The Cost of Suicide in New Zealand Introduction This paper provides a monetary value on the cost of suicide to New Zealand, by: considering the usefulness of ‘cost of suicide’ calculations to policy development providing an update of the cost of suicide, building on an earlier report by Des O’Dea and Sarah Tucker (2005) The Cost of Suicide to Society critiquing the methodology of cost of suicide calculations providing examples of how cost of suicide calculations have been used to inform the analysis and development of international suicide prevention initiatives. Background The cost of suicide is based on an analysis of the costs arising from suicides and intentional selfharm incidents. Number and rates of suicide A total of 508 people died by suicide in New Zealand in 2013 (365 were male and 143 female).1 This equates to an age-standardised rate of 11.0 deaths per 100,000 population. Between 2004 and 2013, suicide rates have ranged from 10.9 to 12.2 deaths per 100,000. 1 The most recent year for which full data is available. The cost of suicide in New Zealand 1 Figure 1: Numbers and rates of suicide, 2004–2013 Intentional self-harm hospitalisations in 2013 In 2012 there were 7267 intentional self-harm hospitalisations. Seventy percent of these were female. The data below shows a significant increase in self-harm hospitalisations in 2013. However the data is not comparable due to a change in reporting methodology in 2013. Before 2013 self-harm hospitalisations generally only included those who were admitted to hospital (ie, excluding those treated in emergency departments only). In 2013, the self-harm hospitalisation data includes not only those who were admitted to hospital but also those who were seen in an emergency department. Table 1: Intentional self-harm hospitalisation numbers, by sex, 2003–2013 Year Male Female Total 2003 1,048 2,093 3,141 2004 982 2,018 3,000 2005 953 1,790 2,743 2006 991 1,878 2,869 2007 940 1,746 2,686 2008 877 1,591 2,468 2009 947 1,592 2,539 2010 990 1,835 2,825 2011 940 1,708 2,648 2012 1,011 2,020 3,031 2013 2,225 5,042 7,267 Source: New Zealand National Minimum Dataset 2 The cost of suicide in New Zealand Valuing the ‘cost of suicide’ to New Zealand Studies on the costs of injury such as suicide have been around for a number of years. Such studies are used to inform resource allocation decisions. For policy purposes, the calculation of suicide costs puts a monetary value on these events. This value can be used to compare costs of suicide and self-harm hospitalisations, and assess the relative benefits of proposed investments. The government has finite resources for investment across a range of areas, which drives the need to make trade-offs between spending priorities. The factors that influence decision making include: evidence of the intervention’s effectiveness; the estimated benefits that will be achieved; and the cost of interventions. There are many reasons for investing in suicide prevention, including the humanitarian desire to prevent pain and suffering, and moral imperatives about preventing loss of life. Economic analysis of the ‘cost of suicide’ attempts to place values on these non-economic factors, but because they are intangible or value driven, placing a monetary value on these can be difficult. The ‘Cost of Suicide’ calculations carried out in this report can be used alongside evidence of what interventions work, to help illustrate the estimated ‘return on investment’ of prospective investments in suicide prevention activities. Update of ‘Cost of Suicide’ The most recent review of the economic costs of suicide in New Zealand was done by O’Dea and Tucker (2005) Cost of suicide to society. They estimated that the total economic and non-economic cost from suicides and attempted suicides was $1,381 million. The 2005 analysis of economic costs is based on 460 suicides and 5,095 attempted suicides in 2002.This update uses 2013 data, which is the most recent available data. In 2013 there were 508 suicides and 7,267 intentional self-harm hospitalisations. Costing methodology used to calculate ‘Cost of Suicide’ in New Zealand Costs outlined in this report are classified as broadly: Economic costs – Costs excluding lost production – these are the direct costs of a suicide or self- harm hospitalisation. They include the cost of a funeral, ambulance and police involvement, the coronial process and victim support. – Cost of lost production – these are indirect costs associated with the loss of a person from the current or future workforce. These are a measure of the opportunity costs in the form of forgone benefits borne by society. The cost of suicide in New Zealand 3 Non-economic costs The non-economic costs of a suicide death or self-harm attempt include psychological distress, impaired physical or