Productivity Losses due to Morbidity and Premature Mortality of Individuals with Fetal Alcohol Spectrum Disorder in New Zealand

Brian Easton, Larry Burd, Jürgen Rehm, and Svetlana Popova

Abstract

Aim To estimate the productivity losses due to morbidity and premature mortality of individuals with Fetal Alcohol Spectrum Disorder (FASD) in New Zealand (NZ).

Methods A demographic approach with a counterfactual scenario in which nobody in NZ is born with FASD was used. Estimates were calculated using data for 2013 on the population of NZ, the labour force, unemployment rate, and the average weekly wage, all of which were obtained from Statistics NZ.

In order to estimate the number of FASD cases in 2013 and the related morbidity, the prevalence of FASD, obtained from the available epidemiological literature, was applied to the general population of NZ. Assumptions made on the level of impairment that would affect the ability of individuals with FASD to participate in the workforce or reduce their productivity were based on data obtained from the current epidemiological literature.

Results Around 0.03% of the NZ workforce experiences a loss of productivity due to FASD-attributable morbidity and premature mortality, which translates to aggregate losses ranging from $NZ69 million to $NZ200 million in 2013. This amounts to between 0.03% and 0.9% of annual GDP.

These costs represent estimates for lost productivity attributable to FASD and do not include additional costs incurred by governmental and private entities including social costs, such as both higher costs and or less effective spending by the education, health and justice systems.

Conclusion The estimates of productivity losses further reinforce the value of FASD prevention as a primary public health strategy.

Text

Across the world, alcohol is the fifth leading contributor to disability and mortality. Alcohol accounted for over 5% of worldwide mortality and for nearly 4% of disability adjusted life years.1 Furthermore, alcohol consumption often results in harm, not only to the drinker, but also to individuals associated with the drinker. One example of such harm is the harm caused by drinking during pregnancy. Prenatal alcohol consumption is an established cause of Fetal Alcohol Spectrum Disorder (FASD). While no safe level of alcohol exposure during pregnancy has been identified, it is widely accepted that heavy drinking seems to confer the greatest risk of FASD.2,3 Among individuals diagnosed with FASD, prenatal alcohol exposure results in a highly variable expression of adverse outcomes, the term encompasses a group of disorders where alcohol exposure can affect any organ system.3

FASD is comprised of four categorical disorders: Fetal Alcohol Syndrome (FAS), Partial FAS (pFAS), Alcohol-Related Neurodevelopmental Disorder (ARND) and Alcohol-Related Birth Defects (ARBD).3,4 The FASD phenotype is variably expressed and comorbidities are common.3,5,6,7,8,9,10 These are highly variable disorders with age and development dependent changes in phenotype.11,12 However, FASD is considered as a ‘hidden’ disability and a complex diagnosis.13 Damage to the central nervous system is a unifying concept for nearly all of the FASD diagnoses.4,12,14,15

Although no research has confirmed the prevalence of FASD in New Zealand, it is generally taken that the prevalence is approximately 1% of live births, which is reported in multiple prevalence studies.16,17,18 More recent prevalence studies have reported prevalence rates well above 1% of live births in some locations across the world using a screening protocol for school-age children.19 Also, high risk populations with higher drinking rates have increased likelihoods of alcohol-exposed pregnancies.20,21 These rates are well above prevalence rates for autism spectrum disorder or Down syndrome .22

In a recent review of mortality in individuals with FASD, the two leading causes of death were malformations of the central nervous system and congenital cardiac abnormalities. The three other leading causes of death were sepsis, kidney malformations and cancer.23 This study also revealed that over half of the reported deaths (54%) occurred in the first year of life. Other studies have demonstrated that FASD is associated with a vast number and wide range of health and behavioural problems including increased premature mortality rates compared to the general population.3,5,6,7,8,9,24

The phenotype for FASD is highly variable and as affected people age, the rates of comorbidity tend to increase which increases phenotype complexity and severity.6

