Cost Estimates by Health Care System Component ................................ 20
Exhibit 20 Patient Cost Estimator Results for Ontario for Three Respiratory Illnesses (2008-2009,
CIHI (2010c))................................................................................................................................. C-1
Exhibit 21 Patient Cost Estimator Results for Alberta for Three Respiratory Illnesses (2008-2009)
...................................................................................................................................................... C-1
Exhibit 22 Patient Cost Estimator Results for British Columbia for Three Respiratory Illnesses
(2008-2009) .................................................................................................................................. C-2
Exhibit 23 Annual Cardiovascular and Respiratory Morbidity Impacts due to Climate-Induced
Increases in Ozone Concentrations ............................................................................................. D-1

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1

Introduction

1.1

Objectives and Scope

1.1.1

Objectives
The objective of this work is to provide additional information on the public sector health care
costs of morbidity estimates in “Costing Climate Impacts and Adaptation: A Canadian Study on
Human Health”, so as to express the estimated ozone related, climate change-induced
morbidity cases as a cost to the Canadian public health care system.

1.1.2

Scope
Health care cost estimates are generated for the four cities (Toronto, Montreal, Calgary,
Vancouver), over the three time slices (2020s, 2050s, 2080s) and combinations of scenarios (LS,
WM; A2, B1) of the original study.
The morbidity cases included are1:






acute respiratory symptom days (ARSD),
asthma symptom days (ASD),
minor restricted activity days (MRAD),
respiratory emergency room visits (RERV), and
respiratory hospital admissions (RHA).

Public sector health care costs are estimated based on the previously estimated number of
physical impacts in the original study “Costing Climate Impacts and Adaptation: A Canadian
Study on Human Health” and the health care cost per morbidity case estimates, calculated
using the approach outlined in Section 2.

1.2

Health Impacts, Economic Value, and Health Care Costs
Increased temperatures associated with climate change may increase ground-level ozone
concentrations.2 Ground-level ozone has been linked to cardiovascular and respiratory impacts
for individuals. The human health sector is directly and indirectly affected by a changing
climate. The economic value of these health impacts can be most appropriately measured using
the welfare economics framework and the measure of willingness-to-pay (WTP). The societal
WTP to avoid health impacts is generally made up of three main components3:




Health care-related expenditures;
Value of lost productivity; and
Pain and suffering4.

1

The health care costs relating to mortality impacts are not included in this report.
See the main report for more information.
3
An individual’s WTP may differ from society’s WTP if health care costs are not borne by the individual, or if sick
pay compensates the individual for lost productivity. Both of these conditions are true in Canada.
4
This third component has also been defined more broadly to include “inconvenience, restrictions and reduced
enjoyment of leisure activities, anxiety about the future, and concern and inconvenience to family members and
others” (Stieb et al., 2000).
2

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In this study, we are exclusively concerned with the health care-related expenditures associated
with the previously quantified increase in the five morbidity health endpoints. However, it
should be stated that climate change may have additional impacts on Canadian’s health, and
therefore the health care system, beyond those estimated in this study. In fact, the cost
estimates derived in this study should be interpreted as a subset of the total health care system
costs associated with climate change. Exhibit 1 provides a schematic that contextualizes the
costs estimated in this report (the monetized public sector health care system costs), in relation
to the full spectrum of health care system costs that could be associated with climate change.
Exhibit 1 Schematic of full spectrum of health care system costs of
climate change

Climate Change
Impacts on Health

Cardiovascular and Respiratory
Impacts

Quantified Morbidity Health
Endpoints Impacts

Monetized Public
Health Care System
Costs

In general, health care costs are reported at the aggregate level, either at the hospital, regional
or provincial level. The Canadian Institute for Health Information (CIHI) provides the most
comprehensive information on the costs of Canada’s health system, and the health of
Canadians more generally.5 Because health care costs are generally provided at the aggregate
level, the majority of studies use a top-down approach when estimating the economic burden
of illnesses on Canada’s health care system.6 For the purposes of this study however, health
care costs on a per health endpoint basis are required. Therefore, we rely on a bottom-up
approach to estimate the health care costs of those health endpoints associated with climate
change. As such, health care cost data may require manipulation to get from more general
metrics (i.e. dollars spent by hospitals) to specific costs per health endpoint (i.e. $/hospital
visit).

5
6

www.cihi.ca
For example, see the Economic Burden of Illness in Canada series (Health Canada, 2002).

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2

Approach
This section describes our approach to deriving the cost to the Canadian public health care
system of the climate change-induced health impacts in the original study, “Costing Climate
Impacts and Adaptation: A Canadian Study on Human Health”. It is divided into four subsections, outlining:
1. The approach to estimating the per health endpoint costs of the five health endpoints;
2. The three proposed comparators;
3. The approach to assessing each city’s current burden on provincial health care budgets;
and,
4. The approach to estimating health care costs into the future.

2.1

Approach to Estimating Health Care Costs per Endpoint
This section describes the approach to estimating the per health endpoint costs of climate
change on Canada’s health care system based on the five morbidity health endpoints. This
approach was developed based on a review of three main sources: the EPA’s The Cost of Illness
Handbook7, the Illness Cost of Air Pollution (ICAP) model8 and information included in CIHI’s
reports and CIHI’s Patient Cost Estimator (PCE)9.
The first step of the approach is mapping the five morbidity health endpoints to specific cost
categories of the health care system. Surveying the literature, there are four main interactions
that have been quantified between the five morbidity health endpoints and the health care
system:
1.
2.
3.
4.

hospital admissions;
emergency room visits;
medication consumption; and
doctor’s office visits.

Two of the health endpoints, RHA and RERV, have a direct relationship with the health care
system, as these health endpoints themselves involve direct interaction with the health care
system. The other three health endpoints relating to symptom days and minor restricted
activity days (ARSD, ASD, and MRAD) have a more indirect relationship to the health care
system, and therefore indirect costs.
Besides hospital admissions and emergency room visits, two other relevant forms of air
pollution related health care costs are: 1) expenditures on medication consumption and 2) visits
to the doctor’s office. As the number of symptom days associated with poor air quality
increases, it can be hypothesized that medication consumption and doctor office visits will also
increase. The link between elevated levels of air pollution and increased medication
consumption has been quantitatively proven in epidemiological studies (Menichini and Mudu,
2010; Zeghnoun et al., 1999). However, the quantitative relationship between air pollution and
increased doctor’s visits, or patients with reparatory illnesses that require a doctor’s visit, is
more uncertain (Ontario Medical Association, 2000).

7

http://www.epa.gov/oppt/coi/
http://www.cma.ca/index.php/ci_id/86830/la_id/1.htm
9
http://www.cihi.ca/CIHI-extportal/internet/en/document/spending+and+health+workforce/spending/spending+by+category/pce#
8

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It is important to reiterate that, as shown in Exhibit 1, there will be other health care costs
associated with the five morbidity health endpoints that are not included in this study. These
include both public sector costs that could not be quantified such as respiratory therapists, and
private sector drug expenditures that are purposely excluded because we are only interested in
costs accruing to the public sector.
Exhibit 2 provides an outline of the interaction between health endpoints and the health care
system.
Exhibit 2 Interactions between Health Endpoints and Health Care System Components
Health Care System Cost
Components
Hospital Admission
Emergency Room Visit
Medication Consumption
Doctor’s Office Visit
Respiratory Therapists
Other Health Care System
Services

RHA
X

Health Endpoints
RERV
ARSD

X

X
X

Xa

Xa

X
X
Xa

Xa

Xa

Xa

ASD

MRAD

X
X
Xa

X
Xa

Xa

Xa

Notes: a These interactions are not monetized

The rest of this section outlines the approach to estimating the cost of each of the specific
health care system cost components in Exhibit 2 above.
2.1.1