mental health, pain and suffering, and loss of employment and quality of life. They reflect the loss of life years and disability-free life years. These costs are often subjective and very difficult to quantify because people place different values on these costs. In New Zealand, one mechanism that puts a monetary value on these non-economic costs is the ‘Value of a Statistical Life’ (VOSL). The VOSL was $3.85 million per fatality at June 2013 prices.2 While the VOSL is updated on a yearly basis, we have used the June 2013 VOSL as the most recent suicide data is from 2013. This update of the cost of suicide has attempted to use the costing methodology and base information obtained by O’Dea and Tucker as a starting point. We have not done an extensive review of all the cost inputs and assumptions that were used in the 2005 analysis. Instead, we have adjusted cost of services to 2015 real values using a CPI inflation multiplier. The noneconomic costs are calculated using the O’Dea and Tucker values as a base, with a multiplier applied to these values to reflect movement in the value of a life since 2004. Table 2: Economic cost of suicides Suicides Costs excluding lost production 2002 2013 $4,694,000 $6,635,496 Costs of lost production $201,498,000 $244,250,972 Total $206,192,000 $250,886,468 $448,250 $493,871 Cost per suicide Table 3: Economic cost of attempted suicides Attempted suicides 2002 2013 Costs excluding lost production $19,092,000 $34,852,532 Costs of lost production $13,247,000 $21,801,000 Total $32,339,000 $56,653,532 $6,350 $7,796 Cost per suicide attempt Note: from 2013 onwards attempted suicides included both the self-harm admissions to an emergency department and hospitalisations. In 2012 and earlier years attempted suicide data was based on those admitted beyond emergency departments to hospitals. Table 4: Overall economic costs Overall economic costs (suicide + suicide attempts) 2002 2013 $238,531,000 $307,540,000 Table 5: Non-economic costs 2002 Value of years of disability-free life lost Cost per suicide 2 4 2013 $1,142,400,000 $1,638,000,000 $2,483,000 $3,224,409 The VOSL comes from the Ministry of Transport (2014) Social Cost of Road Crashes and Injuries 2014 update. The cost of suicide in New Zealand Table 6: Total costs of suicide 2002 Economic costs 2013 $238,531,000 $307,540,000 Non-economic costs $1,142,400,000 $1,638,000,000 Total cost $1,381,492,000 $1,945,540,000 The costings above are based on a number of assumptions (outlined in Annex A). A detailed breakdown of how the economic costs and the non-economic costs are calculated is provided in Annex B and C. While the calculations are not as precise as those of O’Dea and Tucker (2005), and the cost fluctuates markedly from year to year with the rate of suicide and self-harm attempts, the cost is broadly around $2.0 billion per annum (if incidence of suicide and attempts remain near 2013 figures). Methodological issues with ‘cost of suicide’ calculations There are some difficulties in expressing the cost of suicide in monetary terms. Issues with data collection and measurement While the services associated with suicide can generally be identified, there are issues around how to measure the cost of these services. For instance, should the costs just be the marginal costs of services responding to a suicide (eg, police, ambulance) or should it include an allowance for overhead costs such as salaries, depreciation, capital costs. The costings in this report use the marginal costs of these services. Calculations of cost of lost production There are also issues around how to best measure the cost of lost production. One approach used in this report (and by O’Dea and Tucker) is to use the average market income at different age groups of people who die from suicide. These values are expressed in present value terms, discounted over what would have been their expected remaining life if they had not died from suicide. This can determine a lifetime’s lost earnings. This measure of a lifetime’s lost earnings is used to estimate lost production values. For suicide attempts, O’Dea and Tucker used self-harm data and assumed that people would be off work for a period of time. Allowances were also made for disruptions to work for family and friends of the person. Determining values for non-economic costs Non-economic costs reflect the costs of pain and suffering that are incurred as a result of a suicide or suicide attempt. These non-economic values attempt to quantify how much society is willing to pay to avoid this pain and suffering. The cost of suicide in New Zealand 5 Disability Adjusted Life Years (DALYs) provide a mechanism of quantifying the impact of suicide in terms of disability adjusted life years. O’Dea and Tucker (2005) then take the DALYs and express these DALYs in