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SUMMARY
This report presents a plan for a congressionally mandated study
of costs of environment-related health effects. It includes a
framework for an ongoing study that would improve the data and
methodologies available to relate environmental hazards to health
problems and the costs of these health problems. However, the
commi tree that is presenting thi s plan and related findings also
cautions that the broad scope of the congressional charge far exceeds
what is feasible in our present state of knowledge and that a more
systematic effort that evolves over time is needed to derive
consistent information on costs of environment-related health effects.
Ways that environmental factors affect human health and
well-being have attracted growing attention in recent years, with
much illness and disease now believed to be associated with
environmental factors. The environment in this context includes all
extrinsic factors that affect human health. Modification of
environmental conditions should provide a promising opportunity for
reducing illness and disease and their associated costs. There also
has been increasing concern about costs of illness--medical costs in
1979 were $212 billion, or 9 percent of the Gross National Product .
In addition, questions are being raised about the effects on the
economy of the almost two dozen environment-related laws enacted in
the l97Qs. While estimates of costs associated with attempts to
improve the environment abound, data on the health benefits
attributable to these improvements are scarce.
Recognizing a need for more adequate information, Congress
enacted Public Law 95-623, the Health Services Pesearch, Health
Statistics, and Health Care Technology Act of 1978. This report
responds to Section 7 of the law, which calls for an "ongoing study
of the present and projected future health costs of pollution and
other environmental conditions resulting from human activity," and
the reduction in health costs that would result from changes in these
conditions. Thus, the law asks for estimates of the health benefits
of an improved environment. It calls also for biennial reports that
include recommendations on matters related to the ongoing study.
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Because of the law's broad scope, the planning committee
considered which aspects of the environment should be studied first.
In its broadest context, the environment includes all extrinsic, that
is, non-genetic factors that may influence health, including agents
in the natural environment, such as sunlight, and factors directly
attributable to human activity, such as exposure to synthetic
chemicals. Many factors in the environment are beneficial in
moderate amounts, such as fluorides in drinking water, but harmful in
large amounts. Environmental conditions include activities often
classified as "lifestyle" or "voluntary," such as habits of
nutrition, alcohol consumption, and smoking, and conditions usually
considered "involuntary," such as exposures to noise, chemicals, air
pollutants, and radiation. Factors related to the social environment
and socioeconomic status also are part of the human environment.
The committee recognizes that these many environmental factors
interact with each other and with the individual to influence health
status. Nonetheless, after extensive discussion of the he's
apparent intent, the committee recommends that the ongoing study
focus initially on adverse health effects and their costs resulting
from involuntary exposures to physical and chemical agents derived
from human activity, taking into account other factors when they
modify the effects of these physical or chemical agents . For
example , studies of respiratory illness among miners should include
smoking history. Whenever possible, data related to these other
factors should be collected and made available for later analysis.
Diseases and illnesses of concern include those mentioned in the
law, such as heart disease, respiratory illness, and birth defects,
but are not limited to these. Environmental factors can adversely
affect many parts of the body, such as the skin, the nervous system,
the immune system, and the reproductive system.
Conduct of the ongoing study requires information related to
sources of environmental hazards, human exposure to these hazards,
resulting health effects, and, finally, costs attributable to these
health effects. The Institute of Medicine undertook this planning
study to faci litate the ongoing study' s proceeding in an orderly and
use ful way.
The planning study goals, as related to the organization of this
report, were to
0 describe the basic information requirements necessary
for the ongoing study and for the biennial reports
[Chapters 2,3,4]
0 provide a framework for the ongoing study and an assessment
of the feasibility of meeting the various requirements of
the law "Chapters 3,4,6]
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recommend administrative arrangements for carrying out the
ongoing study [Chapters 5,6]
recommend steps to maximize the usefulness of ache biennial
reports ~ Chapters 5, ~ ~ .
The committee recognizes the desirability of developing the kind
of information and analyses requested in Public Law gS-623. It
emphasizes that there are ma jor deficiencies In data bases,
me tl~odologi es, admi n ~ s trat ive procedure s, and mos t importan t,
theoretical knowledge for relating environmental hazards to health
problems and their associated costs. These have precluded earlier
straightforward assembly of the information. It is the comm;~ctee' s
view that it is useful to attempt to develop the estimates requested
in P.L. 95-623--even though much of the information cannot be
provided in the near future--because improvements in data and
methodologies can advance basic knowledge and lead to more informed
deci signs .