Hospital Admissions
The costs of respiratory hospital admissions have been estimated using a cost of treatment
model and with case cost estimates.
Stieb et al. (2002) use a cost of treatment model to estimate the Canadian health-care related
costs associated with the RHA and RERV health endpoints. Empirical data from 1,772 individuals
visiting the emergency departments for cardiorespiratory conditions in Saint John, Canada was
gathered through the use of a follow-up survey to estimate costs on a per patient basis (Stieb et
al., 2000). The parameter estimates of the cost of treatment model were derived using
stepwise ordinary least squares regression. For reference, the cost of treatment model is
presented in Appendix B.
Steib et al. (2002) use the cost of treatment model to estimate the health-care related
expenditures associated with RHA at $2,800 ($1997). The advantage of this approach is that the
model uses respiratory illness-specific data. The disadvantage of the approach is that the cost
estimates derived from relatively old data (1997) and come from only one province (New
Brunswick).
Hospital reported cost data can be used to estimate illness-specific costs on a per case basis.
There have been several Canadian specific applications of this approach, including Alberta’s

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Case Cost Reports (ACCR)10, the Ontario Case Cost Initiative (OCCI)11, the ICAP model and CIHI’s
PCE. All of these applications share a common source of data, the CIHI.
For 2008-2009 (the most recent year of data availability), CIHI’s PCE provides the inputs for
determining average illness-specific hospital admission costs for all of the provinces, except for
Quebec. Consequently, we developed an alternative approach to estimating the costs of an
RHA for Montreal, as explained later.
For the RHA costs in Toronto, Calgary and Vancouver, we follow the four general steps below
(note: CIHI’s PCE computes Steps 2 and 3, but we include an explanation of these two steps for
context):
1. Identify respiratory hospital admission patient groupings.
Hospitals track patients using distinct patient groupings based on illness condition. These
distinct patient groupings, named Case Mix Group (CMG), provide useful information on the
resources used in treatment as well as the patient’s expected length of stay, two important cost
factors in hospital admissions. In this step, the RHA health endpoint is linked with specific
CMGs.
To determine which CMGs are associated with RHA, we can use published results from Stieb et
al. (2002) and Stieb et al. (2000). Stieb et al. (2002) report that approximately 60% of RHA’s are
either asthma cases (CMG code = 147) or chronic obstructive pulmonary disease (COPD) cases
(CMG code = 139) with the remaining 40% of cases being respiratory infections (CMG code =
141). The empirical evidence presented in Stieb et al. (2000) show that asthma cases represent
47% of the combined asthma/COPD hospital admission cases. Therefore, we assign a
proportion of 28% and 32% of total RHA to asthma and COPD cases respectively. 12 We now
know the distribution of RHA broken down by CMG code.
2. Determine average daily hospital admission costs at the provincial level.
This step is achieved by dividing the total inpatient hospital expenditures by the total number
of inpatient days for hospital admissions. For example, if a hospital had total inpatient
expenditures of $1,000,000 and a total of 400 inpatient days, then the average daily cost of
hospital admission would be $2,500. This is calculated in CIHI’s PCE.
3. Adjust average daily hospital admission costs by relevant CMG code-specific costs.
As noted above, health care costs can be expected to vary by medical condition type.
Therefore, it is pertinent to adjust the average hospital admission costs determined in Step 2 by
relevant CMG codes found in Step 1 to account for these varying medical costs. The outcome of
this step is average hospital admissions costs that are specific to respiratory medical conditions.
As mentioned, the two main factors influencing patient costs are intensity of hospital resource
use and expected length of stay. The CIHI develops resource intensity weights (RIW) for each
CMG which represent the average cost for each unique CMG relative to the overall average
costs for a hospital admission (CIHI, 2008). If a CMG has a below-average cost, then the RIW will

10

These annual case reports can be accessed from http://www.health.alberta.ca/newsroom/pub-annualreports.html
11
http://www.occp.com/
12
These percentages were calculated as 47% x 60% = 28% for asthma and 53% x 60% = 32% for COPD.

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be less than one, and vice versa for CMGs with above-average costs. Therefore, RIWs are easy
to use metrics of the relative costs of varying patient medical conditions in terms of hospital
resources. CMG-specific expected length of stay estimates are reported by CIHI for province
and age groupings (CIHI, 2008). The RIW metrics and the expected length of stay estimates are
frequently revised to reflect changing health circumstances and costs.
Using the RIW metrics and expected length of stay, the average daily cost of hospital admission
can be adjusted to yield an average cost of a hospital admission, by illness, at the provincial
level. This is calculated by CIHI’s PCE. The raw provincial cost estimates are presented in
Appendix C by age group and CMG code. Because physical morbidity estimates are not age
specific, we use the estimated average cost of all age groups.13
Using the distribution of RHAs by CMG-code from Step 1, we can use the costs estimated by
CIHI’s PCE (Appendix C) to estimate the costs of a RHA at the provincial level.
4. Adjust provincial estimates by regional health authority cost ratios.
CIHI also reports the average (across all illnesses) cost per weighted case at the regional health
authority level in addition to the provincial level (CIHI, 2010f). Using the ratio of average
regional health authority inpatient costs to average provincial inpatient costs, we adjust the
provincial level, CMG code-specific inpatient cost estimates calculated above to derive a
regional estimate. Exhibit 3 provides the adjustment ratios for Toronto, Calgary and Vancouver.
In all three cities, the average regional health authority inpatient costs are higher than the
provincial average.
Exhibit 3 Provincial-Regional Health Authority Adjustment Ratios

Toronto
Calgary
Vancouver

Provincial Average
Inpatient Cost
$5,519
$6,273
$5,166

Regional Health Authority
Inpatient Cost
$5,928
$6,315
$5,714

Adjustment
Ratio
1.074
1.007
1.106

It should be noted that these average inpatient estimates reflect the costs incurred by the
hospital in providing services only, and do not include physician fees, as physicians are usually
paid by the province or health jurisdiction and not by the hospital directly. Therefore, these
cost estimates should be interpreted as an underestimate of the total costs of hospital
admissions.14
Montreal
As noted above, CIHI does not provide Quebec-specific hospital patient costs. Despite the fact
that Quebec does submit some data to CIHI, there is not enough specific financial data available
that is needed in order to calculate average costs in the PCE for Quebec. However, the ICAP

13

The impacts of air pollution are generally believed to fall disproportionally on the older population. In addition,
as shown in Appendix C, elderly patients tend to have higher hospital admission costs. Consequently, because we
use estimated average cost of all age groups, the estimated RHA costs in this report may be an underestimation of
the actual RHA costs.
14
We attempted to fill this informational gap but were unsuccessful mainly due to the difficulty in connecting
physician costs to specific hospitals and the unreliability of FTE physician data. As shown later, because the number
of increased hospital admissions is relatively low, even if physician costs were a large portion of hospital costs, our
final results will not change to a large extent.