monetary terms using the VOSL. The methodology used for non-economic costs assumes that all life years lost are of equal value. This is despite the fact there is some evidence, including by O’Dea (2004) that this is not correct. However it would be impractical to try to place different values on people who have lost their life. The costing methodology used by O’Dea and Tucker (2005) also included placing a value on the DALY for suicide at different age groups. The DALYs calculated provide a measure of changes in expected longevity weighted by an index of disability or impairment, which incorporates an age weighting to life years at different ages (to distinguish condition-specific disability from age-related impairment). The VOSL calculations are not without critics. As noted by Guria (2010) trying to place a value on a life is difficult. Medical treatment costs or the value of lost production are relatively easy to count. But as Guria notes, it is both contentious and difficult to put a monetary value on the worth of avoiding a premature death or disability. The VOSL is also an estimate based on what people were prepared to pay for a reduction of a specific risk. While it is tempting to use the road transport VOSL and apply it elsewhere (as done by O’Dea and Tucker) a big question arises as to whether this is appropriate for other types of risk. There is evidence that what people are prepared to pay for a risk reduction may differ by the type of risk. For instance, the Health and Safety Executive in the UK recommends use of a higher VOSL for prevention of a cancer death than the transport VOSL, to take into account ‘the protracted period of pain and suffering’ associated with the disease. Suicide could in some situations be a ‘cost saving’ There can also be significant difficulties in estimating long-term costs, such as a disability incurred that may have resulted from a suicide attempt. There are also situations where suicides could result in some savings. While any suicide is a tragedy, there could be situations where a suicide could represent a cost saving. Lester and Yang (2010) argue that suicides may, in fact, provide an economic benefit to our nation. Premature deaths would certainly help us avoid expenditure on medical conditions or other areas of expenditure such as pensions, and nursing home care. Lester and Yang (2010) argue that many of those who die from suicide are often marginal members of society, and the loss of income is not as great as other scholars assume. The deaths of individuals suffering from depression eliminates the need for treatment of these individuals in later years. Those aged over 65 who die from suicide mean that the state does not have to pay national superannuation costs. When prisoners or criminals die, the state does not have to fund the costs of the criminal justice system for these individuals. At present the data does not allow for an adjustment for circumstances in which a suicide could result in offset financial costs to the government or to private individuals. Information on those who die from suicide does not record at an aggregate level whether the deceased person had long standing medical conditions, or other factors such as whether the person was in custodial care within the criminal justice system. 6 The cost of suicide in New Zealand How investments in suicide prevention programmes have generated significant economic savings The economic savings from suicides averted has been used as an input to justify investment in suicide prevention in a number of countries. The economic argument is not the only reason for such investments, as the significant impact of suicide on individuals and society (including lives saved and emotional trauma and grief avoided) is also significant. Studies that have looked into the economic benefits, relative to the costs of suicide prevention, have included: Scotland – the evaluation by Platt et al (2006) of Choose Life, Scotland’s national suicide prevention strategy concluded that a net cost saving would be achieved if five additional lives were saved each year. Scotland invested an additional £12 million over three years 2003 to 2006. The Scottish Government (2015) has reported a 17 percent reduction in suicide over 10 years between 2000-2004 and 2010–2014. Florida – an evaluation by Sari et al (2008) of two Florida prevention programmes, general suicide education and peer support programmes that were provided for college students achieved significant economic savings that were greater than the costs of the programme. The programme cost US$17.9 million for a general suicide education program and US$10.09 million for a peer support program. The calculated results are heavily influenced by the discount rate used and the attribution of results to the programmes, but