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AMERICAN JOURNAL OF INDUSTRIAL MEDICINE 52:195201 (2009)

Estimation of Health-Care Costs for Work-Related Injuries in the Mexican Institute of Social Security
Fernando Carlos-Rivera, MScE,1 Guadalupe Aguilar-Madrid, MD, Dr PH,2 mez-Montenegro, MHA,1 Cuauhte moc A. Jua rez-Pe rez, MD, MSc,2 Pablo Anaya Go 2 nchez-Roma n, MD, MSc, Francisco Rau l Sa Jaqueline E.A. Durcudoy Montandon, MSc,2 and V ctor Hugo Borja-Aburto, MD, PhD2

Background Data on the economic consequences of occupational injuries is scarce in developing countries which prevents the recognition of their economic and social consequences. This study assess the direct heath care costs of work-related accidents in the Mexican Institute of Social Security, the largest health care institution in Latin America, which covered 12,735,856 workers and their families in 2005. Methods We estimated the cost of treatment for 295,594 ofcially reported occupational injuries nation wide. A group of medical experts devised treatment algorithms to quantify resource utilization for occupational injuries to which unit costs were applied. Total costs were estimated as the product of the cost per illness and the severity weighted incidence of occupational accidents. Results Occupational injury rate was 2.9 per 100 workers. Average medical care cost per case was $2,059 USD. The total cost of the health care of ofcially recognized injured workers was $753,420,222 USD. If injury rate is corrected for underreporting, the cost for formal injured workers is 791,216,460. If the same costs are applied for informal workers, approximately half of the working population in Mexico, the cost of healthcare for occupational injuries is about 1% of the gross domestic product. Conclusions Health care costs of occupational accidents are similar to the economic direct expenditures to compensate death and disability in the social security system in Mexico. However, indirect costs might be as important as direct costs. Am. J. Ind. Med. 52:195201, 2009. 2008 Wiley-Liss, Inc. KEY WORDS: costs; occupational accidents; IMSS; Mexico

INTRODUCTION
RAC Salud Consultores, Mexico City, Mexico Instituto Mexicano del Seguro Social, Unidad de Investigacio n en Salud en el Trabajo, Mexico City, Mexico Contract grant sponsors: Fondo de Fomento a la Investigacio n; Instituto Mexicano del Seguro Social; Contract grant number: 2005/2/I/353. *Correspondence to: V|ctor Hugo Borja-Aburto, Coordinacio n de Salud en el Trabajo, dico Nacional Siglo XXI, Av. Cuauhte moc 330, Edif. C, 1er piso, Col. Doctores, Centro Me 06725 Me xico, D.F., Me xico. E-mail: victor.borja@imss.gob.mx
2 1

Accepted 28 October 2008 DOI 10.1002/ajim.20666. Published online in Wiley InterScience (www.interscience.wiley.com)

International indirect estimates have reported that workrelated diseases and accidents represent a public health problem in most developing countries [Leigh et al., 1999; Giuffrida et al., 2002; Concha-Barrientos et al., 2005]. However, the lack of reliable and systematized data on workrelated accidents and illnesses make it difcult to show the signicant economic and social consequences of this problem in Latin American and other developing countries. For many countries ofcial incidence data of occupational

