Direct and Indirect Cost Burden of Chronic Hepatitis C

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The American Journal of Pharmacy Benefits, July/August 2015, Volume 7, Issue 4

An estimation of the direct healthcare and indirect work-loss cost burden of chronic HCV using health insurance claims covering 13 million individuals.

An estimated 3.2 million Americans are living with chronic hepatitis C in the United States, with the peak prevalence occurring among individuals born between 1945 and 1965.1 The US Preventive Services Task Force and the CDC have updated their guidelines and also consistently recommend screening for hepatitis C virus (HCV) in persons at high risk for infection, offering a 1-time screening for HCV infection to adults born between 1945 and 1965.2,3

Recent data suggest that the mortality rate due to HCV has risen significantly between 1999 and 2007, with 15,106 recorded deaths due to HCV occurring in 2007.4 The same study demonstrated that 73.4% of deaths occurred in people aged 45 to 64 years and that chronic liver disease, hepatitis B virus co-infection, alcohol-related conditions, minority status, and human immunodeficiency virus (HIV) co-infection were factors associated with HCV-related death.4 The growing national effort to identify the birth cohort of HCV patients in the United States is, in part, aimed at curbing the growing volume of liver complications related to chronic HCV infection. However, it is unclear whether diagnosing those patients infected with HCV will lower mortality rates and improve patient outcomes in the near term.

Several studies have documented the significant healthcare burden associated with HCV.5-10 More precisely, using retrospective claims data, recent studies have evaluated the incremental direct healthcare costs of HCV to range roughly from $8000 to $24,000 annually.7-10 In addition, Su et al have studied the impact of HCV on work absence and found that employees with HCV had significantly more lost work days than employees without HCV, translating into a $490 yearly increase in indirect costs.7

Despite the literature reporting the cost burden of HCV, few studies have evaluated the complete direct and indirect cost burden and its relationship to disease severity.10-12 A recently published literature review reported that the cost of HCV sequelae rises with the progression of the disease.11 In another study, Gordon et al estimated that HCV patients with end-stage liver disease (ESLD) had a 3.3-fold increase in their total adjusted direct healthcare costs relative to HCV patients with non-cirrhosis disease.12 In this study, a retrospective analysis of integrated health insurance claims and disability data was performed: a) to assess the impact of chronic HCV on healthcare resource use, direct healthcare, and indirect work-loss costs from the perspective of a private payer; and b) to stratify the direct and indirect economic burden associated with HCV by disease severity.


Data Source

An analysis of the OptumHealth Reporting and Insights Database was conducted from January 2001 through September 2011. The database includes the medical and pharmacy claims of more than 13 million privately insured individuals covered by 60 self-insured Fortune 500 companies with locations in all Census areas of the United States. In addition, short- and long-term disability claims were available for employees in 29 of the companies, enabling the calculation of work-loss costs. The database was de-identified and was in compliance with the Health Insurance Portability and Accountability Act of 1996 to preserve patient anonymity and confidentiality. Data elements used in the present analysis included information on patients’ demographics (eg, age, gender, insurance type), monthly enrollment history, medical and pharmacy claims including actual payment amounts, and short- and long-term disability claims reporting dates of work loss and payments to employees.

Study Design

Patients ≥18 years of age with ≥2 diagnosis claims of chronic HCV (International Classification of Diseases, Ninth Revision, Clinical Modification [ICD-9-CM] diagnosis codes: 070.44, 070.54) and continuously enrolled for ≥6 months prior to the first HCV diagnosis (baseline period) were identified to form the HCV cohort. Using ICD-9-CM diagnosis or current procedural terminology codes, HCV patients were classified into the following 3 mutually exclusive groups according to the severity of their liver disease (

eAppendix 1

, available at observed during the baseline or the follow-up period: a) non-cirrhosis, b) compensated cirrhosis, and c) ESLD. A control group of 2 million randomly selected adult patients without HCV who were continuously enrolled for ≥6 months were identified to form the non-HCV cohort. In both cohorts, patients diagnosed with HIV (ICD-9-CM diagnosis codes: 042.xx-044.xx, 079.53, V08.xx) were excluded. The first diagnosis of chronic HCV was termed as the index date for patients in the HCV cohort, whereas the index date for patients in the non-HCV cohort was randomly assigned following a 6-month baseline period. Patients’ follow-up periods spanned from the index date through the earlier of either end of continuous enrollment or end of data availability (ie, September 2011).