In the early stages of the ongoing study, it wi 11 become more
apparent to what extent the Coals of the ongoing study can be met.
There wil1 be substantial uncertainties in any estimates of health
effects and costs the ongoing study develops, but the committee
concluded that these uncertainties can be reduced and that more
informed decision making will thereby result. Recognition of the
degree of uncertainty can itself' guide decision making and the
collection of new information.
The commi ttee has not proposed 8 stec-by-step plan for the
ongoing study, but rather a series of phased activities, including
case studies, methodological research, and evaluative efforts to
develop the required data bases and strategies for ar~alyzing them.
flee ongoing study will di ffer from many related studies because it
will emphasize the entire spectrum of information and techniques
needed to Pet and analyze the data. The framework of required
information that provides the basis for the committee 's findings and
recommendations i s presented in Chapter 1.
Approach for the Ongoing Study
s tudy
The committee identified several broad goals for the ongoing
o Integrating avai fable data
.
The ongoing study should help generate, coordinate, and
integrate environmental and health data for use in identi fair
re 1 at i onshi ps among hea 1 th prob 1 ems and thei r environments 1 causes
and to enable evaluation of the consequences in terms of health
costs . Although this planning study primari ly emphasizes
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epidemiologic data, that does not reduce the importance of research
on animals and other organisms to discover risk factors in advance of
human exposure and to extend the information obtained from human
studies.
o Coordinating statistical policy
The study should encourage various groups, especially in the
federal government, to explore the administrative and policy
questions that hinder coordination of statistical information. Data
integration and linkage among current large data collection
activities should be encouraged, consistent with the protection of
confidential information and individual privacy.
o Developing health cost estimates
The ongoing study should lead to improved data and methods for
evaluating and expressing health costs in monetary terms, as well as
in terms other than dollars, such as number of days ill.
o Encouraging research
The ongoing study should highlight areas needing further
methodological development and research, including basic biological
research.
O Assuring continuity, funding, and flexibility
Because a short-term effort will not be particularly worthwhile
towards achieving the goals of the ongoing study, provision for a
long-term effort, including adequate funding, is required. Costs of
carrying out the ongoing study will depend greatly on the extent to
which the recommendations in this report are carried out. After
reviewing avai fable information in the early phase of the ongoing
study, it should be possible to estimate to some extent costs of
working towards filling the most pressing gaps in data and analyses,
using criteria listed below for setting priorities. In some cases,
it might be deemed not worthwhile to pursue certain activities
because the costs of obtaining needed data may be great and the
possible benefits relatively small or exceedingly uncertain. Costs
associated with the ongoing study will need to be reassessed
periodically in response to new conditions and information.
The Early Phase of the Ongoing Study
The early phase of the ongoing study should have the following
four related and intertwined activities, which may continue in
modified form throughout the study.
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o Revi ewi no wha t i s known
Information wi 11 be identi fled and assessed on the sources and
amounts of pollutants, levels of human exposure to these
environmental hazards, the health effects resulting from such
exposures, and costs of the diseases and health effects of such
pollutants. On the basis of thi s information, priori ties for further
studies of various environmental agents and health problems can be
set according to the following criteria
o the magnitude of their known, suspected, or potential health
impacts, taking into account the amount of the hazardous
material in the environment
o the reliability of existing knowledge about them and the
potential usefulness of additional information in minimizing
harmful effects
0 the public perception of their importance
o the need to study them further for policy purposes.
O Assessing the importance and promise of available information
-
From the above activities, data needs will be identif~ed,
promising areas for research will be outlined, and additional
recommendations will be made for assembling the required data.
O Developing illustrative case studies
Case studies will attempt to integrate the many kinds of
information needed to meet the congressional request. The
development of concrete cases should demonstrate the practical
difficulties, complexities, and uncertainties encountered in
providing the estimates Congress wants. It would be particularly
important to extract from these case studies any generalizations that
might apply to methodology and to economic, political, or ethical
issues .
