Estimating the Economic Burden of COVID-19: Findings from Southern Iran

1. INTRODUCTION

The rapid spread of COVID-19 across various parts of the world has raised significant concerns in numerous countries as they encounter a large number of COVID-19 cases [1]. Iran officially declared the outbreak of this disease on February 18, 2020, and it is currently experiencing its seventh wave. Given the virus’s ability to spread rapidly, the reported incidence and mortality rates continue to be alarming [2].

While the primary and most crucial aspect of an epidemic is the suffering and loss of human lives, its impact extends beyond the healthcare system and affects all sectors of the country [3]. The economic sector is one of the areas profoundly affected by epidemics. Previous studies have emphasized the economic consequences of epidemics or pandemics, demonstrating their significant effects on the overall economy. Estimates suggest that the total economic loss caused by epidemics such as influenza amounts to approximately 500 billion dollars annually, equivalent to 0.6% of global income [4].

The economic impact of epidemic diseases varies across income groups, with middle and low-income countries experiencing more severe consequences than high-income countries [ 5 ]. The joint report by the World Health Organization and World Bank highlights the significant impact of epidemics. For instance, a report from the United Nations Development Program in 2017 estimated that the Zika virus epidemic in Latin America and the Caribbean from 2015 to 2017 incurred costs ranging from 7 to 18 billion dollars [ 4 ].

In recent decades, healthcare costs worldwide have increased significantly [ 6 ]. Consequently, health policymakers and planners have recognized the importance of understanding the economic costs associated with diseases. This understanding is crucial for evaluating the allocation of healthcare resources across different disease categories and for assessing the potential benefits of public health interventions [ 7 ]. These costs can arise directly from the diagnostic and therapeutic services provided to patients or indirectly from the loss of productivity and quality of life [ 6 ].

Illness costs can be categorized into two main groups: direct and indirect costs. Direct costs refer to the expenses incurred directly in providing healthcare services to patients. This includes both direct medical and non-medical costs. On the other hand, indirect costs pertain to the economic impact of the patient’s lost productivity due to illness [8].

Direct costs are further divided into two subcategories: direct clinical and direct non clinical costs. Direct clinical costs contain expenses related to hospitalization, surgeries, outpatient visits, radiation therapy, and chemo- therapy/immunotherapy. Direct non clinical costs, borne by patients and their families, include transportation costs to healthcare centers and expenses related to comple-mentary and alternative medicines [9].

European data demonstrate substantial macro- economic consequences of the COVID-19 pandemic, with an average decline in GDP of 7.4% in 2020. These effects vary among countries within the region. Without appropriate policy measures, it is estimated that the pandemic will disproportionately affect lower-income individuals, leading to increased poverty rates and overall inequality [10]. The US Council of Economic Advisers also projected that in the absence of economic support policies, low income individuals would experience an average loss of over 10% of their disposable income in the first quarter of 2020.

Initially, there was a scarcity of cost data regarding the burden of COVID-19, as is the case with any new disease. However, owing to the profound economic burden of this disease, numerous studies have recently focused on the medical costs of COVID-19 in different regions. Given the increasing number of these studies and their significant implications for healthcare budgets and the global economy, it is crucial to understand and consolidate these data to provide policymakers with a comprehensive understanding of the overall burden of COVID-19 [11].

A study conducted by Bartsch et al. (2020) in the US revealed that the infection rate of COVID-19 resulted in direct medical costs amounting to 163.4 billion dollars. The average direct medical cost for a symptomatic patient, including infection and one-year post hospital discharge, was $3,994. For hospitalized COVID-19 patients, the average cost was $18,579, considering the infection and one-year post-hospital discharge. Interestingly, the costs of hospitalization for COVID-19 patients were relatively similar across all age groups [11].

In the study by Gedik et al. (2020), the average clinical cost for patients with COVID-19 was reported to be $881.75 ± 667.31. For patients requiring Intensive Care Unit (ICU) treatment, the average cost was $2924 ± 2347.14 [12].

