Costs related to serious injuries

Deliverable 7.3 of the H2020 project SafetyCube
Schoeters, A.; Wijnen ,W.; Carnis, L.; Weijermars, W.; Elvik, R.; Johannsen, H.; Van den Berghe, W.; Filtness, A.; Daniels, S.

SafetyCube is a European Commission supported Horizon 2020 project that aims to develop an innovative road safety Decision Support System (DSS). Work Package 7 is dedicated to serious road injuries, their health impacts and their costs. The aim of this deliverable is to discuss the costs that are related to serious road injuries. This deliverable will deal with both the cost estimations in different countries and a more detailed discussion on three cost components: human costs, medical costs and costs related to production loss.

Costs related to serious injuries consist of different cost components. Six principal cost components have been defined: medical costs, production loss, human costs, administrative costs, property damage and other costs. The components that are most relevant for serious injuries are medical costs, production loss and human costs. These costs consist of different items and there are internationally recommended methods to estimate these cost components. Furthermore, crashes with serious road injuries also induce crash-related costs, including: property damage, administrative costs and other costs. These costs contribute however to a lesser extent to the total costs related to serious injuries.

Crash cost estimates in 32 European countries (EU28 + Iceland, Norway, Serbia and Switzerland) were collected by means of a survey. The data collection was a joint effort with the InDeV project, within SafetyCube the questionnaires were integrated into a SQLite database and corrections were made. For all countries except Romania and Lithuania, some information on costs of serious road injuries was available.

The survey revealed considerable differences between countries. The individual cost per serious injury varies between €28,205 and €975,074. At a country level, the total costs related to serious injuries varies between 0.04% and 2.7% of the country’s Gross Domestic Product (GDP), and accounts for 14 to 77% of the total costs of road crashes. While the values of the cost per serious injury appear to be higher in Northern European countries and in some Eastern European countries, there was no geographical pattern when considering the total serious injury costs per country. Some of the country results might be biased by differences in the methods used for calculating the human costs, differences in the definition of a serious injury and differences in the cost components that are included. Moreover, a higher reporting rate of serious injuries (the proportion of serious injuries to fatalities) appeared to result in lower costs per serious injury. This phenomenon can be explained by the fact that a higher reporting rate of serious injuries usually implies that more injuries of a lower severity are included in the cost calculations. Regarding the effect of the number of serious injuries per inhabitant on total costs, a positive relationship was only found after removing several outliers.

The analysis confirmed that medical costs, production loss and human costs constitute the most important cost components for serious injuries. While medical costs and production loss are generally estimated using the recommended methods, not all countries take all cost items into account. Non-hospital medical costs such as emergency treatments or post-hospital care, as well as non-market production loss resulting from unpaid activities such as household work or voluntary work, are only taken into account by few countries.

Studies with data from Belgium, France, Germany, Greece and Italy reveal more detailed information on medical costs and production loss. The studies show the influence of certain characteristics of traffic victims on the level of medical costs. Age, socio-economic status, type of injury, injury severity, health status (pre-existing comorbidities) and road user type appear to have a significant influence on the medical costs attributable to a road crash. Particularly older victims and people with a worse health status at the moment of the crash have both higher acute costs (related to the initial hospital stay) and higher longer term costs (one year or more after the crash). This implies that when estimating medical costs for cost-benefit analysis, one should ideally take into account certain characteristics of potential traffic victims such as the age, the socio-economic status and the health status. This also means that, due to an increasingly older population in many countries, traffic related healthcare costs might increase in the future, even with a stagnating or
decreasing number of road crashes. Also different evolutions of costs over time were found according to the victim’s characteristics.

With regards to production loss it is shown that revenue loss increases when injury severity is higher. A French study found a considerably higher average revenue loss for MAIS3 injuries than for MAIS1 and MAIS2 injuries whereas revenue losses for MAIS4 and MAIS5 injuries were only slightly higher than for MAIS3 injuries. Furthermore the revenue loss appears to differ between professional groups such as self-employed persons, employees and students. These differences can further be explained by different levels of labour market participation, average wage and average length of absence between professional groups.

The data analysis showed that - for those countries that take these cost components into account - medical costs and production loss constitute on average 18% of the cost of a serious injury.

Next to material costs such as medical costs and production loss a road crash also involves immaterial costs. These immaterial or ‘human’ costs are the costs of pain, grief, sorrow and mainly the loss of quality of life due to the injuries caused by the road crash. Contrary to material costs, these costs have no market value. To facilitate inclusion of these costs in a cost-benefit analysis, there are different approaches to attribute a (monetary) value to this type of consequences. Three methods are described and compared: the Willingness To Pay (WTP) method, the Quality Adjusted Life Years (QALY) approach and the court awards approach.

The data analysis of crash costs in 32 countries reveals that immaterial costs represent a share varying from 10% to 91% of the total costs related to serious injuries. Their share depends on the method used to estimate these costs: when the WTP method is applied, these costs tend to be much higher.

While the WTP approach and the QALY approach need complex studies for which there are some methodological issues, the court awards approach makes use of available information on compensation payments awarded by courts to injured road victims. These values are generally much lower than those obtained in WTP and QALY studies. However the values appear to be unpredictable since they are highly dependent on the judicial system. Further it is important that costs as an input for cost-benefit analysis are grounded on economic welfare theory, which means that the values should be based on individual preferences, and that the values are determined ex ante. This is not the case for court awards. Therefore it is recommended to use direct WTP studies or QALYs instead of court awards to estimate the monetary costs of non-fatal injuries.

European Commission, Brussels

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