2008 Wiley-Liss, Inc.

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injuries show rates below developed countries, what erroneously indicate that this is not a problem in those countries. This lack of information diminishes the priority of occupational health and so begins a vicious circle. Work and health authorities, as well as business operators do not make decisions, and workers and the general public do not demand improvements in working conditions to reduce risks and prevent those accidents and illnesses [Nuwayhid, 2004]. The present study is an effort to estimate direct heath-care costs for occupational accidents in Mexico, as an example of the experience in developing countries. Workers compensation plans in Mexico, called occupational risks insurance, are mandatory for all workers in the formal sector of the economy. Occupational risks insurance provides health care for the worker in the case of his/her incurring some accident or disease associated with the exercise of his/her work, or an in-transit accident that may occur to and from the workers home and workplace. Similarly, the employer is covered with respect to shortand long-term economic obligations (subsidies, aid, global indemnizations, and pensions) that are established by the Mexican Federal Work Law [Ley Federal del Trabajo, 2002]. The Mexican Institute Social Security (IMSS) Law establishes that occupational risks insurance provisions should be fully covered by employer insurance quota payments. The formula for this premium recognizes and rewards those who invest in prevention, and sets greater nancial contributions for companies registering higher insurance claims. Therefore, accurate data are required to classify enterprises and estimate the nancial burden. Although this insurance contemplates an important healthcare expenses component for workers experiencing occupational accidents or diseases, actuarial valuations have basically taken into account the expenditure for indemnication for work-related disabilities and deaths, because IMSS accounting systems do not separate health-care cost by insurance branch. The balance for 2005 was an apparent net surplus of approximately one-third of 1.8 billion USD quota paid by employers [IMSS Report to the Federal Executive Branch and the Congress, 2005 2006]. The present study is an effort to estimate direct heath-care costs for occupational accidents and diseases for IMSS insured workers, as an example of the experience in developing countries.

Incidence of Occupational Injuries


The incidence of work-related injuries and illnesses in the year 2005 was obtained from the Occupational Health Information System [IMSS, Statistical Memory, [Memoria Estad stica], 2005]. This registry includes all injuries recognized as work-related accidents by occupational physicians, after they receive health care at IMSS owned and operated hospitals and clinics. Total temporary disability is paid at 100% of the salary since the rst day of the accident until return to work, 1 year maximum, or a pension for permanent disability is granted. Previous reports have shown that $30% of occupational accidents are not registered [Salinas-Tovar et al., 2004]. Since occupational diseases are not as easily recognized as accidents are, only a few of them are declared and included in the registry. The incidence of occupational diseases (about 5,000 cases per year, basically traditional diseases: hearing loss and pneumoconiosis) obtained from these ofcial reports was so low that this problem deserves special attention. Therefore, we decided not to include occupational illnesses in this report because this would underestimate the care cost of these diseases. Occupational injuries were coded according to the World Health Organizations International Disease Classication Version 10 (WHO-IDC-10, 1995) and listed according to their frequency. We organized injuries into similar injury-type diagnostic groups (contusions, wounds, luxations, fractures, etc.) and anatomic region groups (head, neck, thoracic organ, pelvic organ, etc.) according to the frequency of the event in the worker population. This way, we constituted 27 different injury groups that included 79% of the cases reported in the occupational health statistics. The remaining 21% of the cases were grouped as other diagnoses. For the total cost estimation, other diagnoses were assigned the average cost of diagnostic groups.

Care Cost Estimation


A pilot study showed that consultation-derived medical les did not provide sufcient information for estimating the resources employed. Thus, to estimate the frequency of resource use by diagnosis, we resorted to the opinion of a panel of experts composed of IMSS medical specialists, with whom we constructed treatment algorithms for each disease. To the resources that these experts reported employing, we applied the medical-care unit costs published by IMSS for the main medical resources utilized in 2005 [Unit Costs; n, 2004]. In the case of Diario Ocial de la Federacio drugs, we used acquisition costs published on the IMSS transparency web page according to bids effected in the year 2005 [Transparency Portal (Portal Transparencia) IMSS, 2005].

METHODS
In order to quantify health-care costs, we carried out a study from the perspective of the health-services provider (IMSS) in which the variable of interest comprises direct medical costs for the year 2005. To determine health-care costs, it was necessary, on the one hand, to obtain the number and cases of work-related injuries, and on the other hand, to estimate their health-care costs.