Because of difficulties ‘fitting into’ mainstream life, the attempted suicide rate is reported to be higher among persons with FASD (22%) as compared to the rate of the general US adult population (3%), and among persons with intellectual disabilities (8%).25

Thus, since FASD begins in the prenatal period, the disorders cause a large burden of lifelong duration on society. The costs change across age groups and only recently have costs incurred by adolescents and adults been considered.  The costs in this age group are incurred primarily through the health care system, mental health and substance abuse treatment services, criminal justice system, and the long-term care of individuals with intellectual and physical disabilities.2,3,26,27,28,29,30,31,32,33,34,35,36,37,38

A significant portion of the societal economic burden from FASD results from lost productivity and decreased participation in the workforce including that resulting from early mortality. Surprisingly, given its significance, the existing cost estimates of FASD have neglected to examine the productivity losses caused by reduced participation in the workforce .27,30,39,40,41

FASD has not yet emerged as a public health priority in New Zealand although the Ministry of Health is paying more attention to it. Canada already has placed importance on this issue.17,26,31,32,33,34,35,36,37,38,42,43 The Canadian approach is due in part to the recognition of the costs associated with the care and services required by individuals with FASD, but also due to the increased awareness of the potential to reduce these costs by implementing effective prevention programs.40 Prevention efforts need to focus on reducing the number of affected individuals, the severity of the resulting impairments, and the premature mortality due to prenatal alcohol exposure.6,8,26 These efforts could be accomplished by eliminating prenatal alcohol exposure or, at the very least, by reducing the number of women who drink heavily during pregnancy.

The purpose of this study was to estimate the productivity losses of individuals with FASD due to morbidity and premature mortality as one aspect of the total costs of FASD in New Zealand.

Method

The Counterfactual Scenario All cost estimates involve a counterfactual scenario, which compares the actual state of affairs with an alternative one, the costs reflecting the economic differences between them valued at appropriate prices.

This report adopts a counterfactual scenario in which no individual in the population was born with FASD. It uses the ‘demographic’ method,44 and focuses only on the impact of market production (the productivity loss) from the morbidity and premature mortality of individuals with FASD.

This counterfactual scenario was chosen because it is readily understandable and because it and its consequential estimation method involves fewer – often contentious – assumptions. It avoids some of the issues, which bedevil the estimation of social costs such as how to deal with inflation, economic change and time discounting. It produces a spot estimate for a particular year (2013) as the result of effects back through time, instead of the outcome through time (possibly discounted to a single aggregate) of the effects in a particular year. A consequence of this particular counterfactual is that the total will vary through time as a result of economic and population change, and it takes into consideration the business cycle (unemployment) and price changes (inflation). However in the medium term these will not change the order of magnitude.

An alternative approach to the ‘demographic’ approach is the ‘human’ capital one, which would be more applicable if the alternative scenario involved a phasing out of FASD (say as an effective prevention program was introduced over time). In effect the counterfactual scenario used here assumes an effective program was introduced many decades ago; the estimate represents the long-term equilibrium. It may be taken as an indication of the eventual long term productivity gains from effective prevention.

Population estimates of individuals with FASD New Zealand data on population of the labor force, unemployment rate, and the average weekly wage were obtained from Statistics New Zealand for the most recent available year (i.e., 2013).45

For the purpose of this analysis, three groups of individuals with: 1) Fetal Alcohol Syndrome (FAS; the most recognisable form of FASD); 2) other-FASD (pFAS, ARND and ARBD); and 3) FASD overall (FAS, pFAS, ARND, and ARBD) were analysed separately.

In order to estimate the number of individuals with FAS and other-FASD, the most commonly cited prevalence of FAS (0.1%)17 and FASD (0.9%)18 in North America was applied to the general population of New Zealand in 2013.

All cost figures are presented in New Zealand dollars for the 2013 year.

