The Illness Costs of Air Pollution in Ontario

A Summary of Finding

Acknowledgments

The OMA wishes to express its gratitude to many individuals and representatives of groups for their contributions and valued comments during the development of this findings report.

The Ontario Medical Association would especially like to thank the Walter and Duncan Gordon Foundation for its support of the work behind this report.

TABLE OF CONTENTS

Introduction

Background

Purpose and scope

Conceptual foundation

Demands on the health-care system

Summary

Health damage forecast for Ontario

Scenario 1 - Maintenance of current levels of pollution.
Scenario 2 - Potential impact of smog plan.

Conclusions and recommendations

Charts

Comparative human health damages with changes in air quality.
Comparative economic damages with changes in air quality.

INTRODUCTION

The significant and ground-breaking new research developed for the report details conservative estimates on the human and economic costs of Ontario's polluted air.

Air pollution costs Ontario citizens more than $1 billion a year in hospital admissions, emergency room visits, and ab-senteeism according to the analysis contained in the report. In addition, the report estimates the cost of pain and suffering and loss of life as a result of polluted air. These massive costs amount to billions of dollars for Ontarians.

Implementation of Ontario's voluntary Anti-Smog Action Plan on an accelerated basis to 2010 will improve matters, but only modestly. The OMA report suggests more must be done sooner, and with regulatory authority, to avoid preventable death and illness, and to reduce the large economic costs of polluted air.

Specifically, the OMA recommends that the governments of Canada and Ontario advance their action plans on smog in the context of a new public discourse that addresses the human and economic costs of polluted air.

Furthermore, the OMA urges continued action and attention to its 1998 recommendations on ways and means to reduce air pollution.¹

To support this effort, and for the first time ever, the OMA has developed a free interactive software program to accompany its research. By using the software, a user can:

• Calculate increased future air pollution costs if nothing is done about it.
• See how a reduction in air pollution would save lives and save money.
• Break all of this information out by region.

Background

In 1998, the OMA published The Health Effects of Ground-Level Ozone, Acid Aerosols & Particulate Matter. The study drew on medical research, much from Ontario, that demonstrated a direct connection between certain air pollutants and human health impacts. It made 25 recommendations as to how various levels of government could reduce air pollution to the benefit of the public, particularly in the province of Ontario.

The OMA also recognized the need to quantify the associated economic ramifications of air pollution, and the illness and premature deaths it causes, on Ontario's health-care system. This paper is a report on the findings of those recent efforts: The Illness Costs of Air Pollution (ICAP).

The OMA undertook the report and developed the ICAP interactive software model to assist in the public debate on Ontario's air quality.

ICAP seeks to provide technically sound and helpful information to health-care professionals, public policy decision-makers and the general public in considering these significant public health questions. ICAP forecasts the combined effects of trends like population growth, aging baby boomers, economic growth, reductions in air pollutant emissions, new epidemiological research results and other factors.

The ground-breaking software that accompanies the report findings is available at no cost from the OMA Web site (www.oma.org).

PURPOSE AND SCOPE

With ICAP, the OMA seeks to provide a widely available tool for people to gain improved understanding of air quality, and the impact of trends and government policies in terms of the future health and well-being of Ontarians.

Two parallel tasks were undertaken for this project. One involved compiling and analysing the diverse array of data required to generate estimates of economic damages associated with air pollution. The second task involved building an interactive software model with which to analyse the data. This findings report summarizes the former. The latter, the ICAP interactive software model, is configured to run using Ontario data. ICAP's basic concept and structure is applicable to any jurisdiction concerned about air quality impacts on human health. The underlying scientific foundations for this study have wide application far beyond the boundaries of Ontario.
 

CONCEPTUAL FOUNDATION

Overview

The baseline and forecast pollutant concentrations used in this analysis are annual averages. The composition and geographic distribution of the Ontario population in 1996 is used as the starting point for all future projections. The population is forecast to expand at different rates in different geographic areas. As well, the composition of the population in terms of age and gender is forecast to change. Future illness frequencies will change, not only as air quality conditions change, but as the composition and distribution of the population changes. For this reason, a population forecasting component is an integral part of ICAP.

Government initiatives are periodically introduced which are designed to control air pollution. However, as economic activity grows, increases in resulting air emissions may outstrip initiatives to reduce pollution.

Thus, evaluating the potential benefits of air quality policies requires not only knowledge of current air quality conditions, but also an understanding of how air quality is likely to change in the future given alternative courses of action and outcomes. Forecasting future air quality involves determining future pollutant emission rates, atmospheric transport/dispersion and chemical transformations.

Improving air quality can be costly. The OMA has reached the conclusion that measuring reductions in air pollution as tonnage reductions by polluters does not sufficiently inform public debate. Rather, the effect on human life and the costs borne by the community are the outcomes about which people care.