Based on a study by Darab (2021) conducted in Iran, the total direct medical costs for COVID-19 patients in a referral hospital in Fars province were estimated to be $1,791,172. Among the cost items, the highest cost was attributed to hospitalization, totaling $735,510. The average direct medical cost was estimated to be $3,755. The highest indirect costs were associated with the loss of productivity due to premature death, amounting to $10,190, whereas the lowest indirect costs were related to the loss of income due to hospitalization, totaling $378 [13].

To assess the economic burden of a disease, it is necessary to calculate both direct costs associated with resource allocation to medical care and indirect costs resulting from the economic resources and opportunities lost due to the disease and its treatment [9]. Gathering information on direct and indirect costs provides health policymakers with an understanding of the economic burden imposed by COVID-19 on governments, health insurance systems, and individuals. Such studies generate evidence to guide the rational allocation of limited resources to the healthcare sector during decision making processes [14]. Additionally, these studies can identify diseases that are more valuable in reducing the overall disease burden [15].

Several studies have been conducted in Iran to calculate the economic burden of various diseases, including cardiovascular diseases [16], eye diseases [17], hepatitis B [18], breast cancer [9], thalassemia [19], hepatitis C infection [20], and road accidents [21]. However, limited research has been conducted to evaluate the economic burden of this disease, which has become an epidemic in society. Therefore, this study aimed to calculate the economic burden of COVID-19 in patients hospitalized in 2022.

According to what was said, in this research, we looked for the answers to the following questions:

What are the direct and indirect costs of hospitalized patients with Covid-19?

What is the economic burden of COVID-19 in patients hospitalized?

The findings of this research, while helping to expand knowledge about the costs of the COVID-19 pandemic, have developed the awareness of health system managers and policy makers about the economic burden of such pandemics and can be a basis for planning to prepare for future similar crises.

2. METHODS

3. RESULTS

3.2. Frequency of Services Provided to the Study Patients

Based on the findings, the highest number of services provided to the study patients was related to pharmaceutical services, with an average of more than 9,000 drugs administered (equivalent to an average of 22.05 drugs per patient) (Table 2).

Table 1.

Variable	Group	Number	Percent
Sex	Female	219	48.7
	Male	231	51.3
Age (year)	< 20	3	0.67
	20-30	35	7.78
	31-40	79	17.56
	41-50	72	16
	51-60	68	15.11
	61-70	85	18.89
	71-80	52	11.55
	81-90	40	8.89
	>90	16	3.55
Length of stay (day)	<5	223	49.55
	5-10	189	42
	11-15	25	5.56
	16-20	6	1.34
	> 20	7	1.55
Type of insurance	Therapeutic services	314	69.8
	Social security	106	23.6
	Armed forces	14	3.1
	Others	8	1.8
	Without insurance	8	1.8
Discharge method	Recovered	393	87.34
	Passed away	36	8
	Transferred	7	1.56
	Discharged with personal consent	14	3.1

Table 2.

Type of Service	Frequency	Mean	Standard Deviation
Visit	3276	7.28	8.60
Consultation	270	0.60	1.24
Nursing	459	1,02	3.44
CT scan	400	0.89	0.71
ECG	513	1.14	1.42
Laboratory	2799	6.22	6.60
Medications	9922	22.05	17.50
Radiography	99	0.22	0.65
Ultrasound	58	0.13	0.41
MRI	5	0.01	0.07
Dialysis	18	0.04	0.52
Ward equipment	5668	12.59	12.96
Hoteling and bed	2484	5.52	4.03

Table 3.

Category	Amount	Mean	SD	Percent Out of the Total Costs
Primary insurance	503458.21	1118.79	1425.02	83.88
Subsidy	27008.46	60.01	109.21	4.50
Supplementary insurance	4459.33	9.90	81.67	0.74
Patient	56219.69	124.93	235.85	9.37
Non-subsidized expenses	9066.18	20.14	169.20	1.51
Total	600211.89	1333.80	1315.02	100

Note: * The figures are denominated in US dollars.

