Measuring productivity and the benefits of interventions for osteoarthritis

| January 31, 2017

As the final blog for our Productive Ageing forum we explore why interventions for chronic health conditions should be measured and valued like other costs in economic evaluations.

Needing to increase labour force participation among older Australians, many of whom suffer work-limiting health conditions, is a pressing policy dilemma. The solution is at the intersection of social, health, and economic policymaking.

Osteoarthritis (OA) is one of many chronic conditions that have a significant effect on the labour force participation of Australians aged 45-64 years, who are the fastest growing age group in the working-age population (1). Early retirement due to OA reduces the income available to individuals and places a burden on the government due to lost income taxation revenue and increased welfare payments for retired individuals. (2)

Despite the high disease burden of OA, evidence on the full economic burden for individuals (and government) is only just emerging. Our literature review found that a wide range of methods have been used to estimate productivity losses due to OA, from a single measure of productivity (such as time to return to work, labour force status, hours of work) to well-established instruments where several aspects of productivity are evaluated. Yet many of the productivity measures from these questionnaires have only recently been assessed in terms of their attributes, (3) and estimates of the productivity losses for OA varied considerably across studies using the same instrument.

As with other instruments, issues surrounding understandability, suitability and sensibility in the population of interest need to be established for OA. Productivity measures that have not been captured in the studies relate to the translation of lost labour force participation into costs for individuals; costs for government; and costs for society.

The productivity costs missing from the literature are:

  1. A wider range of productivity losses for individuals. Such estimates would include not only lost income from lost labour force participation (or reduced paid working hours) but also the costs of informal care.
  2. Costs to government, which consist of extra welfare payments and lost taxation revenue due to the lost productivity of people with OA.
  3. Societal costs e.g. the percentage of lost GDP due to OA through its impact on work capacity.

It can be argued that productivity changes due to interventions for health conditions should be identified, measured and valued – just like other costs (and some benefits) in economic evaluations. (4)

We propose a measure called Productive Life Years (PLYs) Gained which is defined as the number of people who are out of the labour force due to their own ill-health (chronic condition) before treatment and subsequently return to work in in a given year. This measure takes into account (a) the measures used by government departments in projecting demand and supply in the labour market, and (b) the dual aims of the government to increase productivity and fiscal sustainability.

Interventions to manage chronic conditions have the potential to improve labour productivity of people with chronic conditions. This has flow-on economic benefits to individuals, in terms of increased earnings in addition to the health benefits, and the government, in terms of increased income tax revenue, reduced welfare payments and increased GDP.

The economic valuation of PLYs can be used to assist decision-making by policymakers in relation to resource allocation. These results indicate that there is a need to further examine and integrate productivity measures into clinical trials and other health intervention studies.

By doing so, there will be an opportunity to better understand the broader economic impacts, and establish the linkages between better health outcomes and broader economic contributions that result from pharmaceutical interventions.



  1. Productivity Commission, Economic Implications of an Ageing Australia, in Research Report. Productivity Commission. Canberra. 2005, Australian Government: Canberra.
  2. Schofield DJ, et al., Labour force participation and the influence of having arthritis on financial status. Rheumatology International, 2015. 35(7): p. 1175-1181.
  3. Tang K, et al., Sensibility of five at-work productivity measures was endorsed by patients with osteoarthritis or rheumatoid arthritis. J Clin Epidemiol 2013. 66(5): p. 546-56.
  4. Drummond MF, et al., Methods for the Economic Evaluation of Health Care Programmes. Third ed. 2005, Oxford: Oxford University Press.


Dr Michelle Cunich (a), Ms Sarah West (a), Dr Rupendra Shrestha (a) and Professor Deborah Schofield (a,b,c)

(a) Faculty of Pharmacy, Charles Perkins Centre, The University of Sydney, NSW; (b) Murdoch Childrens Research Institute, Royal Children’s Hospital, Victoria ; (c) Garvan Institute of Medical Research, Darlinghurst, NSW.

Acknowledgement: This is an excerpt of the research report funded by Medicines Australia.