Two case studies should be undertaken at the outset. One would
focus on ~ health problem and consider exposures as environmental
determinants. The other would focus on a pollutant or source of
pollution and consider all health consequences. Cost estimates would
be attempted in both case studies. The approach should be to choose
cases in which the etiologies are relatively well understood. These
examples might serve:
Health problems--chronic respiratory disease, lung cancer,
angiosarcoma, chronic disorders of the nervous system
Pollutants--asbestos, vinyl chloride, lead, nitrosoureas.
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o Desi gnino new methodologies
In addition to the studies indicated above, the ongoing study
needs a program to develop new methodologies. Once systematic
attempts are mace to assess current information, it will become clear
which areas require new methods to get quantitative results. The
ongoing study, therefore, must explore the comparative meri ts of
various data sources and methods for estimating health effects of the
envi ronment and thei r cos t s .
Some approaches entirely di fferer~t frown these customari ly taken
may merit development and apprai Sal . These could include new ways of
assessing fractional contributions to i llness and their costs other
than on a sub~tance-by-substance or disease-by-disease basis. On the
biological side, animal and other laboratory models offer attractive
alternatives to putting human beings at hazard and may save enormous
effort and time in risk estimation for the human population. Also
required i s a consistent analytical methodology to model health
outcomes on the basis of information from many different sources and
of varying degrees of certainty.
The Biennial Reports
The biennial reports should contain data tables as well as the
case studies and other descriptive material. Because methodological
development is crucial, the committee suggests that periodically, as
part of the ongoing study, ~ systematic review of the meth,odologies
avai fable or being developed to do the work of the ongoing study be
collated, summarized, and published. Almost all estimates obtained
as part of the ongoing study will have substantial uncertainty, that
is, the actual values could be quite di fferent from the estimate.
The usefulness of the biennial reports will depend in part on how
successfully the uncertainty is expressed.* As examples, public
interest organizations, state and local officials, industry, labor,
federal government officials, and researchers may use the data and
reports for such specific purposes as setting policy, modifying work
conditions, presenting a case in court, setting pollution emission
standards, or planning a research pro ject . In all these si tuations ,
estimates of the uncertainty of the avai fable data and information on
the methodological underpinning for estimates will be helpful.
.,
=Even i f the uncertainty spans a range of one or more factors of
10, so that an estimate of 1000 might actually be loo or 10,OOO with
some probabi lity, that information may sti 11 be useful for making
decisions. One of the goals of the ongoing study is to reduce these
uncertain" ies .
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The committee makes the following recommendations about
expre s s i no uncertainty
Estimates of uncertainty should be attached to
each estimate of amount of pollution, health
effect, or health cost.
A description of the ma jar sources of uncertainty
shou Id be provi deaf .
Whenever possible, the reporting system should
employ numerical estimates, rather than imprecise
terms such as "high," "medium," and "low."
Admini strat ive Arrangements for the Ongoing Study
According to PeLe 95-62 3 ~ the Department of Health and Human
Services (nighs) and the National Academy of Sciences (NAS) are
jointly responsible for the ongoing study. The NAS is a private
organization chartered to provide independent advice to the
government. Several officials of the NAS believe it ~ s inappropriate
to undertake a study jointly with a government agency, because such
an arrangement would compromise the NAS' historical role as an
independent advisory body.
Thi s TOM planning co~rrmi ttee recommends that the
law be amended so that the NAS could serve in i ts
customary advi very role .
It i s believed desirable for the NAS to participate actively in the
ongoing study on a continuing basi s . Further detai Is of the
relationship would be arranged by officials of DENS and NAS.
Whatever relationship is arranged, the TOM planning committee
recommends an administrative arrangement that fixes responsibility
and author) ty for the ongoing study in one clearly defined body.
Within the constraints of the present law, the commi ttee
describes what it believes to be the best of several alternative
arrangements it considered in attempting to delineate some areas of
joint activity whi le preserving the NAS ' role as an independent
advi very' body. Most of the particulars of this arrangement could
apply whether NAS served in a preferred advisory capacity or in an
arrangement involving joint responsibility. DENS is assumed to be
the lead government agency in the proposed arrangement, which entails
formation of two committees, one organized by NAS and the second by
DENS, each with different responsibilities for carrying out specific
tasks of the ongoing study. The NAS would establish a permanent
commi t tee wi th a rotating membership that included representation of
the Institute of Medicine and other appropriate bodies within the NAS.