Severity levels of intellectual impairment attributable to FASD As described in Easton et al.,45 population estimates of individuals with FASD can be stratified by the severity levels of intellectual impairment attributable to FASD, in order to account the impact of the severity on the level of participation in the workforce and productivity of individuals with FASD. Please note that the disabilities attributed to birth defects, vision or hearing problems or any other physical disabilities were not accounted.

The individuals with FAS and with other-FASD will have multiple areas of brain impairment when measured on standardised tests.  For the purposes of this study, the relevant impairment will be represented by the domain of intellectual impairment.  The individuals with FASD can be classified into four groups according to severity level of impairment.47

            1) Broad cognitive impairment (does not meet criteria for intellectual disability). The term minimal brain dysfunction (MBD) has also been used previously to describe this population. This category might include individuals with learning disabilities, speech and language disorders, attention deficit hyperactivity disorder, and other similar disorders.

            2) Mild intellectual disability. Previously known as mild mental retardation and includes individuals with an Intelligence Quotient (IQ) and adaptive behaviour scores between 50-75. Individuals under this category can often acquire academic skills up to the 6th grade level. They can become fairly self-sufficient and in some cases live independently, with episodic or ongoing community and social supports.

            3) Moderate intellectual disability. Individuals who have an IQ and adaptive behaviour score of 35-49. They can typically carry out work and self-care tasks with ongoing supervision at moderate levels. They typically acquire communication skills in childhood and are able to live and function successfully within the community in a staffed and supervised environment such as a group home.

            4) Severe intellectual disability. Individuals with an IQ and adaptive behaviour score below 35. Such individuals may master very basic self-care skills and some communication skills. Their intellectual disability is often accompanied by neurological disorders, and they most commonly require continuous supervision, assistance and high levels of structure.

The distribution of the levels of mental impairment severity among individuals with other-FASD was assumed to be the same as that for individuals with FAS [50% with broad cognitive impairment; 33% with mild intellectual disability; 12% with moderate intellectual disability; and 5% with severe intellectual disability.

Further, it was assumed that 100% of individuals with FAS are impaired and only about 25% of individuals with other-FASD are impaired. As a result, it was assumed that these individuals would have different levels of reduction in productivity due to their intellectual impairment.

The percent reduction in productivity of individuals with FAS and other-FASD was adapted from Harwood et al.47 and modified based on experts’ opinion.

Mortality As described above, individuals with FASD have higher mortality. The effects can be measured by using cause-of-death data combined with a pooled prevalence estimates of the major disease conditions associated with FASD obtained from a recent meta-analysis conducted by Popova and colleagues.10 For a detailed methodology on estimation productivity losses due to premature mortality of individuals with FASD please see Easton et al.48

However it is unnecessary to add a separate assessment for the purposes of this paper. Assuming that the rates at birth are the ones assumed (i.e. 1 percent of the cohort), then the rates in the labour force will be smaller (because of the higher mortality rate). The counterfactual requires the addition of those who die to the labour force. Subject to a very small effect, this is equivalent to assuming that the rate for the labour force is the same as the rate for the birth effect. Ignoring this small difference means the estimates provided here are slightly on the conservative side.

Results

Population estimates of individuals with FASD Using data on the general population in New Zealand – 4.43 million in 2013 and assuming a prevalence of 0.1% for FAS and 0.9% for other-FASD, the number of individuals with FASD was estimated as follows: 4,400 individuals with FAS, 39,900 with other-FASD, for a combined total of 44,300 individuals with FASD in New Zealand in 2013 (Table 1).

– Please insert Table 1 about here –

Approximately 54.4% (2.41 million) of New Zealand’s general population participated in the paid labour force in 2013. By applying this percentage to the number of individuals with FASD, it was estimated that about 24,100 individuals with FASD were in the New Zealand labour force in 2013. Based on the assumption that all individuals with FAS and 25% of individuals with other-FASD have some level of intellectual impairment, it was estimated that 7.800 individuals with FASD who are in the work force have decreased productivity (Table 2).