Study End Points

Cohorts of HCV and non-HCV were compared in terms of healthcare resource use, direct healthcare costs, and indirect work-loss costs. Healthcare resource use included medical visits stratified into 3 mutually exclusive components: a) hospitalizations, b) emergency department (ED) visits, and c) outpatient visits. Direct healthcare costs included pharmacy costs and medical costs (which were stratified into costs attributable to hospitalizations, ED visits, and outpatient visits).

Additionally, among the subset of employees with disability coverage, indirect costs were evaluated and included: a) actual employer payments for disability days and b) imputed costs for medically related absenteeism. Disability costs included payments for short- and long-term disability whereas medically related absenteeism costs were calculated by multiplying days of absenteeism occurring during work days (half day for an outpatient/ED visit and 1 day for each day of hospitalization) by an employee’s daily wage. Indirect costs did not include costs associated with productivity loss or early retirement.

Finally, both all-cause and HCV-related direct and indirect costs were assessed. HCV-related costs included claims with a diagnosis of chronic HCV or HCV therapy (ie, peginterferon alfa-2a or alfa-2b, interferon alfa-2a or alfa-2b, interferon alfacon-1 [as monotherapies or in combination therapy with ribavirin]). All costs were adjusted to the 2011 US$ value.

Statistical Analyses

Propensity score matching was used to minimize the potential impact of confounding factors. The goal was to assemble a population in which those with HCV would be demographically similar to those without HCV in addition to having similar comorbidities that are not on the pathway of HCV (ie, excluding conditions potentially related to HCV) at baseline. The propensity score was defined as the probability of having an HCV infection given the patient’s baseline characteristics. Propensity scores were calculated separately for each patient using a nonparsimonious multivariate logistic regression model, incorporating the following baseline characteristics: age, gender, length of follow-up, type of beneficiary (ie, employee, employee with disability coverage, and spouse/dependent/retiree), year of index date, insurance type, region, Quan-Charlson comorbidity index (excluding mild and severe liver disease), and specific conditions or comorbidities that are not commonly associated with HCV (ie, pregnancy, epilepsy, rheumatoid arthritis, cardiac arrest, heart failure, coronary arterial disease, lung/heart transplantation, kidney transplant, autoimmune deficiency, chronic obstructive pulmonary disease, and Crohn’s disease).13,14 HCV patients were matched 1:1 with a non-HCV cohort based on their propensity scores and exact matching factors, such as age, gender, type of beneficiary, and Quan-Charlson comorbidity index. Comorbidities that may be clinically or behaviorally related to chronic hepatitis C infection or HCV therapy (ie, anemia, diabetes, depression, schizophrenia, bipolar disease, psychiatric disease, substance abuse, renal failure, dialysis, lichen planus, porphyria cutanea, vasculitis, psoriasis, and non-Hodgkin lymphoma), as identified by the authors and the literature reviewed, were excluded as matching factors a priori.15-19

Descriptive statistics were generated to summarize the baseline characteristics of the study population. Frequency counts and percentages were used to summarize categorical variables, while means and standard deviations were used for continuous variables. Due to the large sample size of our study population, clinical differences in baseline characteristics between the 2 cohorts were assessed using standardized differences. A standardized difference of less than 10% was considered not clinically relevant.20-22

To evaluate the impact of HCV on the rate of healthcare resource use, frequency rates were calculated and compared between cohorts using rate ratios (RRs). The frequency rate of each end point was calculated as the number of events divided by the number of patient-years observed. Statistical differences between matched cohorts and 95% confidence intervals (CIs) were evaluated using conditional Poisson regression models accounting for matched pairs.

Cost differences between study cohorts were assessed based on incremental annualized costs. To avoid overestimating costs by annualizing data for patients observed for less than 1 year, we calculated costs per patient per year (PPPY) by weighting each patient’s cost outcomes by length of follow-up.23 Because the normality assumption might not be valid for cost-outcome variables, we conducted nonparametric estimations (ie, bootstrap method with 999 replications) to carry out statistical inference and determine the 95% CI for the cost difference between the 2 groups.

