The procedures for estimating the economic losses due to fatal and nonfatal unintentional injuries were extensively revised starting with the 2014 data year. New components were added, new benchmarks adopted and a new discount rate assumed. All of these changes resulted in significant cost estimate changes. For this reason, it must be re-emphasized that the cost estimates should not be compared to those in previous years. Many of the cost benchmarks relied on by the previous model were originally developed in the late 1980s and early 1990s. The new cost estimate model takes advantage of many new benchmarks, including the Centers for Disease Control and Prevention (CDC) Web-based Injury Statistics Query and Reporting System (WISQARS) cost estimates and Health Care Utilization Program (HCUP).
The new cost estimate model results in substantial changes in several of the cost estimates, with workplace cost estimates particularly impacted as outlined below. Please note that the changes in cost estimates reflect improvements in estimate procedures, not in actual year-to-year changes.
- Total cost estimate is about a quarter lower than previous estimates
- Wage and productivity losses
- About 40% lower than previous model
- New model uses the CDC WISQARS cost estimates as a benchmark for work loss and productivity
- Medical expenses
- About a third lower than previous model
- New model uses the CDC WISQARS cost estimates and Pacific Institute for Research and Evaluation (PIRE) evaluation of the Healthcare Cost and Utilization Project (HCUP) Nationwide Inpatient Sample as benchmarks for medical expenses
- Motor-vehicle damage
- About 50% higher than previous model
- New model uses Blincoe et al. (2015) as benchmark
- About 50% higher than previous model
The general philosophy behind NSC cost estimates is that the figures represent income not received or expenses incurred because of fatal and nonfatal unintentional injuries. Stated this way, NSC cost estimates are a measure of the economic impact of unintentional injuries and may be compared to other economic measures, such as gross domestic product, per capita income or personal consumption expenditures.
NSC identified a benchmark unit cost for each component, adjusted the benchmark to the current year using an appropriate inflator, estimated the number of cases to which the component applied and computed the product. Where possible, benchmarks were obtained for each sector: motor vehicle, work, home and public.
Wage and productivity losses include the value of wages, fringe benefits and household production for all classes, and travel delay for the motor vehicle class.
Medical and work-loss costs of unintentional fatal injuries are based on cost benchmarks from the CDC WISQARS Cost Model and multiplied by the NSC fatal injury estimate. Work loss includes earnings and the value of household production.
Medical and work loss costs for unintentional hospitalized injuries were computed by the PIRE from its costed version of the 2010 HCUP Nationwide Inpatient Sample, using readmission rates from HCUP. Work loss includes earnings and the value of household production.
Medical and work-loss costs of non-hospitalized injuries are based on costs from the WISQARS Cost Module for Emergency Department treated-and-released injuries and multiplied by the NSC estimate of number of non-hospitalized injuries. Work loss includes earnings and the value of household production.
Cost of motor vehicle property damage and travel delay costs were computed by PIRE from data used in Blincoe et al. (2015) and then multiplied by the NSC estimates of crash incidence (The Economic and Societal Impact of Motor Vehicle Crashes, 2010 Revised. DOT HS 812-013).
Cost per ambulance transport was benchmarked to National Medical Expenditure Survey (NMES) data, and cost per helicopter transport was benchmarked to data in Miller et al. (1993a). The number of cases transported was based on data from Rice and MacKenzie (1989) and the National Electronic Injury Surveillance System.
Administrative expenses include the administrative cost of private and public insurance, which represents the cost of having insurance, and police and legal costs.
The administrative cost of motor vehicle insurance is the difference between premiums earned (adjusted to remove fire, theft and casualty premiums) and pure losses incurred, based on data from A.M. Best. Workers’ compensation insurance administration was based on A.M. Best data for private carriers and regression estimates using Social Security Administration data for state funds and the self-insured. Administrative costs of public insurance (mainly Medicaid and Medicare) amount to about 4% of the medical expenses paid by public insurance, which were determined from Rice and MacKenzie (1989) and Hensler et al. (1991).
Average police costs for motor vehicle crashes were computed by PIRE from data used in Blincoe (2015) and multiplied by NSC estimates of the number of fatal, injury and property damage crashes.
Travel delay costs were obtained from NSC estimates of the number of fatal, injury and property damage crashes and an average delay cost per crash from Miller et al. (1991).
Legal expenses include court costs, and plaintiff’s and defendant’s time and expenses. Hensler et al. (1991) provided data on the proportion of injured persons who hire a lawyer, file a claim and get compensation. Kakalik and Pace (1986) provided data on costs per case.
Fire losses are based on data published by the National Fire Protection Association in the NFPA Journal. The allocation into the classes was based on the property use for structure fires and other NFPA data for non-structure fires.
Employer uninsured costs for work injuries is an estimate of the productivity costs incurred by employers. It assumes each fatality or permanent injury resulted in four person-months of disruption; serious injuries, one person-month; and minor to moderate injuries, two person-days. All injuries to non-workers were assumed to involve two days of worker productivity loss. Average hourly earnings for supervisors and nonsupervisory workers were computed and then multiplied by the incidence and hours lost per case. Property damage and production delays (except motor vehicle related) are not included in the estimates but can be substantial.
Lost quality of life is the difference between the value of a statistical fatality or statistical injury and the value of after-tax wages, fringe benefits and household production. Because this does not represent real income not received or expenses incurred, it is not included in the total economic cost figure. If included, the resulting comprehensive costs can be used in cost-benefit analysis because the total costs then represent the maximum amount society should spend to prevent a statistical death or injury. Lost quality-of-life costs are benchmarked using 2010 NCHS multiple cause of death data and the U.S. Department of Transportation’s estimate of $9.1 million (2012 dollars) as the value of a statistical life.