4. DISCUSSION

The COVID-19 pandemic has had a significant impact on the Iranian health system and society, resulting in a heavy economic burden [22]. This study aimed to estimate the economic burden of COVID-19 in hospitals affiliated with Jiroft University of Medical Sciences in southern Kerman, Iran.

The total direct medical costs for COVID-19 patients in this study amounted to $600,211.89, with a mean cost of $1333.80 ± 1315.02 per patient. Darab et al. (2021) conducted a study at a referral hospital for COVID-19 patients in Iran and found that the total costs and mean direct medical costs per patient were $1,791,172 and $3,755, respectively [13]. Bartsch et al. (2020) estimated the mean direct medical costs per COVID-19 patient in the US to be $3045 [23]. Cleary et al. (2021) estimated the hospitalization cost for chronically ill patients in South Africa to be $7600 [24]. Jin et al. (2020) found that the hospitalization cost for critically ill patients with COVID-19 in China was approximately $9,000, with hospital beds being one of the largest cost components [25].

Kabir et al. (2021) conducted a study in a referral hospital for COVID-19 patients in Iran and reported that the mean direct medical cost for each chronically ill patient was $5,117 [22]. Yusefi et al. (2022) estimated the total direct medical costs of COVID-19 patients in a referral hospital in Iran to be $1,037,992.15 [26]. Mojtabaeian and Monfared (2022) estimated the mean direct cost per COVID-19 patient in Iran to be 57,339,107 Rials [27].

It is important to note that direct medical costs can vary depending on factors such as the number of patients, disease severity, length of hospital stay, and length of ICU stay [28, 29]. The treatment costs for COVID-19 patients are generally higher than those for other infectious diseases, owing to the possibility of hospitalization and higher mortality rates [23]. The differences in total costs and mean direct medical costs across different studies may be attributed to differences in the range of medical diagnostic services, medications, and patient's insurance conditions.

The results indicated that pharmaceutical services accounted for the highest proportion of direct medical costs among the different types of services, amounting to 40.74% ($244,578.16) of the total costs. Numerous studies have shown that medication expenses constitute the largest portion of direct medical costs [30, 31]. Darab et al. (2021) found that pharmaceutical costs accounted for 34% of the total cost for COVID-19 patients [13]. Similarly, Sadeghifar et al. (2021) reported that pharmaceutical services represented the largest portion (30%) of direct medical costs for COVID-19 patients [32]. Kabir et al. (2021) also identified drug costs as a major component (32%) of COVID-19 patient expenses [22]. In Yusefi et al.’s study (2022), the cost of medicines constituted the largest out-of-pocket expense for COVID-19 patients (50.23%) (26). Jin et al. (2020) found that medication costs constituted the largest proportion of the total costs for COVID-19 patients [25].

Another significant finding of this study was the relationship between the length of hospital stay and both the total direct cost and direct costs associated with different types of services. It was found that reducing the length of hospital stay could lead to various benefits, including increased revenue, cost reduction, decreased variations in clinical procedures, improved quality of care, and increased profitability. Prolonged and unnecessary hospital stays not only waste human resources and depreciate equipment but also result in additional costs for the patients.

Several studies have demonstrated that reducing the length of hospital stay can effectively lower costs without compromising health outcomes or the quality of care. As a result, policymakers, hospital managers, and third party payers (such as insurers) often prioritize strategies aimed at reducing hospital stays. These stakeholders emphasize the importance of containing hospital costs and maximizing efficient and effective utilization of limited hospital resources [33].

Another significant finding of the study was the statistically significant relationship between age, and the costs associated with various services such as visits, consultations, nursing services, CT scans, ECG, ultrasound, MRI, ward equipment, and hoteling and bed. The results indicated that as age increased, the costs of these services also increased significantly (p < 0.05).