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Medical costs included the following headings: outpatient specialty consultations (OSC); laboratory and imaging studies; drugs; surgery (SURG); rehabilitation; use of ambulances; primary care-level consultations, and occupational health consultations (OHC). To determine medical resources for each diagnostic group, the panels of experts dened the usual treatment algorithms at IMSS and later, resources employed. These panels of experts comprised 82 IMSS physicians in the Valley of Mexico, where they cared for $20% of injured workers. In the rst study stage algorithms described typical treatment for each diagnosis according to its level of complexity or severity (e.g., see Fig. 1). For a single identical general diagnosis, various scenarios can be presented according to resources utilization necessary for medical care according to the severity and complications of his/her illness, that is, required the use of other services such as surgical interventions (SURG), in addition to hospitalization days (HOSP) and a greater number of ambulatory rehabilitation (AR) sessions, in comparison with patients not requiring surgery. In the second stage of the study and from the treatment algorithms, we constructed databases with this information, and unit costs were divided by cost centers, by heading, and by event. In the case of headings, we included the following cost centers: consultations; hospital bed days; imaging examinations; laboratory examinations; surgical intervention, and minor procedures carried out in the consultory, while we classied the following by event: emergencies (EMERG); consultations; hospitalizations (HOSP); surgery (SURG); and intensive care unit (ICU). In addition to these, there are the following cost centers that comprise part of the two previous centers: rehabilitation, drugs, and OHC. In the third study stage, we estimated costs taking as reference medical resources utilization for the treatment of each diagnosis, differentiating this according to the level of complexity. Likewise, the panels of specialists dened the

proportion of cases in each diagnostic group according to the complexity of each illness to be used to weight cases within each diagnostic group. Once the amount of each medical resource utilized in the care of the patient in each scenario was determined, these amounts were multiplied by unit costs, and a total cost weighted by the complexity of each patient in the diagnostic groups was obtained. The formula employed for calculating the per-patient total cost was n X Cjx Qjxi Pi
x 1

where Cjx is the cost for patient j with complexity x, Qjxi the amount utilized for medical resource care i used by patient j with complexity x, and Pi the unit cost of medical service i. In a fourth stage, the cost of each diagnosis was multiplied by the number of incident cases, and the sum of all these cases represents the total health-care cost of occupational accidents in the year 2005 at IMSS. To broad the explanation of the methods, we included an example of an exposed tibial fracture. Figure 1 displays the treatment algorithm dened by the experts to identify the frequency of services utilization in the medical-care process from the patients admittance to the emergency room to his/ her hospital discharge and getting back to work after an occupation health physician certication. According to the panel of experts, there are three main types of tibial fracture, based on the number of surgeries per patient: mild, moderate, and severe (for one, two, and three procedures, respectively). Table I shows the total cost and the patient proportional distribution according to severity for tibial fractures. The expected costs for mild, moderate, and severe exposed tibial fractures were $6,867 USD, $10,098 USD, and $13,362 USD, respectively. Finally, the total cost for each fracture type is weighted by the frequency mentioned by the experts (30% mild, 63% moderate, and 7% severe); this result

FIGURE 1. Treatment algorithm of exposed tibia fracture. Mexican Institute of Social Security (IMSS), 2005. EMERG, Emergency
consultation; SURG, Surgery; HOSP, Hospitalization; HR,Hospital rehabilitation; OSC, Outpatient specialist consultation; AR, Ambulatory rehabilitation; OHC,Occupational health consultation.Note:Numbersbetween parenthesesindicatethefrequencyofeach resource.

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TABLE I. Cost Estimation of Exposed Tibial Fracture, Mexican Institute of Social Security (IMSS), 2005
Patient type according to resources utilization frequency Parameters included in the expected-costs model Frequency of medical resources utilization Emergency consultations (EMERG) Surgical interventions (SURG) Days of hospitalization (HOSP) Hospital rehabilitation (HR) sessions Out-patient specialty consultations (OSC) Specialty consultation procedures (bandaging, removal of surgical stitches, splint, or cast removal) Ambulatory rehabilitation (AR) sessions Occupational health consultation (OHC) Clinical analyses practiced Radiodiagnostic studies Drugs Average per-patient expected cost of exposed tibial fracture Unit cost (USD) 127 1,857 364 7 100 18 7 40 7 28 110 Mild (30%) Frequency 2 1 10 10 4 3 0 2 9 12 Total cost (USD) 254 1,857 3,637 72 401 54 0 79 65 337 110 6,867 Moderate (63%) Frequency 2 2 13 13 4 3 20 2 9 16 Total cost (USD) 254 3,714 4,728 94 401 54 149 79 65 450 110 10,098 Severe (7%) Frequency 2 3 16 16 4 3 50 2 11 18 Total cost (USD) 254 5,571 5,819 116 401 54 373 79 80 506 110 13,362