All study end points were evaluated for the overall study population, as well as for each group of liver disease severity. Statistical significance was assessed at an α level of 0.05 or less. All statistical analyses were conducted using SAS version 9.3 (SAS Institute, Inc, Cary, North Carolina).


Baseline Characteristics

A total of 9846 chronic HCV patients and 2 million non-HCV control patients were identified (

Figure 1

). Among them, 9841 patients from the HCV cohort (99.9%) were matched to an equal number of patients from the non-HCV cohort to form the study population.

Table 1

presents the baseline characteristics of the matched cohorts. Overall, both cohorts were well matched in terms of age (mean = 52 years), gender (male = 61%), Quan-Charlson comorbidity index (mean = 0.5), share of employees with disability coverage (26%), and non—HCV-related comorbidities. For both the HCV and the non-HCV cohorts, the most common non–HCV-related comorbidities were coronary arterial disease (~6%), chronic obstructive pulmonary disease (~5%), and heart failure (~2%). In both cohorts, the majority (57%) of patients identified were dependents and/or retirees rather than active employees (43%).

Within the HCV cohort, a number of comorbidities existed that could be related to HCV, including diabetes (13.1%), psychiatric disease (9.7%), depression (8.0%), anemia (7.8%), substance abuse (6.6%), and renal failure (3.1%) or dialysis (0.9%). Each of these potentially HCV-related conditions were more common in HCV compared with non-HCV patients and were not included in the matching algorithm due to the potential link with HCV.

The stratification of the HCV cohort by liver disease severity led to 6187 (62.9%), 1097 (11.1%), and 2557 (26.0%) patients in the non-cirrhosis, compensated cirrhosis, and ESLD groups, respectively. Within each of these subgroups, baseline characteristics were well balanced between the HCV and non-HCV cohorts (see

eAppendices 2-4


Impact of HCV on Healthcare Resource Use

Frequency rates of all-cause resource use for the HCV and non-HCV cohorts are presented in

Figure 2

. For the overall study population, the HCV cohort had significantly more hospitalizations (RR, 2.45; 95% CI, 2.37-2.54; P <.001), more frequent ED visits (RR, 1.88; 95% CI, 1.83-1.92; P <.001), and more outpatient visits (RR, 1.67; 95% CI, 1.66-1.68; P <.001) relative to the non-HCV cohort. When stratifying the results per liver disease severity, rates of medical services were significantly higher in all categories among HCV patients compared with non-HCV patients. In addition, the incremental healthcare resource consumption associated with HCV increased with liver disease severity (non-cirrhosis: RR, 1.53 [95% CI, 1.52-1.54]; compensated cirrhosis: RR, 1.70 [95% CI, 1.68-1.72]; ESLD: RR, 1.95 [95% CI, 1.94-1.96]; all P <.001). It is worth noting that ESLD had the greatest impact on all-cause resource use, with HCV patients being 2.6 times more likely to be seen in the ED and having 4-fold higher hospital admission rates compared with non-HCV ESLD patients (Figure 2). In terms of total healthcare visits, outpatient visits occurred frequently in both HCV and non-HCV patients: 18 visits per year versus 11, respectively. Although the difference between HCV and non-HCV patients was most evident in ESLD patients (24 vs 12 office visits per year), even non-cirrhosis HCV patients were seen in the office 15 times per year on average. Non-cirrhosis, non-HCV patients were seen on average 10 times per year, indicating that two-thirds of office visits were likely related to the management of non-HCV comorbid medical conditions.

Impact of HCV on Direct and Indirect Costs—Overall Population

Table 2

summarizes the direct and indirect cost burdens associated with HCV for the overall population. Total all-cause direct healthcare costs were approximately $10,500 PPPY higher in the HCV cohort versus the non-HCV cohort (mean PPPY = $16,721 vs $6063; cost difference = $10,503 [95% CI, $9683-$11,361]; P <.001). Costs related to hospitalizations contributed the most to this cost difference (cost difference = $4118 [95% CI, $3548-$4716]), followed by outpatient visits (cost difference = $3260 [95% CI, $2876-$3723]) and pharmacy costs (cost difference = $2977 [95% CI, $2822-$3136]). Among employees with disability coverage (N = 2532 in each cohort), HCV patients incurred significantly greater total all-cause indirect costs compared with non-HCV patients (mean PPPY = $3310 vs $1723; cost difference = $1523 [95% CI, $1248-$1794]). HCV-related costs (direct: $4850; indirect: $415) accounted for less than half of the incremental costs incurred by HCV patients: 46% of direct and 27% of indirect cost differences.