estimated the programmes achieved net benefits of between US$112 million and US$109 million. Ireland – it was estimated by Kennelly (2007) that the economic cost of suicide in Ireland is estimated at over €906 million in 2001, and over €835 million in 2002 (in 2001 prices). This is equivalent to a little under 1 percent of the gross national product in Ireland for those years. Kennelly concluded that the results show that investment in health education and health promotion can be justified on the basis of the costs associated with suicide in Ireland. Conclusion The calculations of the economic return from investments in suicide prevention are highly impacted by the assumptions and methodology used for calculating the costs and benefits. Regardless of the methodology and assumptions there is a sufficient economic case for investments in suicide prevention. These investments still need to be supported by evidence of effectiveness. There is a need to be mindful that some individual situations will mean that not all investments that result in lives saved will equate to a net economic benefit. However these situations are the exception to the majority of persons who attempt suicide or die from suicide. There is still a moral imperative for investment to prevent suicide among these individuals. The cost of suicide in New Zealand 7 Bibliography Centre for Suicide Prevention. 2010. The Cost of Suicide SIEC Alert#74, June. Chisholm D, et al. 2016 Scaling-up treatment of depression and anxiety: a global return on investment analysis. The Lancet 3(5), May 2–16, pp 415–26. Clough P, Guria J, Bealing M. 2015. Approaches to Valuing Injury and Mortality Risk in Transport Assessments. NZ Transport Agency research report 571. Guria J. 2010. Fix flawed values of statistical life and life years to get better policy outcomes. Insight, NZIER. Kennelly B, 2007. The economic cost of suicide in Ireland. Crisis 28: pp 89–94. Ministry of Transport. 2013. Social Cost of Road Crashes and Injuries 2013 update. O’Dea. 2004. Who should have health-care priority? Community preferences shown by ‘ad hoc’ surveys. Seminar, Wellington School of Medicine, 29 October. O’Dea D, Tucker S. 2005. The Cost of Suicide to Society. Wellington: Ministry of Health. Platt S, et al. 2006. Evaluation of the first phase of Choose Life: the National Strategy and Action Plan to Prevent Suicide in Scotland. Rutz W, Carlsson P, von Knorring L, et al. 1992. Cost-benefit analysis of an educational program for general practitioners by the Swedish Committee for the Prevention and Treatment of Depression. Acta Psychiatrica Scandinavica 85: 457–64. Sari N, de Castro S, Newman FL, et al. 2008. Should we invest in suicide prevention programs? The Journal of Socio-Economics 37: 262–75. Scottish Government. 2015. Reduction in Suicide – rate reduces 17% in 10 years http://scottishgovernment.presscentre.com/News/Reduction-in-suicide-1c20.aspx Shepard D, et al. 2015. Suicide and suicidal attempts in the United States: costs and policy implications. Suicide and Life Threatening Behaviour 10.1111/sltb.12225. The Treasury. 2015. Budget 2016 Initiatives Process Guidance for Agencies preparing Budget Initiatives, September. Wren J, Barrell K. 2010. The Costs of Injury in New Zealand and Methods for Prioritising Resource Allocation: A background briefing paper to inform the evaluation of the New Zealand Injury Prevention Strategy. Wellington: New Zealand Injury Prevention Secretariat, ACC. Yang B, Lester D. 2010. Is there an economic argument for suicide prevention? A response to Doessel and Williams Suicidology Online 1: 88–91. 8 The cost of suicide in New Zealand Annex A: Assumptions The economic costs based on 2013 suicide and self-harm attempts are in 2015 dollars and are based on the cost of services that were revealed by O’Dea and Tucker (2005) with the Reserve Bank inflation multiplier applied to the 2002 costings. While O’Dea and Tucker went back and contacted various services such as ambulance, police, emergency departments to determine the 2002 costings, this has not been done for this update exercise, instead the 2002 costs were used with an inflation multiplier applied. Attempted suicide data is based on self- harm hospitalisations data from 2012 (which is the most recent data available).This data is incomplete as there is an unknown number of attempted suicides that do not result in hospitalisation. There is a risk that the self-harm costs are unreported in the costing analysis. It is also worth noting that not all those who have had a self-harm hospitalisation intended to die from their self-harm activity and as such this should not be counted in the cost of suicide calculations. However, as self-harm hospitalisation data is used as a proxy for the number of suicide attempts, self-harm costs are