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model does provide estimates of provincial daily hospital costs for respiratory illnesses using
data from 2005-2006 for Quebec and the rest of the provinces.
It is prudent to update the ICAP model’s Quebec estimates to account for changing health care
costs over time. We adjust these older Quebec estimates by multiplying the Quebec specific
estimates in ICAP by the ratio of CIHI’s PCE estimated costs for Ontario to the ICAP model’s
estimated cost for Ontario. Therefore, we assume that Quebec’s RHA costs have increased at
the same rate as Ontario’s RHA costs from 2006 to 2008-2009. In addition, this lack of data
does not allow for Montreal specific RHA cost estimates to be made. Instead, provincial
estimates are used in this analysis.
2.1.2

Emergency Room Visits
The costs of an emergency room visit have been estimated by Steib et al. (2002) and by CIHI
(2010g). Using the same cost of treatment model outlined above (and provided in Appendix B),
Steib et al. (2002) estimate the health-care related expenditures associated with a RERV at $930
($1997).
CIHI (2010g) provides information on the average cost of emergency room visits in Ontario in
2008. It is estimated that seniors’ emergency room visit costs for COPD and asthma conditions
are $550 and $400, respectively. Using the known relative percentages of COPD and asthma
cases for hospital admissions, we can derive an average cost for seniors of an RERV of $480. As
our quantified health endpoint is not age specific, we derive an average RERV for the whole
population. For all age groups, the average cost of emergency room visits is $260, while the
average cost of seniors’ emergency room visits is $386. Using this ratio ($260/386), we adjust
the senior-specific value of $480 to yield an average RERV for all-age groups of $323. We use
this cost of an RERV for Ontario, and information on the relative RHA costs between provinces
to provide province-specific costs for the other three provinces.15 These costs are presented in
Exhibit 4 for each of the four provinces.
Exhibit 4 Provincial Emergency Room Visit Costs for Respiratory Illnesses

Ontario
Quebec
Alberta
British Columbia

2.1.3

Provincial Emergency Room Visit
Costs for Respiratory Illnesses
($2008/visit)
$323
$243
$346
$313

Medication Consumption
In 2009, medication consumption represented over 16% of total health expenditure in Canada
(CIHI, 2010a). Increases in respiratory health endpoints have been found to increase medication
consumption (Menichini and Mudu, 2010). For this assessment, public sector medication
consumption costs on a per-health endpoint basis are estimated.

15

For example, the cost of a REV for Quebec is determined as $323*($3,409/$4,541) = $243.

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Medication consumption costs are financed by the public sector, individuals and private
insurers. Non-prescribed drugs are typically financed out-of-pocket by individuals while
prescribed drugs are financed by all three types of payers. In this analysis, because we are
estimating the costs to the public health care system, we want to estimate the medication
consumption costs that can be attributed to the public sector.
Exhibit 5 summarizes the total amount and distribution of drug costs by type of payer. Overall,
the public sector funds 38% of all drug costs while individuals and private insurers fund the
remaining 62%.
Exhibit 5 Total Drug Expenditures in Canada by Source of Finance and Type, 2009 ($ billions)

(Source: CIHI, 2010a)

Exhibit 5 presents the total distribution of drug costs by type of payer, but for this study we are
interested in the drug costs specific to the quantified morbidity health endpoints. A study of
asthma patients’ costs in south central Ontario provides information on the total (public and
private sector) medication costs incurred by asthma patients (Ungar et al., 1998). These
patient-level costs have been manipulated by the Ontario Medical Association (2000) to yield
per-illness episode medication costs for use in their ICAP model. In the ICAP model, cost factors
were used to scale the average total medication consumption per health endpoint to account
for the increased severity and duration of major health end-points (hospital admissions and
emergency room visits). The total medication costs attributed to these major health endpoints
were then subtracted from the total medication consumption costs. The remaining medication
costs were divided by the number of total estimated minor illness cases (restricted activity days
+ asthma symptom days) to yield the average medication costs of a minor illness. Total
medication consumption costs for minor restricted activity days were approximated as half of
the amount for minor illnesses. All of the medication consumption costs have been updated in
the most recent version of ICAP (Canadian Medical Association, 2008).

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Exhibit 6 presents the average total medication costs for the health endpoints included in ICAP.
Exhibit 6: Average Total Medication costs per Health Endpoint from ICAP
Hospital Emergency
Minor
Minor Restricted
a
($2006)
Admission Room Visit
Illness
Activity Day
Cost Factor
20
5
Average Cost/Incident
$546
$136
$17
$8
Notes:
a
Minor Illness includes restricted activity days and asthma symptom days.
Source: Canadian Medical Association (2008).

Overall
Average
$27

ARSDs are an important category of health impacts and contribute to approximately 80% of the
total incidence of health endpoints as calculated in the previous report “Costing Climate
Impacts and Adaptation: A Canadian Study on Human Health”. However, ARSDs are not
included in ICAP and therefore, the medication consumption costs were not estimated in ICAP
for this health endpoint. Nevertheless, ARSDs have associated medication consumption. Steib
et al. (2002) map ARSDs to typical health symptoms and show that approximately 70% of ARSDs
are associated with upper respiratory symptoms and 30% with eye irritations. Upper
respiratory symptoms include dry cough, cough with phlegm, shortness of breath, chest cold,
croup, asthma, bronchitis, flu or pneumonia (Ostro et al, 1993). Medication used to treat acute
respiratory symptoms includes eye drops, analgesics (painkillers such as aspirin, ibuprofen, etc),
throat lozenges, nose drops and dry skin lotion (United States Environmental Protection
Agency, n.d.).
To account for the medication consumption costs of ARSDs, but also to ensure the results are
defensible, we use one half of the value of an ASD, $8 per incidence ($2006), as a proxy value
for the medication consumption costs of ARSDs. This is consistent with the values used by
AQBAT for estimating the WTP. The central WTP to avoid an ARSD is approximately half of the
central WTP to avoid an ASD ($16 versus $35). Empirical evidence suggests that for respiratory
and cardiovascular illnesses, the value of cost of illness estimates is approximately one half of
the WTP estimates to avoid morbidity health endpoints (EPA, 2000). In fact, this may be an
underestimate of the true total medication costs. For example, the severity of impacts, in terms
of activity levels, is the same for both ARSDs and ASDs. For both of these health endpoints, 90%
of cases result in mild limitations and the remaining 10% of cases result in individuals being
housebound (Steib et al., 2002).
Now that we have total medication costs per health endpoint, we need to update these values
to 2008 Canadian dollars and determine the share of this total medication expenditure that is
financed by the public sector. These average medication costs were derived from a 1998 study
from Ontario but updated to 2006 dollars. These costs need to be adjusted to account for drug
price changes between 2006 and 2008. We use Statistics Canada’s consumer price index for
medicinal and pharmaceutical products to update the values in Exhibit 6 to 2008 Canadian
dollars.
In addition, we want to estimate the public sector’s share of the total respiratory medication
consumption costs. Therefore, we need to subtract the costs to the private sector from the
total respiratory medication consumption costs. The Canadian study by Ungar et al. (1998)
considers three perspectives in determining their costs for respiratory medication: societal
(total medication consumption costs), Ministry of Health (direct medication costs paid for by
the provincially administered health insurance program), and patient (noninsured health

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services and out-of-pocket expenses). Ungar et al. (1998) show that the public sector’s (Ministry
of Health) share of the total respiratory medication consumption costs are 22.3%.16 We use
this percentage to scale the total medication consumption costs to public sector medication
consumption costs. 17
Exhibit 7 presents the total and public sector medication costs per health endpoint, updated to
2008 Canadian dollars. The public sector medication costs in Exhibit 7 are used for all four
provinces.
Exhibit 7 Total and Public Sector Medication Costs per Health Endpoint

Health Endpoint
Respiratory Hospital Admissions
Respiratory Emergency Room Visits
Acute Respiratory Symptom Days
Asthma Symptom Days
Minor Restricted Activity Days

2.1.4

Medication Consumption Costs
($2008)
Total
Public Sector
$548.14
$122.41
$136.53
$30.49
$8.03
$1.79
$17.07
$3.81
$8.03
$1.79

Doctor’s Office Visits
As stated earlier, the relationship between higher levels of air pollution and increased doctor’s
visits is relatively uncertain (Ontario Medical Association, 2000). The initial version of ICAP did
not include estimates of the costs of air pollution on the health endpoints in terms of doctor’s
office visits because of this lack of information. However, it has been noted that doctor’s office
visits are an important source of health care costs for cardiorespiratory illnesses, especially for
minor illnesses (Canadian Medical Association, 2008).
The inclusion of doctor’s office visits was debated during the expert opinion elicitation process
undertaken by the Canadian Medical Association (CMA) as part of the continued revision of the
ICAP model (Canadian Medical Association, 2008). It was concluded that including this cost
category would increase the relevance of the health care cost results. In their technical report,
the CMA uses the risk coefficients for acute exposure to air pollution for premature mortality as
proxies for the risk coefficients for cardiovascular and respiratory-related causes for doctor’s
visits. However, the necessary base incidence rate was only collected for Ontario and the lack of
a centralized database of doctor’s office visits has limited the inclusion of the other provinces.
Therefore, the newer version of ICAP has the ability to include the health care costs associated
with doctor’s office visits in Ontario, but not the other provinces (Canadian Medical Association,
2008).