Impact of HCV on Direct and Indirect Costs—Stratified by Liver Disease Severity

Figures 3a



present the direct and indirect cost burden associated with HCV, respectively, stratified by liver disease severity. The direct incremental cost burden associated with HCV increased with disease severity (non-cirrhosis: cost difference = $5536 [95% CI, $4844-$6333]; compensated cirrhosis: cost difference = $6833 [95% CI, $5326-$8474]; ESLD: cost difference = $22,466 [95% CI, $20,182-$24,729]) (Figure 3a). Among the subset of employees with disability coverage (N in each group: non-cirrhosis = 1765; compensated cirrhosis = 257; ESLD = 510), the incremental indirect cost burden associated with HCV also increased with disease severity (non-cirrhosis: cost difference = $742 [95% CI, $457-$1026]; compensated cirrhosis: cost difference = $1449 [95% CI, $788-$2,084]; ESLD: cost difference = $3775 [95% CI, $2995-$4607]) (Figure 3b).


Based upon real-world data, this large retrospective study was specifically designed to assess the burden of chronic HCV in terms of healthcare resource use, direct costs, and indirect costs, and to evaluate its relationship to disease severity using an integrated insurance claims and disability claims database and a matched cohort design.

Our results indicate that patients with chronic HCV were hospitalized 2.5 times more frequently, visited an ED 1.9 times more frequently, and visited outpatient clinics 1.7 times more frequently relative to a matched cohort of patients without HCV. These findings are consistent with other studies documenting increased resource use by patients with HCV.8,9,24 For example, using claims data for commercially insured individuals in the United States and a matched cohort design, McCombs et al estimated that during the first year following HCV diagnosis, HCV patients had significantly higher rates of medical resource use compared to non-HCV patients (hospitalizations = +486%; ED visits = +16%; outpatient visits = +98%).9 Similarly, a study by Davis et al reported that HCV patients were associated with a 1.4-fold increase in all-cause resource use, including a 4-fold increase in hospitalizations, relative to non-HCV patients.8 Of note, in the current study, HCV patients with ESLD also experienced a 4-fold increase in hospitalizations compared with similar non-HCV control patients.

In our analysis, non-HCV related medical conditions were the largest contributing factor to greater healthcare costs (representing more than half of the incremental direct cost difference between the HCV and the non-HCV cohorts). These findings suggest that the current cohort of diagnosed HCV patients is consuming significantly greater healthcare resources than a similar cohort of non-HCV patients. Future attempts to manage costs should include strategies to control both the HCV-related expenses—including HCV eradication via antiviral therapy and non—HCV-related costs—potentially through closer management of non–HCV-related medical conditions that are common within a predominantly Baby Boomer population.25 As the population of patients chronically infected with HCV ages, the percentage of those suffering from significant liver fibrosis and complications of cirrhosis are expected to grow. As a result, our findings of higher healthcare utilization are likely to persist or even escalate in the next decade compared with the last.

We also found that the increase in the all-cause direct costs was $10,503 PPPY higher in the HCV cohort versus the non-HCV cohort, of which only 46% were HCV-related. According to this analysis, management of a non-cirrhosis HCV patient costs approximately $11,000 each year, from a healthcare perspective (Figure 3a). Over a 10-year period, this would amount to $110,000—roughly double that of a similar non-HCV patient, assuming his or her liver disease severity does not advance to cirrhosis or beyond. For patients already diagnosed with cirrhosis, the annual cost to manage their healthcare increases to $13,000. However, once patients develop cirrhosis, the biggest risk is that they develop a related complication, implying ESLD, where the annual cost for managing his or her healthcare nearly triples to about $30,000 per year on average. Individual patient costs can rise to hundreds of thousands of dollars if a liver transplant is considered. In terms of patient morbidity and mortality, ESLD patients incur a high cost individually because their only option in an attempt for survival is limited to liver transplant—if they even qualify according to the MELD (model for ESLD) scoring system and if a matching donor can be identified in time.26 From a private-payer standpoint, this suggests that trying to identify patients before they reach ESLD and trying to optimize their disease management to lower their chance of progressing to ESLD may help control disease-related costs.