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The DHMS committee would have primary
responsibility for operation of the ongoing study,
for intergovernmental relationships involving the
study, and for generating and assembling the
data. The NAS committee would have lead
responsibility for developing research goals, for
much of the data analysis, and for overall
evaluation of the program. The actual collection
of the data would be the responsibility of
individual agencies.
The two committees would have joint responsibility for other
areas, such as developing priorities for each biennial report and the
specifics of its preparation, and recommending areas for study and
subjects for special monographs. The committees would review the
reports and provide evaluations to the Secretary of HAS.
Chapter 5 presents other options for a lead federal agency and
describes some of the difficulties inherent in coordinating an effort
as extensive as the ongoing study. The various federal agencies,
including those mentioned in the law, collect data in ways that
respond to the needs of the particular agency, and appropriate
incentives may be required to achieve the desired cooperation.
However, voluntary cooperation should be sought by means that may
include financial incentives and instructions, before further
statutory means are undertaken. Many related efforts at coordination
already exist; Appendix D lists about twenty interagency groups
concerned with environmental health issues. This report emphasizes
that whatever administrative arrangement is chosen should encourage
mutually beneficial interactions with-the many groups--both in and
outside the federal government, including international
organizations--that have an interest in the ongoing study.
Improving Information for the Ongoing Study
In addition to suggesting a framework and administrative
arrangement for the ongoing study, this committee made
recommendations to improve the data and methods needed to provide the
estimates Congress requested. Recognizing that resources are scarce,
the committee recommends that existing data systems be used to the
fullest extent, and that they be modified or expanded where feasible
to facilitate relating exposure to health outcome and associated
health costs. If new data systems related to health, the
environment, or health costs are set up, experts in fields relevant
to the ongoing study should work together so that the resulting data
systems are useful for the ongoing study.
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Representative terms from entire chapter:
direct costs
Relating Exposure to Health Effects
There seldom is a simple relationship between environmental
hazards and health effects. The contribution of ~ given
environmental factor can vary, depending on the conditions under
which it is encountered, the presence of other factors in the
environment that may modify its effects, and the susceptibility of
the population exposed. A given substance can lead to multiple
health problems, and people are exposed to a variety of potentially
hazardous substances in their surroundings. It is extremely
di fficult to determine causes of health problems that result from
relatively low levels of exposure, especially i f the resulting health
problems occur after a long latent period and have no features
specifically identifying them as environmentally caused. The need
for new kinds of data is, therefore, great.
Appendix C i llustrates the variety of health effects, ranging
from mi Id discomfort to fermi nal i l lness, that have -been associ ated
wi th envi ronmen t a 1 fac t ors . Th e c omrn.~ t t ee emph a s i ze s th a t
Major efforts should be undertaken to improve our
abi li ty to relate environmental hazards to health
ou tcome .
The greatest needs for improved data lie in the general areas of
actual exposure of individuals and groups, and more ~co~nplete
reporting of morbidity, including partial disabilities, as well
mart al i ty.
As described in Chapter 2, the exposure data reseeded to determine
dose /response curves are rarely avai fable . Exposure estimates are
often based on calculations that use surrogate measures, such as
ambient concentrations of materials in food, water, and air. Methods
for more adequately assessing individual exposure should be explored.
Although exposure episodes resulting from industrial accidents
or chemicals leaking from toxic dumps should be prevented by all
practicable means, these inadvertent events can sometimes provide
useful information about health effects of environmental exposure.
Therefore,
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programs among workers and other populations can monitor the
effectiveness of efforts to prevent health problems from known
hazards, and can also alert observers to new hazards.
Longitudinal studies, which follow individuals over an extended
time, provide a broader range of information than can other
epidemiologic study designs. As an example, the Framingham Heart
Study, begun over 30 years ago, has elucidated some of the major risk
factors in heart disease. For purposes of the ongoing study, the
committee notes that longitudinal studies will be required to obtain
dependable, useful, population-based information.
Longitudinal studies and development of
appropriate data bases should be undertaken, and
the needed long-term commitments of funds and
personnel assured.
The more powerful epidemiologic study designs also tend to be the
more expensive. Appendix E gives some associated cost estimates.