16

It is interesting to note that the public share of total medication costs for respiratory drugs is lower than the
overall share of total drug expenditures financed by the public sector (shown in Exhibit 5). This suggests that for
the respiratory symptoms relating to the health endpoints, the private sector covers a larger percentage of the
medication consumption costs relative to all medication consumption costs.
17
Ungar et al. (1998) present the overall proportion of respiratory medication costs paid by the public sector and
they do not show the breakdown of the costs by health endpoint. It is probable that the public sector’s share of
drug costs would vary across health endpoint. For example, the public sector may pay 50% of the drug costs
associated with a RHA, but only 10% of drug costs associated with an ASD. In the absence of more refined data, we
use the same proportion of public sector costs, 22.3% of overall medication costs, across all five health endpoints.

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To include this important source of health care costs, we used existing information on doctor’s
office visit rates and costs for Ontario to extrapolate data for the other provinces. In 2008, it is
estimated that 260,000 visits to Ontario doctor office visits are associated with air pollution
exposure and there were approximately 10,383,000 Ontario cases of respiratory minor illnesses
(Canadian Medical Association, 2008). Therefore, on average, for every case 1,000 cases of
minor respiratory illnesses, there are approximately 25 doctor’s office visits.
We use the ratio between doctor’s office visits caused by air pollution to cases of respiratory
minor illnesses as reported for Ontario. This ratio is assumed to be the same for the other
provinces.
The costs of doctor’s office visits for respiratory symptoms have been estimated for Ontario
(Ontario Medical Association, 2000). These costs were estimated using physician billing code
data in Ontario for 1998-1999 and correspond to the ICD-9 codes relating to respiratory
illnesses.18 For its central estimate, ICAP uses only fee codes that represent the majority of
physician’s billings for an ICD-9 and assume that each doctor’s visit is comprised of only one
service. Their calculations result in an average cost per doctor’s office visit of $16.56 ($2006) for
asthma symptoms and $43.59 ($2006) for acute respiratory symptoms.19 As they note, these
cost estimates excludes multiple-service visits and are therefore likely an underestimation
(Ontario Medical Association, 2000).
We adjust these costs to account for increases in doctor’s payments by the provincial
government over time (between 2006 and 2008) in Ontario. The other three provinces are
adjusted based on the average relative cost per service in that province compared to Ontario.
For example, in 2009, if the average cost per service in Ontario was $50 a visit and the cost was
$45 a visit in British Columbia, we would adjust the figures above by a factor of 90% ($45/$50).
Information on physician fees is taken from CIHI data (CIHI, 2010b).
Exhibit 8 presents the provincial costs of a doctor’s office visit as well as the costs of doctor’s
office visits on a per health endpoint basis. We use the latter metric multiplied by the climateinduced increases in ARSD and ASD to determine the incremental costs to the health care
system of increased visits to the doctor’s office.
Exhibit 8 Provincial Costs of a Doctor’s Office Visit
Costs per Doctor’s Office Visit Costs per Health Endpoint
ARSD
ASD
ARSD
ASD
Ontario
$46.78
$17.77
$1.17
$0.44
Quebec
$50.10
$19.03
$1.25
$0.48
Alberta
$62.08
$23.58
$1.55
$0.59
British Columbia
$55.98
$21.27
$1.40
$0.53
Notes: The costs per health endpoint are derived by multiplying the cost per
doctor’s office visit by the incidence rate of 25 visits per 1,000 minor illnesses

18

ICD-9 codes are diagnostic code descriptions developed by the International Classification of Diseases and
Related Health Problems.
19
The relatively low costs associated with the average cost of a doctor’s office visit for asthma symptoms can be
explained by the fact that the vast majority of cases are for renewing prescriptions (Ontario Medical Association,
2000).

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11

Final Report: Report Title

2.2

Proposed Comparators
In consultation with the NRTEE, the following two comparators were selected to illustrate the
monetary impacts to the health care system:



Number of full-time equivalent (FTE) family medicine physicians: The cost of the average
FTE family medicine physicians is calculated as the average total physician clinical payment
per FTE family medicine physician, and
Number of general duty registered nurses: The cost of the average general duty registered
nurse is calculated as the average annual income of a general duty registered nurse.

Exhibit 9 presents the province specific unit costs of the two comparators. All values are
reported in 2008 dollars.
Exhibit 9 Province-specific Unit Costs of the Two Comparators
Average annual income of a
Total clinical costs per FTE
general duty registered
$2008
family medicine physician
nurse*
Ontario
$395,430
$69,102
Quebec
$277,314
$50,276
Alberta
$362,037
$71,715
British Columbia
$295,505
$64,777
*Calculated as the average of the minimum and maximum annual incomes of
nurses from the four provincial nurse unions.
Source: Family Medicine Physician: CIHI (2010b); General Duty Registered
Nurse: Canadian Federation of Nurses Unions (2010).

Using these comparators, one can make statements such as “the estimated public sector health
care costs of climate change on the five morbidity endpoints is equivalent to X number of annual
full-time equivalent family medicine physicians, or Y number of general duty registered nurses
each year”, something which the general public can identify with.

2.3

Approach to Assessing each City’s Current Burden on Provincial Health
Care Budget
The exact burden that a Canadian city has on the provincial health care budget is difficult to
determine, largely due to number of jurisdictions and payment systems that make up Canada’s
health care system. While health care cost information is available at the regional health
authority level, these expenditures do not cover all public-sector health expenditures directly
paid by the provincial government, such as physician fees and those costs incurred by municipal
governments.
To provide an estimate of the four cities burden on their respective provincial health care
budget, we rely on provincial level estimates of per capita public-sector health expenditures as
reported by CIHI (2010e). We multiply per-capita costs by the population of the city to derive
the city’s expected health care burden. Exhibit 10 shows the per capita public-sector health
expenditures, as well as each of the four cities estimated health care burdens. These values are
presented to provide context for the health care estimates presented in Section 3.

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12

Final Report: Report Title

Exhibit 10 Current City Burdens on the Provincial Health Care Budgets (2008)
$2008

Public-Sector Health 2008 Population Current City Heath
Expenditures,
(thousands)
Care Burden
per capita
($ millions)
Toronto
$3,549
5,054
$17,937
Montreal
$3,285
3,407
$11,189
Calgary
$4,141
1,077
$4,458
Vancouver
$3,569
2,081
$7,427
Source: CIHI (2010e)

2.4

Total Provincial Public
Heath Care Spending
($ millions)
$45,888
$25,459
$14,847
$15,641

Escalation of Health Care Costs over Time
Health care costs are increasing in Canada, in real terms and as a percentage of GDP. In 1975,
health care costs represented 7.0% of Canada’s GDP. By 2009, this percentage had increased to
11.9% (CIHI, 2010e). Therefore, health care costs have experienced an annual increase, as a
percentage of GDP, of 0.14% per year over the last 35 years. In the last 10 years, the rate of
growth in health care costs, as a percentage of GDP, has accelerated to 0.31% per year.
Although total health care costs are increasing, the direction of change in per health endpoint
costs (in real terms) is not clear. On the one hand, real increases in wages and higher costs of
newly developed medication and equipment may increase the per health endpoint costs. On
the other hand, new technologies and innovations may reduce the costs of providing existing
services and care to patients.
There is some empirical evidence on the dynamic nature of per patient costs in Canada that
suggests the per health endpoint costs increase in real terms. Time-series data, from 2004-2005
to 2008-2009, on provincial hospital admission costs per patient is available from CIHI (2010f).
Using a simple population weighted average for all the provinces (except Quebec), the average
cost per weighted case in Canada has increased (in real terms) by 3.4% a year. This percentage
increase compares with the average annual increase in Canada’s real GDP in the last ten years
of 2.1%. Therefore, per patient costs in Canadian hospitals have increased at a rate that is
approximately 162% times that of the rate of real GDP growth.
Information at the regional level reveals that the health regions covering the major cities tend
to have a lower growth in patient costs relative to the provincial average. For example, the
Toronto Central District Health Council per patient cost increased 0.9% per year versus 3.3% for
Ontario, the Calgary Health Region the per patient cost increased 4.2% per year versus 4.9% for
Alberta, and the Vancouver Coastal Health Authority per patient cost increased 0.6% per year
versus 2.5% for British Columbia.
In this report, it is assumed that per health endpoint health care costs increase at the same rate
as the real GDP growth rate. Therefore, costs will be higher under the high growth scenario
(World Market) relative to the low growth scenario (Local Stewardship). Exhibit 11 shows the
percentage increase in real GDP relative to 2008 for the three time-periods.