Details may not add up to totals due rounding.

is applied to the expected per-patient calculated cost for an exposed tibial fracture, which in this case was $9,357 USD (Table II). Likewise, in this table we present the distribution by severity and the expected costs for two other different conditions.

RESULTS
In the year 2005, IMSS insured 12,735,856 workers ($30% of the working population) against occupational injuries from 802,107 companies; of these workers, 373,239 received medical care for occupational risks (2.9/100 workers). Of these latter workers, 79% were classied as occupational accidents, 19% as commuting accidents, and the remaining 2% as occupational diseases. Of these occupational injuries, 1,367 were fatal and 13,450 generated permanent disabilities. In addition, occupational accidents caused a loss of 7,868,180 workdays due to temporary disability. The economic provisions to compensate for temporary loss of the ability to work and
TABLE II. Examples of Estimation of Expected Costs for Different Conditions
Mild Conditions Simple contusion Spinal column/disc hernia Exposed tibial fracture
a

indemnication for work-related permanent disabilities and deaths raised 578 million USD [IMSS, Statistical Memory, EOIT, 2005]. Table III shows health-care total costs for occupational accidents, separated from commuting or in-transit accidents, by 29 diagnostic groups incidence. Average medical cost of occupational accidents was $2,059 USD per case, with important variations ranging from $225 USD for simple contusions to $38,250 for ame-related burns treatment. Simple contusions were the most frequent injuries 79,544 cases per annumbut exhibited the lowest cost. Occupational accidents caused 2,384 hand and or nger amputations, with $3,156 USD per-case cost. Likewise, ocular injuries are similar in cost and incidence, but cause more disability. Finally, the highest average cost is represented by ame-related burns, with an average per-case cost of $38,250 USD and an incidence of 201 workers per year. The three most expensive cost centers for occupational injuries were surgery, which comprised the 37.3% of the total costs, followed by hospital stay and by OSC with 30.1% and 12.0% of the total costs, respectively.

Moderate % 50 63 Cost per case 6,049 10,098 %

Severe Cost per case

Expected costa $ USD 225 3,386 9,357

% 100 50 30

Cost per case 225 723 6,867

13,362

The expect cost was calculated as the summatory of the products of the proportion of patients in each severity condition and their associated cost.

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TABLE III. Total Costs of Occupational Accidents Ordered by Incidence, Mexican Institute of Social Security (IMSS), 2005
Number of occupational accidents 79,544 22,843 19,759 18,948 14,468 11,994 8,508 7,248 5,989 5,560 4,881 4,857 4,091 3,582 2,999 2,830 2,813 2,511 2,384 2,097 1,326 1,139 938 297 216 201 54 63,518 295,594 Number of commuting accidents 20,021 1,156 3,239 11,730 3,239 1,013 4,438 1,225 2,035 623 873 1,496 1,040 828 253 29 1,003 547 24 133 640 141 334 10 50 3 2 14,228 70,353 Average cost per case ($, USD) 225 3,386 2,263 466 2,463 768 4,178 679 3,903 5,955 864 3,384 4,243 5,301 2,655 21,103 4,295 9,872 3,156 3,485 4,281 7,585 9,357 2,981 842 38,250 5,252 2,059 Occupational accidents costs ($, USD) 17,871,852 77,345,663 44,718,014 8,829,292 35,636,781 9,211,248 35,550,000 4,923,475 23,373,891 33,110,312 4,216,579 16,437,566 17,358,528 18,987,992 7,961,118 59,720,352 12,080,361 24,788,504 7,522,886 7,307,679 5,675,962 8,639,884 8,772,329 885,378 181,809 7,688,226 283,626 130,771,875 629,851,181 Costs for commuting accidents ($, USD) 4,498,295 3,914,179 7,330,414 5,465,886 7,978,127 777,792 18,543,502 832,127 7,944,032 3,708,367 754,164 5,062,919 4,412,825 4,389,184 672,232 611,975 4,307,051 5,399,965 75,734 463,482 2,739,529 1,069,555 3,127,628 29,811 42,086 114,750 10,505 29,292,926 123,569,040