In the workplace, the possibility of associating exposure with
health outcomes is high, and occurrence of occupational disease often
constitutes the first warning of a new environmental hazard. The
exposed populations can be identified and followed and the exposures
often can be quantified, at least to some extent. Furthermore,
occupational populations may encounter new toxic substances sooner
than does the general public, and in greater amounts.
Many of the previous recommendations for determining health
effects apply particularly to the occupational environment. In
general, any epidemiologic study should obtain information about
occupation and industry where applicable. Additional specific
recommendations for monitoring worker populations follow.
Better information on occupational exposures
should be sought. A National Occupational Hazards
Survey should be conducted at regular intervals
and the results disseminated widely.
To hi ghl i ght occupations wi th increased mortality,
the feasibility of instituting a national
decennial occupational mortality series, such as
Great Britain produces, should be explored.
A li st of sentinel health events for occupational
disease and illness should be developed to alert
people to potentially preventable occupational
health problems.
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Problems of human reproduction received particular consideration
from the committee. These problems include loss of libido, inability
to conceive, having a miscarriage or stillbirth, or having ~ child
with low birthweight, with physical or mental impairment, or one who
develops cancer or other i llness as a result of prenatal exposure.
Environmental agents can affect the reproductive capacities of both
males and females. Appropriate surveys and records are needed to
monitor reproductive outcomes to associate adverse outcomes with
possible environmental exposures, especially exposures that occur in
the workplace.
Problems of individuals within the population with special
susceptibility also were considered. These include individuals in
certain age groups, for example, infants and the elderly, those who
may have suffered previous exposures that led to heightened
susceptibility, and those with particular genetic traits (See
Appendix F). Identifying individuals of greater susceptibility to
speci fic environmental factors can be important in developing
occupational and environmental health policies, and in interpreting
environment-related health statistics, but can also raise many
difficult questions.
Estimating Costs
Cost estimates must be used with due recognition that they
i lluminate value judgments but do not replace them. They are not a
substitute for the political and administrative processes of
environmental decision making, but they are invaluable in informing
them.
Estimation of costs will depend to a great extent on the data
available to relate health problems to environmental hazards.
However, even if these data were available, theoretical and practical
problems would sti 11 make cost estimates difficult. Chapter If
discusses some of the difficulties in estimating the costs enumerated
in the law, using the two methods commonly employed to estimate costs
of health effects in monetary terms--the output-accounting (or
human-capital) approach and the wit lingness-to-pay approach. Output
accounting measures direct costs for medical expenses and indirect
costs that correspond to lost output. Wi llingness-to-pay measures
the resources individuals would forgo to reduce a risk of death or
illness.
Each method has limitations and is appropriate only for certain
applications. Major functions of the ongoing study are to assess the
suitability of the available methods and data for providing the cost
estimates Congress has requested and to foster improved methodologies
and data. In order to indicate the range of possible results within
the limits of accuracy of avai fable methods,
—1 1—
Health costs should be calculated using both
output-accounting and wi 1 lingness-to-pay methods,
to the extent feasible. In the first few biennial
reports of the ongoing study, estimates of
monetary losses due to morbidity and mortality
associated wi th environmental factors should be
presented using a range of fixed values Drawn from
existing studies for cost per death, cost per day
of i llness, and cost per year of li fe lost.
An illness or disease can result from several independent or
interacting causes, which may include one or more environmental
factors. However, environmental agents may increase the severity and
costs of an illness, as well as the number of cases of illness. For
example, air pollution may exacerbate asthma. Attempts should be
made to determine the proportion of tote' health costs of a disease
or illness that should be attributed to environmental factors if a
certain proportion of the cases could reliably be estimated as caused
by these factors.
Although the estimate of total national health care expenditures
(direct costs) is reasonably accurate, the methods of allocating
these costs among diagnoses need improvement. For example, although
many patients have multiple health problems, costs are allocated to
the primary diagnosis. Consequently,
An investigation should be made of the
difficulties of analysis introduced by the
presence of multiple diagnoses.
The committee recommends steps to enhance the data available for
estimating direct costs
longitudinal survey of patients in a prospective
study of costs by diagnosis should be begun. In
addition to longi tudinal surveys, cross-sectional
surveys of patients to determine utilization and
costs of medical care should be considered as a
source of information about direct costs and
health effects.