ICF Marbek

13

Final Report: Report Title

Exhibit 11 Increase in Real GDP for the Local Stewardship and World Market Scenarios,
relative to 2008
Increase in Real GDP
relative to 2008

ICF Marbek

LS

WM

2010-2040

7%

49%

2040-2070

44%

212%

2070-2100

78%

548%

14

Final Report: Report Title

3

Health Care Costs Estimates
This section presents the health care cost estimates to the Canadian public health care system,
based on the methodology described in Section 2 of this report, and the number of climate
change-induced morbidity health impacts in the original study, “Costing Climate Impacts and
Adaptation: A Canadian Study on Human Health”. This section is divided into three subsections, including:
1. The unit health care costs in 2008
2. The unit health care costs in the various time-slices (2020s, 2050s and 2080s) and socioeconomic (World Markets, Local Stewardship) scenarios.
3. The annual health care cost estimates by morbidity health endpoint and by health care
system component for the four cities, three time periods, and two socio-economic and
two climate scenarios.

3.1

Unit Health Care Costs in 2008
Exhibit 12 and Exhibit 13 present the unit health care costs in 2008 for Toronto, Montreal,
Calgary and Vancouver. As shown, RHAs have the highest unit health care costs, followed by
RERVs.
Exhibit 12 Unit Health Care Costs in 2008 for Toronto and Montreal

Hospital
Admission
Emergency
Room Visit
Medication
Consumption
Doctor’s Office
Visit
Total

RHA

RERV

$4,541

-

-

$323

$122

Toronto
ARSD

ASD

MRAD

RHA

RERV

Montreal
ARSD

-

-

-

$3,409

-

-

-

-

-

-

-

-

$243

-

-

-

$30

$1.79

$3.81

-

-

$1.17

$0.44

$4,664

$354

$2.96

$4.26

$1.79
$1.79

$122

ASD

MRAD

$30

$1.79

$3.81

-

-

$1.25

$0.48

$3,532

$273

$3.05

$4.29

$1.79
$1.79

Exhibit 13 Unit Health Care Costs in 2008 for Calgary and Vancouver

Hospital
Admission
Emergency
Room Visit
Medication
Consumption
Doctor’s Office
Visit
Total

ICF Marbek

RHA

RERV

Calgary
ARSD

$4,862

-

-

-

-

$4,403

-

-

-

-

-

$346

-

-

-

-

$313

-

-

-

$122

ASD

MRAD

RHA

$30

$1.79

$3.81

$1.79

-

-

$1.55

$0.59

-

$4,984

$377

$3.35

$4.40

$1.79

$122

Vancouver
RERV
ARSD
ASD

$30

$1.79

$3.81

-

-

$1.40

$0.53

$4,525

$344

$3.19

$4.34

MRAD

$1.79
$1.79

15

Final Report: Report Title

3.2

Unit Health Care Costs in the 2020s, 2050s and 2080s
Exhibit 14, Exhibit 15, Exhibit 16, Exhibit 17 present the unit health care costs in the 2020s,
2050s and 2080s for Toronto, Montreal, Calgary and Vancouver and for both socio-economic
scenarios (Local Stewardship and World Market). Unit health care costs increase in real terms
throughout the three time periods. Because of the differences in real GDP increases, the unit
health care costs are higher under the WM scenario relative to the LS scenario.
Exhibit 14 Unit Health Care Costs in 2020s, 2050s and 2080s for Toronto
Toronto
Unit Health Care System Cost
Components ($2008)

2008

2020s

2050s

LS

WM

LS

Acute Respiratory Symptom Days

$2.96

$2.96

$3.16

$4.43

$4.27

$9.26

$5.27

$19.21

Asthma Symptom Days

$4.26

$4.26

$4.53

$6.36

$6.13

$13.30

$7.57

$27.59

Minor Restricted Activity Days

$1.79

$1.79

$1.91

$2.68

$2.59

$5.60

$3.19

$11.63

Respiratory Emergency Room
Visits

$354

$354

$377

$529

$510

$1,105

$629

$2,294

$4,664

$4,664

$4,967

$6,968

$6,722

$14,571

$8,293

$30,232

Respiratory Hospital Admissions

WM

LS

2080s

WM

LS

WM

Exhibit 15 Unit Health Care Costs in 2020s, 2050s and 2080s for Montreal
Montreal
Unit Health Care System Cost
Components ($2008)

2008
LS

2020s
LS

LS

2050s
LS

LS

2080s
LS

LS

LS

Acute Respiratory Symptom Days

$3.05

$3.05

$3.24

$4.55

$4.39

$9.52

$5.42

$19.75

Asthma Symptom Days

$4.29

$4.29

$4.57

$6.41

$6.18

$13.39

$7.62

$27.79

Minor Restricted Activity Days

$1.79

$1.79

$1.91

$2.68

$2.59

$5.60

$3.19

$11.63

Respiratory Emergency Room
Visits

$273

$273

$291

$408

$394

$854

$486

$1,771

$3,532

$3,532

$3,762

$5,277

$5,091

$11,035

$6,280

$22,894

Respiratory Hospital Admissions

Exhibit 16 Unit Health Care Costs in 2020s, 2050s and 2080s for Calgary
Calgary
Unit Health Care System Cost
Components ($2008)

2008

2020s

2050s

LS

WM

LS

Acute Respiratory Symptom Days

$3.35

$3.35

$3.56

$5.00

$4.82

$10.45

$5.95

$21.69

Asthma Symptom Days

$4.40

$4.40

$4.69

$6.58

$6.34

$13.75

$7.83

$28.53

Minor Restricted Activity Days

$1.79

$1.79

$1.91

$2.68

$2.59

$5.60

$3.19

$11.63

Respiratory Emergency Room
Visits

$377

$377

$401

$563

$543

$1,177

$670

$2,441

$4,984

$4,984

$5,309

$7,447

$7,184

$15,572

$8,862

$32,309

Respiratory Hospital Admissions

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WM

LS

2080s

WM

LS

WM

16

Final Report: Report Title

Exhibit 17 Unit Health Care Costs in 2020s, 2050s and 2080s for Vancouver
Vancouver
Unit Health Care System Cost
Components ($2008)