Injury Simple contusions Spinal column/disc hernia Contaminated wounds Luxations/sprains of the ankle Contaminated wounds of the hand Closed fracture of the wrist and hand Sequelae of ankle and foot sprains and fractures Interphalangial/hand/fingers Sequelae of knee sprain and trauma Hand fracture sequelae Shoulder luxations Sequelae of knee sprain and trauma Distal radial fracture Closed fracture and luxation of the ankle Exposed wrist fracture Electricity-related burns Closed tibial fracture Abdomen/thorax/thoracic abdominal trauma Amputation of hand, fingers/multiple Ocular/orbital injury Closed humerus fracture Spinal column/spondylolisthesis Exposed tibial fracture Crushing/hand Hemothoracic injury Flame-related burns Crushing/upper extremites Other injuries Total

Total costs ($, USD) 22,370,147 81,259,842 52,048,428 14,295,178 43,614,908 9,989,040 54,093,502 5,755,602 31,317,923 36,818,678 4,970,742 21,500,485 21,771,353 23,377,176 8,633,350 60,332,327 16,387,412 30,188,469 7,598,620 7,771,161 8,415,491 9,709,440 11,899,957 915,189 223,895 7,802,975 294,131 160,064,801 753,420,222

OA, occupational accident; ITA, in commuting accident; USD, U.S. dollars. Details may not add up to totals due rounding.

DISCUSSION
This study estimated the magnitude of the direct cost of health care of occupational injuries at IMSS. However, before we generalize the results nationwide, we must recognize some limitations derived from the use of ofcial records to estimate incidence and the employed methodology for cost calculation. Since consultation-derived medical les did not provide sufcient information for estimating treatment algorithms, we resorted to the opinion of a panel of experts composed of IMSS medical specialists. However, participating physicians from the Valley of Mexico, with whom we constructed treatment algorithms for each disease, might not accurately represent the treatment algorithms provided by physicians

and the actual treatment received by patients nationwide. However, it is worth to notice that most practicing physicians at IMSS are formed in the same institution and follow standards set by central authorities. Drugs and equipments are bought based on central guidelines, and physicians are not allowed to prescribe drugs out of a pre-established list. This could reduce uncertainties but does not completely eliminate possible bias on treatment estimates. Another limitation is that occupational diseases were not included in these estimates. The reporting system for occupational diseases is particularly weak because of the difculty to relate the cause of the disease to the working environment. Therefore, the misattribution of occupational illness to other sources can be more important than occupational accidents. However, the contribution of occupational