Our results are similar to other recently published studies.7-10 Davis et al estimated the incremental all-cause direct costs associated with HCV to be $15,510 for the 1-year period following HCV diagnosis, with 44% being HCV-related, whereas McCombs et al, found a $23,815 difference in all-cause costs, using a similar approach.8,9 One potential explanation for the higher cost burden reported in these 2 studies is their length of follow-up of 1 year versus ~3.5 years in the current study, since healthcare costs have been shown to be greater in the year following HCV diagnosis.6,24 Another possible explanation for the higher cost burden reported by McCombs et al, compared with our findings, is the high comorbidity profile of their study population. For example, more than half of their HCV patients suffered from heart disorders and 39% had mental disorders.9 In our study, only 9.7% of the HCV population suffered from psychiatric diseases and 2.2% had heart failure at baseline. Collectively, the studies suggest that management of non—HCV-related comorbid conditions is a major contributor to the higher costs incurred by HCV patients, whether HCV is formally diagnosed or not.

Compared with the recent literature on the burden of HCV, our study has the advantages of robust matching using a pool of 2 million non-HCV control patients, as well as reporting all-cause and HCV-related indirect work-loss costs and direct HCV burden results by liver disease stratifications.7-10,12 This study also has the unique feature of reporting the stratification of the indirect cost burden by HCV-related liver disease severity. Our results indicate a positive relationship between the indirect cost burden of HCV and the severity of liver disease. Specifically, ESLD patients had an incremental $3775 PPPY cost relative to non-HCV patients. This cost difference was 2.6 and 5.1 times higher than the cost difference observed between HCV patients in the compensated cirrhosis and non-cirrhosis cohorts, respectively, versus their non-HCV matched controls. From an employer perspective, the finding that disability is significantly higher in HCV patients even before they develop cirrhosis or liver failure suggests that it provides another incentive for early identification and appropriate management of HCV.


Because the algorithm used to classify HCV patients into each group of liver disease severity was not validated through medical chart reviews, misclassification errors may have occurred. Further, claims databases may contain inaccuracies or omissions in procedures, diagnoses, or costs and no information is provided on whether medication is taken as prescribed. In addition, indirect costs from an employer perspective were probably underestimated, as the indirect costs calculated in this study did not include costs associated with productivity loss and early retirement. Lastly, our study population consisted of privately insured individuals; therefore, our results might not be generalizable to the entire HCV population, of which an important proportion is uninsured or publicly insured.27

It was beyond the scope of this study to assess whether HCV therapy is beneficial; thus, our study was conducted on all HCV patients regardless of therapy usage. Further research is warranted to evaluate the potential cost benefit or cost saving associated with HCV therapies before and after a successful therapy. Of note, the evaluation of HCV burden in the current study was, for the most part, prior to triple therapy (peginterferon, ribavirin, and the direct antiviral agent boceprevir or telepravir) usage since boceprevir and telepravir were approved by the FDA in 2011.


In a private insurance setting, HCV was found to be significantly associated with greater levels of healthcare resource use. Consequently, patients with HCV incurred significantly greater direct healthcare costs and indirect work-loss costs relative to those without HCV. In addition, the magnitude of both the direct and indirect cost burden increased with liver disease severity. The majority of healthcare costs were attributed to non—HCV-related medical conditions, suggesting that a comprehensive healthcare management approach that includes interventions targeted at HCV and other common comorbid conditions may be warranted.

Identifying and proactively managing healthcare for HCV patients may offer improvements in clinical outcomes related to HCV and overall. Providing early therapeutic interventions that can prevent liver disease progression related to HCV can potentially further reduce the economic burden associated with chronic hepatitis infection. Additional research is warranted to understand the impact of HCV burden once a virologic cure is achieved.