2020s

2050s

WM

LS

2080s

LS

WM

LS

Acute Respiratory Symptom Days

$3.19

$3.19

$3.40

$4.77

$4.60

$9.98

$5.68

$20.70

Asthma Symptom Days

$4.34

$4.34

$4.63

$6.49

$6.26

$13.57

$7.72

$28.15

Minor Restricted Activity Days

$1.79

$1.79

$1.91

$2.68

$2.59

$5.60

$3.19

$11.63

Respiratory Emergency Room
Visits

$344

$344

$366

$514

$496

$1,075

$612

$2,230

$4,525

$4,525

$4,820

$6,761

$6,522

$14,138

$8,046

$29,334

Respiratory Hospital Admissions

3.3

2008

WM

LS

WM

Annual Health Care Cost Estimates
Using the results summarized in Section 3.2 and the physical morbidity estimates from Exhibit
20 in the original report (presented in Appendix D), we estimate each city’s annual health care
cost estimates for each of the 30 year time periods (2020s, 2050s, 2080s), socio-economic
scenarios (Local Stewardship, World Markets) and climate scenarios (A2, B1).
Exhibit 18 presents the annual health care system cost by health endpoint. For all cities, time
periods and socio-economic and climate scenarios, ARSDs are associated with approximately
70% of the total public sector health care costs. Although the per health endpoint health care
costs are low relative to the other health endpoints, as noted earlier, ARSDs represent
approximately 80% of the total incidence of quantified morbidity health endpoints. Therefore,
it is not surprising that this health endpoint constitutes the majority of public sector health care
costs. ASDs and RHAs are the second and third largest contributors to public sector health care
costs, respectively, followed by MRADs and RERVs.
Exhibit 19 presented these annual costs by health care system component. Medication
consumption comprises approximately 55 to 60% of the total public health care system cost,
depending on the city, time period and scenario. The next largest contributor to public sector
health care costs is doctor’s office visits, followed by hospital admissions and then emergency
room visits. The main reason medication consumption costs represent such a large proportion
of total public health care costs is the costs associated with ARSDs. As noted in the previous
paragraph, ARSDs make up 70% of total public health care costs and medication costs cover
60% of ARSD costs.

ICF Marbek

17

Final Report: Report Title

Exhibit 18 Health Care Cost Estimates by Morbidity Health Endpoint
Annual
Health Care
Costs 2020s
($000s)
Acute
Respiratory
Symptom
Days
Asthma
Symptom
Days
Minor
Restricted
Activity Days
Respiratory
Emergency
Room Visits
Respiratory
Hospital
Admissions
Total

ICF Marbek

Toronto

Montreal

A2
LS

B1
WM

LS

Calgary

A2
WM

LS

B1
WM

LS

Vancouver

A2
WM

LS

B1
WM

LS

A2
WM

LS

B1
WM

LS

WM

$1,023

$1,483

$886

$1,285

$780

$1,131

$662

$959

$220

$319

$220

$319

$673

$976

$673

$976

$217

$314

$188

$272

$162

$235

$137

$199

$43

$62

$43

$62

$135

$196

$135

$196

$57

$83

$49

$72

$42

$61

$36

$52

$11

$16

$11

$16

$35

$51

$35

$51

$38

$56

$34

$49

$24

$34

$20

$29

$7

$10

$7

$10

$24

$34

$24

$34

$169

$244

$144

$209

$102

$148

$87

$121

$32

$45

$32

$45

$101

$149

$101

$149

$1,504

$2,179

$1,301

$1,886

$1,110

$1,609

$942

$1,361

$312

$451

$312

$451

$969

$1,406

$969

$1,406

18

Final Report: Report Title

Annual Health
Care Costs
2050s ($000s)
Acute
Respiratory
Symptom Days
Asthma
Symptom Days
Minor Restricted
Activity Days
Respiratory
Emergency Room
Visits
Respiratory
Hospital
Admissions
Total

Annual Health
Care Costs
2080s ($000s)
Acute
Respiratory
Symptom Days
Asthma
Symptom Days
Minor Restricted
Activity Days
Respiratory
Emergency Room
Visits
Respiratory
Hospital
Admissions
Total

ICF Marbek

Toronto

Montreal

A2
LS

B1
WM

LS

Calgary

A2
WM

LS

B1
WM

LS

Vancouver

A2
WM

B1

LS

A2

WM

LS

WM

LS

B1
WM

LS

WM

$3,121

$7,565

$2,147

$5,203

$2,419

$5,864

$1,702

$4,125

$638

$1,546

$459

$1,112

$1,600

$3,878

$1,319

$3,198

$663

$1,608

$456

$1,104

$504

$1,222

$354

$858

$124

$301

$89

$216

$322

$782

$266

$644

$174

$422

$120

$290

$131

$318

$92

$224

$32

$76

$23

$55

$83

$201

$68

$166

$118

$287

$82

$198

$74

$178

$52

$125

$21

$51

$15

$36

$57

$136

$46

$113

$511

$1,239

$350

$845

$311

$761

$219

$530

$93

$218

$65

$156

$241

$594

$202

$481

$4,588

$11,121

$3,153

$7,641

$3,439

$8,343

$2,419

$5,862

$907

$2,192

$650

$1,575

$2,303

$5,591

$1,901

$4,600

Toronto

Montreal

A2

B1
LS

Calgary

A2

LS

WM

WM

$7,555

$30,621

$4,036

$16,359

$1,612

$6,533

$857

$422

$1,711

$288

LS

B1

Vancouver

A2

WM

LS

WM

$5,872

$23,800

$3,124

$12,660

$3,475

$1,229

$4,980

$650

$225

$913

$319

$1,294

$1,163

$153

$619

$178

$1,236

$5,018

$663

$2,691

$11,113

$45,047

$5,935

$24,057

LS

B1

A2

B1

WM

LS

WM

LS

WM

LS

WM

$1,420

$5,753

$818

$3,314

$3,382

$13,709

$2,179

$8,832

$2,636

$277

$1,123

$159

$645

$684

$2,771

$439

$1,779

$170

$687

$70

$285

$40

$164

$175

$711

$113

$458

$724

$95

$384

$46

$188

$27

$110

$119

$484

$76

$310

$760

$3,068

$402

$1,626

$204

$808

$115

$452

$515

$2,083

$330

$1,349

$8,358

$33,866

$4,440

$17,993

$2,017

$8,157

$1,159

$4,685

$4,876

$19,758

$3,137

$12,728

19

Final Report: Report Title

Exhibit 19 Health Care Cost Estimates by Health Care System Component
Annual Health
Care Costs
2020s ($000s)
Hospital
Admission
Emergency
Room Visit
Medication
Consumption
Doctor’s Office
Visit
Total

Annual Health
Care Costs
2050s ($000s)
Hospital
Admission
Emergency
Room Visit
Medication
Consumption
Doctor’s Office
Visit
Total

ICF Marbek

Toronto

Montreal

A2
LS

B1
WM

LS

Calgary

A2
WM

LS

B1
WM

LS

Vancouver

A2
WM

LS

B1
WM

LS

A2
WM

LS

B1
WM

LS

WM

$164

$237

$140

$204

$98

$143

$84

$117

$31

$44

$31

$44

$98

$145

$98

$145

$35

$51

$31

$44

$21

$30

$18

$26

$7

$9

$7

$9

$22

$31

$22

$31

$878

$1,273

$761

$1,103

$652

$945

$553

$801

$167

$242

$167

$242

$537

$778

$537

$778

$426

$618

$369

$535

$339

$491

$287

$417

$108

$156

$108

$156

$312

$452

$312

$452

$1,504

$2,179

$1,301

$1,886

$1,110

$1,609

$942

$1,361

$312

$451

$312

$451

$969

$1,406

$969

$1,406

Toronto

Montreal

A2
LS

B1
WM

LS

Calgary

A2
WM

LS

B1
WM

LS

Vancouver

A2
WM

LS

B1
WM

LS

A2
WM

LS

B1
WM

LS

WM

$497

$1,206

$340

$823

$300

$735

$211

$511

$91

$213

$63

$152

$235

$578

$197

$468

$108

$263

$75

$181

$65

$158

$46

$111

$19

$47

$13

$34

$52

$124

$42

$103

$2,681

$6,499

$1,843

$4,468

$2,023

$4,904

$1,423

$3,448

$485

$1,175

$349

$845

$1,276

$3,094

$1,052

$2,549

$1,301

$3,154

$895

$2,169

$1,051

$2,547

$739

$1,791

$312

$757

$225

$545

$741

$1,796

$611

$1,480

$4,588

$11,121

$3,153

$7,641

$3,439

$8,343

$2,419

$5,862

$907

$2,192

$650

$1,575

$2,303

$5,591

$1,901

$4,600

20

Final Report: Report Title

Annual Health
Care Costs
2080s ($000s)
Hospital
Admission
Emergency
Room Visit
Medication
Consumption
Doctor’s Office
Visit
Total