– Please insert Table 2 about here –

Productivity losses of individuals with FASD due to morbidity It was assumed that the level of intellectual impairment was directly related to the magnitude of productivity losses of individuals with FASD. Table 2 presents the proportions of individuals with FASD by the levels of intellectual impairment, as well as the lower and upper boundary for their percent reduction in productivity by categorical level of impairment. In order to estimate a weighted average of the lower (24%) and the upper (50%) boundaries, the percent reductions in productivity were combined across severity levels and weighted by the number of individuals in each respective group (Table 2).

Since 6.2% of the labour force was unemployed, the estimated loss of productivity by the effective workforce was applied to only 93.8% of those with FASD who were assumed to be in the labour force (the workforce equals the labour force minus? those unemployed).

Estimating the effect of the counterfactual scenario of no FASD in New Zealand If there were no cases of FASD in New Zealand (the counterfactual scenario), then the effective workforce would increase by the equivalent of 1,760 to 3,660 workers (these numbers are derived by applying a weighted average of reduction in productivity (24% and 50%; Table 2) to the number of individuals with FASD with compromised productivity within the workforce– i.e. the labour force minus? the unemployed: about 7,300 people (Table 1). The additional (effective) workers represent a boost to the workforce of 2.26 million individuals in 2013, which account for an increase in the New Zealand workforce between 0.08% and 0.16% (if, as the counterfactual scenario posits, there were no cases of FASD in New Zealand) (Table 3).

– Please insert Table 3 about here –

Estimated value of the productivity losses of individuals with FASD due to morbidity The estimates of productivity losses resulting from decreased labour force participation can then be converted into dollar value by multiplying the effective reduction in the number of participating workers with FASD by their marginal dollar product. The standard assumption is that a worker’s marginal product is comparable to the average wage.44

The average weekly wage (ordinary plus overtime) in New Zealand was $1,066, which is equivalent to $55,600 per year. However, it could be argued that the average worker with FASD comes from a more socially deprived background with a lower average wage than a typical member of the labour force. In order to provide the most conservative estimate, it was assumed that, as a ‘low’ estimate, the actual wages for a person from a background that generates FASD is 29% lower than average, or $39,500 annually. This discount was calculated by noting that the New Zealand minimum wage is approximately 42 percent of the average wage, and by taking the midpoint between the two (71% of the average wage).. This amounts to an average annual reduction of $3.200 to $9.230 for each worker with FASD (including those unemployed). This represents 7.8% to 16.2% of the wages they would earn if they did not have FASD. When this wage is applied to the difference in the effective workforce, the estimated national income of New Zealand would increase between $69 million and $200 million, if New Zealand had no cases of FASD.

Discussion

Conservatively, around 0.03% of the New Zealand workforce experiences a loss of productivity due to FASD-attributable morbidity and premature mortality. This markedly reduces their remuneration and, consequently, the overall productivity of the New Zealand economy. The immediate effect of FASD-attributable morbidity and premature mortality is confined to a small proportion of the population; the estimated aggregate loss ranged from $69 million to $200 million in New Zealand in 2013.

These estimates of productivity losses due to morbidity and premature mortality attributable to FASD are, by design, equally conservative in terms of the total social costs of FASD. They do not include the additional productivity losses of those caring for individuals with FASD who are unable to work in the paid labour force due to their caregiving or from inefficient or otherwise unnecessary expenditure in the education, health or justice systems. Without these cost pressures from FASD, these resources could be diverted to other areas of private and public spending in order to benefit New Zealand as a whole.

Policy makers could utilize the estimates of productivity losses due to FASD-attributable morbidity and premature mortality in order to evaluate the potential benefits of FASD prevention programs. An effective prevention effort to eliminate FASD in New Zealand which costs less than $20 million a year would produce an economic benefit from productivity gains alone, over the long term. However, the benefits would not accrue in total immediately, because the newly born do not immediately enter the workforce. Prevention efforts need to include reducing the severity of the resulting impairments of those born with FASD, and the premature mortality due to prenatal alcohol exposure.