overstated in this regards. The calculation of the non-economic costs uses the June 2013 value of a statistical life of $3.85 million. This VOSL was calculated by the Ministry of Transport. While there are later updates in the VOSL (at higher levels), the June 2013 value is used due to the suicide death data being from 2013. The VOSL is applied to suicide deaths only. Due to gaps in data we are unable to apply VOSL to self-harm attempts that require hospitalisation. Some of those who have self-harmed will have ongoing permanent injuries as a result of their suicide attempt. The result is a risk that the selfharm costs are unreported in the costing analysis. The costings by O’Dea and Tucker (2005) made the following assumptions about the costs of short term absences from work. To convert these costings into 2015 dollars, a multiplier of 1.15 was used (based on movement of the Statistics NZ index for ‘Real gross national disposable income per person’ between 2004 and 2015). Table 7: Estimated costs of absence from work due to suicide or attempted suicide Estimated cost (nominal – 2005) Estimated cost (real – 2015) A person attempting suicide off work for 10 days $1300 $1500 Two family members etc of a person who attempted suicide off work for five days each $1300 $1500 Family, friends of person who died from suicide – loss of 20 working days across all friends and family $2600 $3000 It should be noted that these costings do not allow for longer periods of time spent off work, or less productivity that could occur on an ongoing basis as a result of a person having a long term disability resulting from a suicide attempt. The calculations used by O’Dea and Tucker (2005) used a range of discount rates to demonstrate the sensitivity of changes in levels of discount rates on the findings. The findings are summarised in their report. The discount rate that is used to present the cost of 2002 suicides was the 8 percent discount rate which is the rate most often used New Zealand government agencies. The cost of suicide in New Zealand 9 Annex B: Economic costs of suicide O’Dea and Tucker (2005) did an extensive analysis of the direct costs of a suicide or self-harm hospitalisation. They also provided an estimate of the Cost of lost production due to the loss of a person from the current or future workforce. These are a measure of the opportunity costs in the form of forgone benefits borne by society. An inflation multiplier has been used to update the costs in the following tables. Direct costs of a suicide The following table outlines the direct economic costs of a suicide. These costs are the costs of providing services as a result of a suicide death. In 2013 there were 508 suicides at a cost of $13,062 which resulted in total direct services costs of $6,635,496. Table 8: Economic costs per suicide, excluding lost production 3 Service Unit of measurement Police Suicide attendance Victim support $1,608 $842.67 $1,079 $100 $128 Burial (30% of deaths) $1,950 $8,320 Cremation (70% of deaths) $3,500 $6,400 Reception $650 $832 Contact $264 $338 $33.28 $42.60 negligible negligible $1,100 $1,408 $500 $640 $10,205 $13,062 Transport to morgue Travel Coroner Cost per suicide (GST exclusive) mid-2015 estimate5 $1,256.98 Mortuary/inquest attendance Funeral directors Cost per suicide (GST exclusive) mid-2004 estimate4 Forensic Post-mortem Inquest Total 3 There are some costs of suicide that are not included above due to difficulty in calculating these costs. These costs include the costs of paramedic attendance at a suicide attempt where the person subsequently dies. In some situations there could be subsequent costs to hospitals (emergency department costs, and intensive care unit costs), prior to the subsequent death. As we do not have data on the number of suicide attempts that resulted in typically short term medical attention by paramedics and hospital staff, these costs are not included in the costings above. 4 The costs of individual components in 2004 were determined following research by O’Dea and Tucker (2005). 5 The mid 2015 cost estimates are based on the cost components identified by O’Dea and Tucker expressed in 2015 dollars. A rate of 1.28 from the Reserve Bank inflation calculator was used to update the cost estimates from 2004 to 2015. 