A longitudinal study would enable more accurate allocations of direct
costs among particular illnesses and diseases and also should provide
valuable new kinds of information about the distribution of costs of
an illness or disease over an extended time. There is a particular
need for longitudinal studies to provide incidence-based cost data
(that is, the present and future costs (from discovery until cure or
death) of new cases of the diseases discovered during a specified
time period), in contrast to the usual cost estimates, which are
prevalence-based (that is, give the costs incurred during a specified
time period by all cases of a disease that existed during that time
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period regardless of when they began). Existing data sources also
should be used to develop profiles of medical care costs that
individuals with specific diseases or illnesses incur. The committee
further recommends that prevalence- and incidence-based studies be
compared to see how closely prevalence-based costs approximate
incidence-based costs in situations where incidence-based costs would
be more appropriate. This type of comparison would be valuable
because prevalence-based data are more easily obtained than
incidence-based data.
For estimating direct costs,
Net direct costs of illnesses should be calculated
in addition to the total direct costs now reported.
Total direct costs are direct costs as conventionally estimated. Net
direct costs take into account future direct costs, appropriately
discounted, that would have been incurred if the person had not
died. Net direct costs of a disease or illness are the total direct
costs minus the discounted value of the health costs for other health
problems that would have been incurred if the person had survived.
Net direct costs are the appropriate measure of direct cost
reductions that could be expected if the incidence of an illness or
disease decreased; use of total direct costs instead of net direct
costs would exaggerate the savings in medical expenditures that could
be realized by eliminating some diseases.
Indirect costs include loss of output because of illness or
death of the worker. The loss of output for employed workers is
measured by their earnings, including supplements to wages paid by
employers. To improve the quality of data on indirect costs due to
mortality and decreased productivity, the committee recommends that
New data sets containing personal and job
characteristics for workers should be developed.
They should include major personal
characteristics, health histories, and work
histories, including occupation, industry, and
firm.
Improved methods for valuing non-market time, including time for
housekeepers, retirees, the unemployed, and others not in the labor
market, are also required.
Willingness-to-pay est imate s depend primari ly on two types 0 f
data--wage premiums pal d for ri sky work and surveys that ask people
how much they would pay to reduce their chance of illness or death by
a small amount. The values of willingness-to-pay may be based partly
on the same considerations of mortality, direct medical costs, and
lost output as output accounting, but also include lost leisure,
pain, suffering, and other subjective costs of illness. In
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principle, all costs that matter to the potential victims are
included. However, the wage premiums for risky work assume that
workers are fully aware of the hazardous nature of the job.
Recommendations for improving willingness-to-pay estimates of health
costs associated with environmental hazards follow.
Wage data used in willingness-to-pay estimates
should be improved.
According to economic theory, the appropriate measure of risk
premiums should use after-tax wages rather than before-tax wages.
However, information related to gross wages also should be available
for other types of calculations.
Surveys should supplement the use of market-based
studies in estimating risk premiums paid to
workers.
The committee proposes that, after identifying to the extent possible
the diseases and symptoms caused or exacerbated by environmental
hazards, the ongoing study should include surveys to assess the
willingness-to-pay to avoid the health effects. Health effects of
concern might include acute and chronic respiratory disease, angina,
or death from a specified disease.
Pain and suffering that accompany illness and disease can lead
to a variety of psychosocial problems such as reduced self-esteem,
social isolation, and emotional problems for the individual and the
victim's family. Although some recent attempts have been made to
evaluate these by the output-accounting methodology,surveys of
willingness-to-pay seem at the moment the most promising method for
measuring costs of pain and suffering.
It is recommended that questions be added to
surveys to determine if they yield consistent and
reasonable answers for valuing pain and
suffering. Any approach to the measurement of
costs of pain and suffering must be regarded as a
re search problem at this time.
Conclusion
Although the cost estimates that Congress has requested cannot
be obtained with precision soon, attempts to obtain such estimates
can be helpful in making decisions so long as the assumptions,
limitations, and uncertainties of any estimates are clearly
indicated. The ongoing study provides a unique opportunity to evolve
new methodologies and to focus and coordinate widely scattered
efforts to determine the health benefits associated with improvements
in the environment. These efforts should enhance our ability to
prevent health problems associated with environmental factors .
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