ICF Marbek

Toronto

Montreal

A2
LS

B1
WM

LS

Calgary

A2
WM

LS

B1
WM

LS

Vancouver

A2
WM

LS

B1
WM

LS

A2
WM

LS

B1
WM

LS

WM

$1,203

$4,887

$646

$2,620

$734

$2,962

$388

$1,569

$199

$788

$112

$441

$501

$2,026

$321

$1,313

$263

$1,063

$140

$566

$158

$644

$84

$341

$42

$173

$25

$101

$109

$441

$70

$282

$6,497

$26,330

$3,467

$14,051

$4,916

$19,922

$2,612

$10,584

$1,080

$4,377

$622

$2,519

$2,700

$10,943

$1,738

$7,044

$3,150

$12,768

$1,683

$6,819

$2,551

$10,339

$1,357

$5,498

$696

$2,819

$401

$1,624

$1,566

$6,348

$1,009

$4,089

$11,113

$45,047

$5,935

$24,057

$8,358

$33,866

$4,440

$17,993

$2,017

$8,157

$1,159

$4,685

$4,876

$19,758

$3,137

$12,728

21

Final Report: Report Title

4

Summary, Limitations and Assumptions
The objective of this annex was to estimate the public sector health care costs associated with
the previously quantified climate-induced increase in morbidity health endpoints associated
with increased ozone concentration levels. The results estimated in this report suggest that
climate change impacts will increase the public sector health care costs associated with the five
respiratory and cardiovascular morbidity health endpoints.20 In addition, the results suggest
that the majority of total public sector health care costs are caused by the large number of
symptom days, even though the per incidence cost is low. This is in comparison to the relatively
small number of incidences of the much more costly health endpoints such as RERVs and RHAs.
There are several limitations of this report. First, there are burdens that the quantified health
endpoints have on the health care system (such as respiratory therapists) that were not
monetized in this report due to lack of data. Second, physician costs associated with hospital
admissions and emergency room visits were not included in the cost estimates (due to lack of
data). Both of these limitations cause the cost results to likely be underestimations of the actual
costs to the public health care system. Third, the estimates for medication consumption costs,
although updated to 2008 Canadian dollars, come from a primary study conducted in Ontario in
the mid 1990s. Because medication consumption costs are such a large portion of overall public
sector costs, using more recent medication consumption data sources (from all of the provinces
considered in this report) would provide more up-to-date and geographically representative
cost estimates.
Two of the most significant assumptions are made in regards to 1) medication consumption
costs for ARSDs and 2) the escalation of costs over time. The assumption regarding the
medication consumption costs of ARSDs, although conservative, is uncertain. While more
primary research is needed to yield a more precise drug cost estimate of ARSDs, the values
used in this report are the most defensible estimate given the available information. The
second assumption, regarding how the health care costs change into the future, is also
uncertain and has a large impact on the results, especially for the 2050s and 2080s results. If
real unit health care costs increase faster than the increase in real GDP, and there is some
evidence to support this (as presented in Section 2.4), then the public sector health care costs
estimated in this report will be an underestimate. Clearly, the opposite is true if real unit health
care costs increase at a rate less than the increase in real GDP. Most likely, there will probably
be periods where real unit health care costs rise faster than the increase in real GDP and
periods where they rise slower as the factors influencing unit health care costs may not change
at constant rates (due to such things as technology, real wages of health care professionals,
government funding etc).

20

It is worth stating again that the cost estimates exclude and health care costs associated with ozone-related
mortality.

ICF Marbek

22

Appendix A

References

Canadian Federation of Nurses Unions (2010). 2009 Contract Comparison Document – Overview
of Key Nursing Contract Provisions. Accessed on February 14th 2011 from
http://www.nursesunions.ca/sites/default/files/2010.04.Contract_comparison.pdf
Canadian Institute for Health Information (2008). The Cost of Hospital Stays: Why Costs Vary.
Ottawa: CIHI.
Canadian Institute for Health Information (2010a). Drug Expenditure in Canada 1985 to 2009.
Ottawa: CIHI.
Canadian Institute for Health Information (2010b). National Physician Database, 2008- 2009.
Ottawa: CIHI.
Canadian Institute for Health Information (2010c). Patient Cost Estimator, 2008- 2009. Ottawa:
CIHI.
Canadian Institute for Health Information (2010d). Patient Cost Estimator – Methodological
Notes and Glossary. Ottawa: CIHI.
Canadian Institute for Health Information (2010e). National Health Expenditure Trends, 1975 to
2010. Ottawa: CIHI.
Canadian Institute for Health Information (2010f). Canadian MIS Database (CMDB), Hospital
Financial Performance Indicators, 1999-2000 to 2008-2009. Ottawa: CIHI.
Canadian Institute for Health Information (2010g). Seniors’ Use of Emergency Departments in
Ontario, 2004-2005 to 2008-2009. Ottawa: CIHI.
Ontario Medical Association (2000). Illness Costs of Air Pollution Phase II: Estimating Health and
Economic Damages. Final Report submitted by DSS Management Consultants Inc.
Canadian Medical Association (2008). No Breathing Room: National Illness Costs of Air Pollution.
Technical Report submitted by DSS Management Consultants Inc.
EPA (2000). Handbook for Non-Cancer Health Effects Valuation. Report of the Non-Cancer
Health Effects Valuation Subcommittee of the EPA Social Science Discussion Group.
Health Canada (2002). Economic Burden of Illness in Canada, 1998. Report prepared by the
Strategic Policy Directorate, Population and Public Health Branch.
Menichini, F and P Mudu (2010). Drug Consumption and Air Pollution: an Overview.
Pharmacoepidemiology and Drug Safety 19: 1300-1315.
Ostro, .D., J.M. Sanchez, C. Aranda, and G.S. Eskeland, (1993). Air Pollution and Mortality:
Results from a Study of Santiago, Chile. Journal of Exposure Analysis and Environmental
Epidemiology. 6(1): 97-114.

ICF Marbek

A-1

Steib, D.M, P. De Civita, F.R. Johnson, M.P. Manary, A.H. Anis, R.C. Beveridge and S. Judek
(2002). Economics Evaluation of the Benefits of Reducing Acute Cardiorespiratory Morbidity
Associated with Air Pollution. Environmental Health: A Global Access Science Source. 1(7).
Accessed
on
January
10th
2011
from
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC149396/pdf/1476-069X-1-7.pdf.
Stieb D.M., R.C. Beveridge, M. Smith-Doiron, R.T. Burnett, S. Judek, R.E. Dales and A.H. Anis
(2000). Beyond Administrative Data: Characterizing Cardiorespiratory Disease Episodes Among
Patients Visiting the Emergency Department. Canadian Journal of Public Health 91:107- 112
Ungar, W.J., P.C. Coyte, K.R. Chapman, L. MacKeigan and the Pharmacy Medication Monitoring
Program Advisory Board. (1998). The Patient Level Cost of Asthma in Adults in South Central
Ontario. Canadian Respiratory Journal 5(6):463-471.
United States Environmental Protection Agency (n.d.). The Cost of Illness Handbook. Accessed
on February 14th 2011 from http://www.epa.gov/oppt/coi/pubs/toc.html
Zeghnoun, A., P. Beaudeau, F. Carrat, V. Delmas, O. Boudhabhay, F. Gayon, D. Guincètre and P.
Czernichow (1999). Air Pollution and Respiratory Drug Sales in the City of Le Havre, France,
1993-1996. Environmental Respiratory Section A 81(3):224-230.

ICF Marbek

A-2

Appendix B
al., 2002)

Cost of Treatment Model (Steib et

Steib et al. (2002) provide information on variable description and the model.