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illnesses to the total medical cost can be very high [Leigh et al., 2003]. The medical-care costs presented in this work are conservative estimates if compared with those carried out in other countries. This underestimation can originate from the low incidence of recognized occupational accidents and diseases at IMSS and due to lower unit costs of care in Mexico. The work-related injuries rate for 2005 was 2.9 per 100 workers, a number lower than that reported in U.S. and Canada and about half of that reported in Chile and Spain [International Labour Organization [ILO], Statistics, 2003 and 2007]. The injury-type classication process must take great care to avoid cross-over subsidies between branches where it is difcult to separate expenditures since health care is provided to their beneciaries in various insurance branches, such as occupational injuries, common disease and maternity, voluntary insurance, and health care for retired worker. If we correct for the 30% misclassication found in a recent report [SalinasTovar et al., 2004], the number of work-related injures would be 384,272 cases. Taking into account the average cost per case calculations of the present study, the corrected cost would be $ 791,216,460 USD. It is noteworthy that the costs of injuries reported herein cannot be employed directly for estimating the costs of injuries occurring outside the work environment. The group of medical experts participating in the advisory panels who dened the proportion of patients according to the severity of each diagnostic group referred that in general terms, occupational injuries are considered as injuries with a greater risk of infection; thus, they should be managed more carefully. Nonetheless, on the other hand, workers are relatively healthier than the general population, and special management was not considered, for example, adult patients with co-morbidities such as diabetes and high blood pressure submitted to surgery. The average cost of work-related injuries reported here is about half of the median health care of cost of 4,377 reported in a Canadian cohort [Alamgir et al., 2008]. This estimation demonstrates the high cost of health care for work-related injuries and the need to include them in any income expense balance in a social security system, especially if nancial incentives for prevention programs are considered. Cost appraisal data for commuting accidents are important for consideration, given that these are not included in occupational risk insurance-premium calculations. The cost of these commuting accidents represents 16% of the total cost. The estimated health-care expenditures of occupational injuries at IMSS for 753 million USD and the costs for economic provisions to compensate for loss of the ability to work for 578 million USD for indemnication for work-related disabilities and deaths comprise only two components of the total occupational-injury costs. Indirect

costs might be as important as or more important than direct costs [Weil, 2001]. Indirect costs include loss of productivity, pain, and suffering-associated, as well as out-of-pocket expenses contracted by the family concerning patient home care. Conservative estimates suggest an indirect-to-direct cost ratio of 1:1 [Dorman, 1999]. There are many variations of the proportion of the costs but usually the proportion of ma la inen indirect costs is much bigger than direct costs [Ha et al., 2006; Brown et al., 2007]. At IMSS direct health-care costs of occupational accidents are completely covered by the premium paid by the employer. However, indirect costs are not directly compensated for by the social security system, but borne by workers, their families, employers, the public health system, and taxpayers. The fact that employers and social security institutions bear only a portion of total costs has implications in the appreciation of its true magnitude, the economic and social impact that occupational accidents and diseases represent for health-care institutions, the society, and the country. IMSS covers most of the formal sector of the economy. However, the informal sector has grown rapidly during the last decades so that above gures solely reect the reality of nchezoccupational accidents in 30% of the workers [Sa n et al., 2006]. If we apply the rates of the population Roma covered by IMSS to the total workforce, assuming similar occupational risks, we can estimate that 1.4 million workrelated injuries occur each year in the country. The healthcare expenditure under this occupational accidents and diseases is borne by the workers, public health system, and nally, the taxpayers. If similar direct cost could be applied, then health care and indemnication for work-related disabilities and deaths would be close to 1% of the NGP. This gure is similar to that reported in Costa Rica in 1995 by the National Insurance Institute (Instituto Nacional de Seguros), which exclusively administers occupational risks and covers 56% of the countrys work force (EAP) and 84.3% of the salaried population. Estimations from Bolivia and Panama yielded a cost equivalent to 9.8 11% of the GNP, respectively (OPS-OMS, n; OPS-OMSS, 1998 Informe; OPS-OMS, 1999 124.a Sesio Regional Worker Health Plan, 2001), 124th Executive Committee Session). Likewise, in the U.S. Leigh and collaborators in 1992 estimated that occupational illness and injury costs represented 3% of the GNP [Leigh et al., 1997]. Similarly, a study conducted by the Universidad Pompeu Fabra [2001] in Spain reported that the total cost for occupational accidents and diseases represented >1.7% of the GNP [Cost Approximation of Work Claims in Spain, 2002]. Finally, for the European Agency for Occupational Safety and Health at Work (EU-OSHA) estimated cost of occupational accidents varied from 1% to 3% of the GNP, without including disability compensation costs [EU-OSHA, 2002].

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ACKNOWLEDGMENTS
We gratefully thank the team of specialist who developed the treatment algorithms and the staff from the participating hospitals: Hospitales de Traumatolog a y Ortopedia Victorio de la Fuente, Lomas Verdes, Pestalozzi, and Unidad de Medicina Familiar No. 1 from the Instituto Mexicano del Seguro Social.

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