This finding is consistent with a study conducted by Richards et al. (2022), which found that, on average, older patients with COVID-19 incurred higher costs than younger age groups [11]. However, it is important to note that this finding contradicts the results of a study by Holy et al. (2020), which reported that older age groups (≥ 84 years) were associated with lower costs than other age groups [34]. The difference in findings between these studies may be attributed to insurance coverage for COVID-19 patients.

This study found a statistically significant relationship between insurance type, costs associated with visits, dialysis, and total direct costs (p < 0.05). According to Kabir et al. (2021), primary insurance covers an average of 82% of the total costs for COVID-19 patients [22]. Similarly, Sadeghifar et al. (2021) reported that primary insurance covered 80% of the total costs, whereas supplementary insurance covered 2% [32].

The study by Ghiasvand et al. (2010) revealed that having supplementary insurance coverage at the 10% level was statistically significant in preventing the occurrence of financially burdensome medical costs. However, social health insurance plans in Iran have not been effective in reducing such costs. The ineffectiveness of social health insurance plans in supporting patients may be attributed to the design and implementation of insurance plans without considering important factors such as the socioeconomic status of households, demographic characteristics, and the pattern and epidemiology of diseases in Iran [35].

The COVID-19 pandemic not only resulted in direct costs but also imposed significant indirect costs. These indirect costs include potential reductions in productivity due to absenteeism during hospitalization and recovery and decreased productivity resulting from premature death. Additionally, income lost due to illness, obligatory stay-at-home measures, or death of the workforce due to COVID-19 can be considered indirect costs [13].

According to Kabir et al. (2021), the total mean indirect cost for each COVID-19 patient was estimated to be 959,577,714 Rials [22]. In a study by Darab et al. (2021), the reduction in productivity among COVID-19 patients was found to be twice as much as the direct medical costs per patient. The mean indirect cost per person in the above study was estimated to be $11,634 [13]. Different indirect costs across different studies may be attributed to differences in the number of deaths among working-age individuals due to COVID-19.

The findings revealed that COVID-19 placed a significant economic burden on the study hospitals, amounting to $4,186,389.48. Jin et al. (2021) conducted a study in China to examine the economic burden of COVID-19, reporting the total health costs and social costs associated with the disease as $0.62 billion and $383.02 billion US dollars, respectively [36]. Fusco et al. (2021) conducted a study on the consequences and economic burden of 173,942 hospitalized patients with COVID-19 in the US, estimating the mean hospital costs to be $12,046 [37]. Additionally, Lui et al. (2021) conducted a study in the US, which indicated that the economic burden of COVID-19, considering years of life lost due to illness, disability, and death, amounted to $119.62 billion US dollars [38]. Bartsch et al. (2020) conducted a study in the US, estimating the mean direct medical costs per person during the pandemic to be $3,045 [23]. Claxton et al. (2020) also conducted a study on the costs of COVID-19, reporting mean hospital costs of $9,763 for patients without mechanical ventilation and $34,223-88,114 for those requiring mechanical ventilation [39].

When comparing the study results with those of similar studies, it is evident that COVID-19 has imposed a substantial economic burden on various countries. This trend poses a significant challenge to healthcare systems, particularly in underdeveloped and low-income countries, potentially pushing them towards collapse [ 40 ]. Therefore, it is crucial to focus on managing and controlling new COVID-19 cases to prevent their spread.

Regarding the limitations of the study, it is important to note that due to the limited access to socioeconomic information of patients, further research is recommended to explore the impact of lost production and productivity across different income groups.

CONCLUSION

The investigation of the economic dimensions of COVID-19 in this study yielded substantial evidence supporting the implementation of socio-economic policies pertaining to COVID-19 and similar epidemics. The study findings, along with the estimated economic burden, indicate that COVID-19 has the potential to exert unprecedented economic pressure on the Iranian health system in terms of allocating financial resources to healthcare centers. Therefore, it is strongly recommended that disease control be prioritized through preventive measures and subsequently implemented cost control policies.

Also, the implementation of additional preventive measures, such as large scale vaccination in order to reduce the incidence and thus reduce direct and indirect medical costs is a vital issue that health managers and policy makers should consider.

REFERENCES