Is Health Really the Link between Alcohol and Wage? - A Study on Alcohol Related Medical Care Costs of Low Alcohol ConsumptionA large area of research in health economics deal with the relationship between alcohol consumption and wage. A number of studies have shown a positive wage effect of alcohol consumption, especially for low and moderate consumption levels. Several of these studies suggest that this positive relationship could be explained by the positive health effect on a number of diseases of low and moderate alcohol consumption for individuals in working age. However, this explanation is contrary to the indications made in the literature of relative risks of alcohol consumption although it has some support in the literature of medical care utilisation.
The aim of this paper is to calculate the net number of care episodes and costs for low consumers in medical care in Sweden 2002 in a COI framework. We investigate whether the health effect argument in the alcohol-wage literature can be supported.
The net effect of low alcohol consumption on care episodes is calculated firstly by establishing total alcohol related episodes in medical care (separately for inpatient-, outpatient- and primary care) by calculating the alcohol attributable fraction (AAF) jointly for all consumption groups using prevalence of consumption and relative risks for different diseases compared to abstainers. Secondly, we calculate the AAF for each consumption group separately and apply the proportions between groups on the total number of alcohol related episodes, resulting in the number of alcohol related episodes for each consumption group, separately for men and women in five age groups (18-80+). These episodes are valued according to the cost per visit in outpatient- and primary care (weighted for resource use of different types of visits and medical personnel) and a shadow price of disease specific cost per episode for inpatient care (weighted using DRG-points and total cost of the specific ward/clinic/hospital) supplemented with disease specific cost per care day where needed.
Our findings show that low consumption carries a net cost for medical care in Sweden 2002. Only for the oldest age group, a group mainly outside the labour force, is there a net benefit. The costs have the same structure for both men and women. In addition to this, the results show that low alcohol consumption causes more care episodes in medical care then what is spared. Both the effect on costs and on number of care episodes are mainly driven by outpatient- and primary care as inpatient care to a large extent show beneficial effects of low alcohol consumption, especially for women.
The findings of the study cast doubts on the common argument that the positive wage effect of alcohol consumption found in several studies is due to the positive health effect of low alcohol consumption. Rather do these findings indicate that low alcohol consumption, on average, have a negative impact on health which in turn is expected to have a negative effect on wage. The explanation of the positive wage effect connected to alcohol consumption must therefore be sought elsewhere, e.g. social networking and quality-of-life.
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