ICF Marbek

B-1

Appendix C

Patient Cost Estimator Estimates

Exhibit 20 Patient Cost Estimator Results for Ontario for Three Respiratory Illnesses (20082009, CIHI (2010c))
Case Mix Group (CMG)

139

Chronic
Obstructive
Pulmonary
Disease

141

Upper/Lower
Respiratory
Infection

147

Asthma

Age Group Metrics
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)

Estimated
Estimated Average
Average
Average Cost Cost (all Age Groups) Acute LOS Volume
$3,792
$6,561
2.3
**
$3,914
$6,561
4.0
**
$3,716
$6,561
5.0
**
$6,317
$6,561
5.5
2,561
$6,305
$6,561
6.4 10,813
$7,097
$6,561
7.0
6,350
$3,552
$3,592
2.7
1,947
$3,028
$3,592
2.1
827
$3,734
$3,592
2.7
27
$3,956
$3,592
3.6
145
$4,338
$3,592
4.2
233
$4,877
$3,592
5.4
244
$2,250
$2,470
2.0
281
$1,996
$2,470
1.7
2,448
$2,094
$2,470
2.0
521
$2,837
$2,470
3.0
1,350
$3,660
$2,470
4.3
476

Source: CIHI (2010c)

Exhibit 21 Patient Cost Estimator Results for Alberta for Three Respiratory Illnesses (20082009)
Case Mix Group (CMG)

139

Chronic
Obstructive
Pulmonary
Disease

141

Upper/Lower
Respiratory
Infection

147

Asthma

ICF Marbek

Age Group Metrics
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)

Estimated
Estimated Average
Average
Average Cost Cost (all Age Groups) Acute LOS Volume
$5,323
$6,934
2.0
**
$10,369
$6,934
6.0
**
$6,304
$6,934
6.2
719
$6,897
$6,934
7.2
2,742
$7,305
$6,934
7.9
1,464
$5,030
$4,551
3.3
1,045
$3,423
$4,551
2.5
409
$4,497
$4,551
2.3
26
$3,652
$4,551
3.5
98
$4,693
$4,551
4.5
85
$5,060
$4,551
5.6
76
$2,490
$2,821
2.1
44

C-1

Case Mix Group (CMG)

Age Group Metrics
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)

Estimated
Estimated Average
Average
Average Cost Cost (all Age Groups) Acute LOS Volume
$2,274
$2,821
1.8
544
$2,526
$2,821
2.3
172
$3,388
$2,821
3.4
343
$4,232
$2,821
5.2
69
$4,982
$2,821
6.8
33

Source: CIHI (2010c)

Exhibit 22 Patient Cost Estimator Results for British Columbia for Three Respiratory Illnesses
(2008-2009)
Case Mix Group (CMG)

139

Chronic
Obstructive
Pulmonary
Disease

141

Upper/Lower
Respiratory
Infection

147

Asthma

Age Group Metrics
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)
29-364 Days (Paediatric)
1-7 Years (Paediatric)
8-17 Years (Paediatric)
18-59 Years (Adult)
60-79 Years (Adult)
80+ Years (Adult)

Estimated
Estimated Average
Average
Average Cost Cost (all Age Groups) Acute LOS Volume
$3,844
$5,960
2.5
**
$3,479
$5,960
1.0
**
$5,177
$5,960
5.4
903
$5,968
$5,960
6.7
3,622
$6,278
$5,960
7.6
2,154
$3,527
$3,498
2.8
772
$3,015
$3,498
2.5
311
$2,817
$3,498
1.8
11
$3,023
$3,498
3.7
76
$4,059
$3,498
4.7
109
$4,602
$3,498
6.2
100
$2,044
$2,407
2.2
74
$1,821
$2,407
1.7
540
$1,952
$2,407
2.1
100
$2,785
$2,407
2.8
398
$3,408
$2,407
4.1
164
$3,918
$2,407
5.4
49

Source: CIHI (2010c)

ICF Marbek

C-2

Appendix D
Annual Cardiovascular and Respiratory Morbidity
Impacts due to Climate-Induced Increases in Ozone Concentrations
Exhibit 23 Annual Cardiovascular and Respiratory Morbidity Impacts due to Climate-Induced Increases in Ozone Concentrations
Annual
cases 2020s

Acute
Respiratory
Symptom
Days
Asthma
Symptom
Days
Minor
Restricted
Activity
Days
Respiratory
Emergency
Room
Visits**
Respiratory
Hospital
Admissions

Toronto
A2

Montreal
B1

A2

Calgary
B1

Vancouver

A2

B1*

A2

B1*

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

324,089

334,892

280,810

290,170

240,456

248,471

203,961

210,759

61,699

63,756

61,699

63,756

197,978

204,577

197,978

204,577

47,826

49,420

41,424

42,805

35,494

36,677

30,093

31,096

9,103

9,406

9,103

9,406

29,256

30,231

29,256

30,231

29,858

30,853

25,867

26,730

22,155

22,893

18,789

19,416

5,684

5,873

5,684

5,873

18,247

18,855

18,247

18,855

102

106

89

92

81

83

69

72

18

18

18

18

65

67

65

67

34

35

29

30

27

28

23

23

6

6

6

6

21

22

21

22

* For these scenarios, the B1 temperature signals indicated higher temperature changes than the associated A2 temperature signals. This was due
to unusually high mean temperatures for winter months in the GCM model output data. As it was considered not intuitively likely that SRES B1
scenario have faster warming than the SRES A2 scenario, B1 temperature changes were considered equal to those of the A2 temperature changes,
for this time period only. These anomalies were not observed in future time periods.

ICF Marbek

D-1

** In the original report, Respiratory Hospital Admissions were included in the total of Respiratory Emergency Room Visits. For our purposes, we
need to net out the Respiratory Hospital Admissions from Respiratory Emergency Room Visits.

Annual
cases 2050s
Acute
Respiratory
Symptom Days
Asthma
Symptom Days
Minor
Restricted
Activity Days
Respiratory
Emergency
Room Visits**
Respiratory
Hospital
Admissions

Toronto
A2

B1

Calgary

A2

B1

Vancouver

A2

B1

A2

B1

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

730,786

817,151

502,656

562,061

551,003

616,121

387,643

433,456

132,266

147,898

95,155

106,400

347,683

388,773

286,638

320,513

108,161

120,944

74,263

83,040

81,594

91,237

57,297

64,068

19,569

21,881

14,057

15,718

51,513

57,601

42,418

47,431

67,389

75,353

46,326

51,800

50,819

56,824

35,731

39,954

12,195

13,637

8,769

9,806

32,072

35,862

26,431

29,554

232

260

160

179

187

208

131

147

38

43

27

31

114

127

93

105

76

85

52

58

61

69

43

48

13

14

9

10

37

42

31

34

Annual
cases 2080s
Acute
Respiratory
Symptom Days
Asthma
Symptom Days
Minor
Restricted
Activity Days
Respiratory
Emergency
Room Visits**
Respiratory
Hospital
Admissions

Montreal

Toronto

Montreal

A2

B1

Calgary

A2

B1

Vancouver

A2

B1

A2

B1

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

LS

WM

1,434,069

1,594,283

766,124

851,715

1,084,196

1,205,322

576,714

641,144

238,640

265,301

137,459

152,816

595,772

662,332

383,819

426,699

213,042

236,843

113,313

125,972

161,200

179,209

85,334

94,867

35,412

39,368

20,326

22,596

88,542

98,433

56,842

63,192

132,398

147,189

70,632

78,523

100,123

111,309

53,177

59,117

22,024

24,485

12,672

14,088

55,010

61,156

35,400

39,355

457

507

243

270

367

409

195

217

69

77

40

45

195

217

125

139

149

166

80

89

121

134

64

71

23

25

13

14

64

71

41

46

ICF Marbek

D-2

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Ottawa, Ontario, Canada K2P 2G3
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Fax: +1 613 523-0717

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