2.5.1 Direct costs

Direct costs refer to the amounts of money spent directly on treating or managing a given illness or more specifically, the amounts of money spent at medical institutions for the treatment and management of such illness. These costs can be further broken down into direct healthcare costs and direct non-healthcare costs. The direct healthcare costs include the costs of outpatient and/or hospitalization services and purchasing medications (including prescribed medications) to treat the given illness. Furthermore, it includes the costs incurred by outpatients and


Methodology of Estimating Socioeconomic Burden of Disease Using National Health Insurance… DOI: http://dx.doi.org/10.5772/intechopen.89895

#### Table 3.

Costs estimated based on different perspectives.

hospitalized patients alike due to disease, encompassing covered costs paid by insurer, copayments paid by patients, non-covered costs, and prescription costs.

The direct non-healthcare costs refer to the expenses paid by patients to visit and use the services of medical institutions, such as the costs of transportation and caregiving.

## 2.5.2 Indirect costs

Indirect costs refer to the losses of labor and productivity that are incurred in addition to the tangible (financial) costs of an illness. Examples include the amounts of time taken off (paid) work to go to medical institutions and the loss of future expected income, not only of patients but also of their family members or other loved ones who are compelled to care for them. The latter example may also be expressed as the opportunity costs of being ill, including the losses of working hours and leisure time.

The indirect costs, or losses of productivity, are estimated by defining the number of hospitalization days as the number of working days lost and the amounts of time spent for outpatient visits, as losses of working time. The losses of future income are due to the premature deaths of patients.

### 2.5.3 Intangible costs

The intangible costs represent the decline in the quality of life and psychological suffering of patients and loved ones. However, it is notoriously difficult to define and quantify these costs with precision (Drummond et al., 2005). Due to the scarcity of related data and the difficulty of quantification, researchers often forgo estimating these costs (Table 4).


#### Table 4.

Cost components and definitions.