While these estimates likely underestimate both the total actual costs of FASD and the potential cost savings from effective prevention efforts, there is some level of confidence that the estimates of the aggregate productivity losses from FASD are within the correct range.

In terms of the productivity losses alone, New Zealand could ultimately spend up to $190,000 per day on an effective prevention program to prevent new cases of FASD. However the benefit to cost ratio would be considerably higher than 1, because of the reduced (or more effective) spending in other parts of the economy such as reduced health related costs, cost reductions in special education, and reduced burden on corrections systems..43,49,50,51,52

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Table 1.Model parameters for the calculation of productivity losses due to FASD-attributable morbidity and premature mortality in New Zealand 2013

<> Parameters Number of individuals Source Total population in New Zealand 4.43 Million Statistics NZ Population participating in paid labour force in NZ (54.2%) 2.41 Million Statistics NZ Population with FAS (0.1% of the total population of NZ) 4400 PHAC, 2003 Population with other-FASD (0.9% of the total population of NZ) 39900 Roberts and Nanson, 2000 Population with FASD (1% of the total population of NZ) 44300   Population with FAS participating in paid labor force (54.4% of the total population with FAS) 2400   Population with other-FASD participating in paid labor force (54.4% of the total population with other-FASD) 21700   Population with FASD participating in paid labor force (54.2% of the total population with FASD) 24100   Compromised productivity of the workforce with FAS (100% of the population with FAS participating in paid labor force) 2.4 Expert opinion Compromised productivity of the workforce with other-FASD (25% of the population with other-FASD participating in paid labor force) 5400 Expert opinion Compromised productivity of the workforce with FASD (sum of population with FAS and other-FASD participating in paid labor force with compromised productivity) 7800  

FAS: Fetal Alcohol Syndrome

FASD: Fetal AlcoholSpectrum Disorder

Statistics New Zealand from Infoshare: http://www.stats.govt.nz/infoshare/50

Table 2. Percentage and number of individuals with FAS and other-FASD by level of intellectual impairment and their percentage of reduction in productivity in New Zealand in 2013.

<> Impairment Category Percentage of individuals with FAS and other-FASDa,b Estimated number of individuals with FAS and other-FASD in New Zealand Percentage reduction in productivity of individuals with FAS and other-FASD Lower Boundary c Percentage reduction in productivity of individuals with FAS other-FASD Upper Boundary d Broad cognitive impairment 50% 3900 10% 40% Mild intellectual impairment 33% 2575 25% 50% Moderate intellectual impairment 12%  935 50% 70% Severe intellectual impairment 5% 390 100% 100% Total   7.,800     Weighted Average     24% 50%

FAS: Fetal AlcoholSyndrome

FASD: Fetal AlcoholSpectrum Disorder

aEstimated based on expert opinion (Drs. Larry Burd and Albert Chudley)

bAssumption was used that 100% of individuals with FAS are intellectually impaired and only about 25% of individuals with other-FASD are intellectually impaired (Dr. Albert Chudley, expert opinion)

cBased on Harwood et al. (1984)

dEstimated based on expert opinion (Drs. Larry Burd and Albert Chudley)

Table 3.Model of potential increases in wages using a counterfactual scenario (no one is born with FASD) in New Zealand 2013

<>   Lower Boundary Upper Boundary Equivalent number of productivity-compromised individuals with FASD in labour force 1880 3840 Equivalent number of productivity-compromised individuals with FASD in work force (i.e. allowing for unemployment) 1760 3600 Average annual wage in relevant population of New Zealand $39,480 $55,660 Loss of annual income per person with FASD in labour force $3,200 $9,230 Loss of annual income per productivity-compromised person with FASD in labour force $9,850 $2,840 Productivity losses due to FASD-attributable morbidity and premature mortality  (additional economy-wide income) $69 Million $200 Million

FASD: Fetal Alcohol Spectrum Disorder

Lower bound based on weighted average reduction in productivity of 24%; upper bound 50%

Numbers are rounded