10 The cost of suicide in New Zealand Direct costs of a suicide attempt Table 9: Direct costs of suicide attempts Service Unit of measurement Police Attempted suicide $400.97 $513.24 Mental health crisis response team Attempted suicide $100.00 $128.00 Ambulance Ambulance attendance $383.27 $490.59 Emergency Department Admission $250 $320.00 Hospital health care Discharge $2,513.00 $3,216.64 Victim Support Attempted suicide $100.00 $128.00 $3,747.24 $4,796.47 Total Cost per suicide attempt (GST excl) mid-2004 estimate4 Cost per suicide attempt (GST excl) mid-2015 estimate5 In 2013 there were 7267 attempted suicides at a cost of $4,796 per attempt, resulting in total direct costs of $34,852,532. The 2013 self-harm data includes those who received medical attention at the emergency department and discharged, and also those who were admitted to hospital. The data in previous years was based only those who were admitted to hospital. Therefore 2013 data should not be compared with previous years. We have used 2013 self-harm data as it is a more accurate reflection of those who had made self-harm attempts. Lost production values The approach used by O’Dea and Tucker was to use a measure of the lost gross earnings. Where there has been an attempted suicide, a costing is used based on average hourly earnings for different age groups, for the short term absence from the workplace. For those who have died from suicide the average market income at different age groups, over their expected remaining life, is used to determine a lifetime’s lost earnings. This measure of a lifetime’s lost earnings is used to estimate lost production values. The cost of suicide in New Zealand 11 Table 10: Average market incomes by age group, June quarter 2013 Age group (years) Yearly average market income ($) 15–19 6,396 20–24 22,620 25–29 35,828 30–34 43,472 35–39 49,556 40–44 53,144 45–49 52,780 50–54 49,868 55–59 47,008 60–64 37,648 65+ 8,580 Source: NZ Income Survey June 2013 quarter The information above is used below to calculate discounted lost future market income for different age groups. The first line assumes no productivity growth each year. The second line allows for a 1 percent productivity gain each year. Table 11: Lost lifetime market income per suicide, averaged over all ages Discount rate 3% 5% 6% 7% 8% Assuming average June 2013 market income and no productivity gain $784.5 $598.1 $531.6 $477.4 $432.6 Assuming average June 2013 market income and 1% per annum productivity gain $920.5 $684.3 $601.7 $535.2 $480.8 Short spells off work The following assumptions, which were also used by O’Dea and Tucker (2005) are made about the costs related to short absences from work. Table 12: Estimated costs of absence from work due to suicide or attempted suicide Estimated cost (nominal – 2005) A person attempting suicide off work for 10 days $1300 Two family members etc of a person who attempted suicide off work for five days each $1300 Family, friends of person who died from suicide – loss of 20 working days across all friends and family $2600 12 The cost of suicide in New Zealand Table 13: Lost production estimates from suicides and attempted suicides Lost production estimates for 2002 Lost production cost estimates for 2013 Suicides 460 suicides x $438,000 per suicide (8% discount rate) Impact on Family, Friends lost production 460 x $2,600 $201,498,000 508 suicides x $480,809 per suicide (8% discount rate) $244,250,972 $1,196,000 Impact on Family, Friends lost production 508 x $3,000 $1,524,000 7267 self-harm hospitalisations at $1300 $9,447,100 7267 self-harm hospitalisations at $1500 $10,900,500 Impact on Family Friends lost production at $1300 $9,447,100 Impact on Family, Friends lost production at $1500 $10,900,500 Attempted suicides Summary of all economic costs for 2013 suicide and suicide attempts The estimated economic costs for 2013 of 508 suicides and 7267 suicide attempts in 2015 dollars, GST exclusive are as follows: Table 14: Economic costs for 2014 suicide and suicide attempts Suicides Costs excluding lost production $6,635,496 Cost of lost production $244,250,972 Total costs suicides $250,886,468 Attempted suicides Costs excluding lost production $34,852,532 Cost of lost production $21,801,000 Total costs attempted suicides $56,653,532 Total $307,540,000 The cost of suicide in New Zealand 13 Annex C: Non-economic costs of suicide O’Dea and Tucker (2005) calculated non-economic cost of suicide as $1,150,000,000. The noneconomic cost per suicide was calculated at $2,500,000 per suicide. Since 2002 there has been a 29 percent growth in the VOSL, from $2,725,000 in 2002 to $3,850,000 in 2013. In 2012, the average age of those who die from suicide was 35.6 years, and they had an average life expectancy of a further 44.2 years. In 2013, the average age of those who die from suicide was 38 years and they had an average life expectancy of a further 43.5 years. In 2002, 460 died from suicide. In 2013, 508 died from suicide. Allowing for 29 percent growth in VOSL over the years, inflating $2.5 million cost of suicide each year by 29 percent provides a $3.225 million cost per suicide in 2013. With 508 suicides, the non-economic cost is estimated to be $1,628 million. HP6587 April 2017 14 The cost of suicide in New Zealand
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