The OMA chose four key indicators to determine the advantages of improving the impact of air pollution on Ontarians:

1. The illness induced and the resultant cost to the health-care system.
2. The cost of lost productivity and absenteeism in the workplace.
3. The economic value of the pain and suffering of those who are ill.
4. The economic damages of premature death.

The first two indicators are direct out-of-pocket expenses to the public and taxpayer, but the researchers have endeavoured to quantify the costs of pain and suffering and premature death as well, using standard economic methodology.

Throughout this report, the OMA used only the most reliable data available. Every selection withstood the scrutiny of transparency, accuracy and reliability. Where the quality of data did not meet this test, it was not used. In all cases, the estimates are conservative.

Recognizing the conservative approach of the model, the OMA anticipates that the costs of polluted air will actually be higher, perhaps even significantly higher, than projected in this report.
 

DEMANDS ON THE HEALTH-CARE SYSTEM

Hospital Admission Costs

Emergency Room Visit Costs

Doctors' Office Visit Costs

When a reliable estimate of the number of these visits is developed, it will drive the economic damage estimates for air pollution upward.
 

Medication Costs

Lost Productivity

This amount represents real costs borne each year by employers and employees. These costs are a permanent loss to the people of Ontario.
 

Quality of Life

Risk of Mortality

The value of avoiding the risk of mortality is age-sensitive. The highest value is typically associated with middle-aged individuals. This factor has been included in the economic damage estimates.

Some have argued for inclusion of an economic "advantage" due to premature mortality and subsequent reduced consumption of health-care services. In other words, having air pollution kill the weak and the sick may reduce demands on the health-care system.

The OMA comes down squarely on the side of illness prevention, and life over death. Nonetheless, for statistical purposes, an allowance has been deducted from the value of loss of life to account for the reduced health-care demands of those likely to die prematurely.

SUMMARY

Over time, significant advances in knowledge and data will likely continue to occur. Economic analysis of environmental policies needs to be repeated frequently. The results of new forecasts may require reconsideration of air quality policy decisions. ICAP has been designed expressly for this purpose. As better information becomes available, it can be incorporated, analysed and its implications considered.

ICAP is designed to promote the development and synthesis of better information and knowledge and to facilitate the best use of this information and knowledge in making important public policy decisions. The data and analytical methodologies set out in this section and accompanying appendices should be seen as a starting point, not the final word. Better information will result in better forecasts of the benefits of air quality improvement.

Any research exercise must be accompanied by caveats. This one is no different. However, the OMA is confident that the research, analysis and numbers are conservative in all cases.

 

HEALTH DAMAGE FORECAST FOR ONTARIO

In the course of the research, the OMA felt it would be useful to take the findings and place them in the existing policy framework in Ontario. In addition, the study compared and contrasted these findings with recommendations published in the OMA's 1998 paper: Health Effects of Ground-Level Ozone, Acid Aerosols & Particulate Matter.

The two scenarios the OMA would like to examine are:

1. Maintenance of current Ontario air pollution concentrations.
2. Full implementation of Ontario's Anti-Smog Action Plan in 2010.

Scenario 1

Maintenance of Current Levels of Pollution

The majority of these illnesses are attributable to PM₁₀² with ozone accounting for about half the hospital admissions and emergency room visits. These health damages equate to a total of about $600 million in costs to the health-care system and another $560 million in direct losses to employers and employees. This represents over $1 billion in direct costs to the people of Ontario. If one uses conservative estimates of the value of pain and suffering, and loss of life, these add a staggering $5 billion and $4 billion respectively to the total. This gives a total annual economic loss of $10 billion in 2000, rising to $12 billion by 2015.

Scenario 2

Potential Impact of Smog Plan

Full achievement of its targets would save Ontario annually in avoided health damages about 290 premature deaths, 2000 hospital admissions and 7,700 emergency room visits. As well, the number of minor illness cases would drop by about 6 million.

On the other hand, after full implementation of the smog plan in 2015, Ontario would still experience in the order of 2,500 premature deaths, 13,000 hospital admissions, 18,500 emergency room visits and 46 million minor illness cases per year, which would be attributable to air pollution.

The economic benefits of the smog plan in 2015 would total in the order of $1.2 billion annually, with $680 million resulting from avoided premature mortality, $600 million in avoided pain and suffering and $150 million in avoided lost productivity and health-care consumption.

The residual economic damages for the province (i.e. those health damages that will continue to be suffered after the smog plan is in full effect), would total in the order of $12 billion per year. Of this, $5 billion would be accounted for by premature deaths and $6 billion would be attributable to pain and suffering.

Overall, the smog plan would reduce in 2015 economic losses in Ontario due to anthropogenic ozone and PM₁₀ by about 11 per cent annually, only a modest improvement.
 

CONCLUSION

In the past, the governments of Canada and Ontario have not forecast the resultant effects of smog reduction plans. It follows that any analysis of the illnesses resulting from air pollution, and their associated costs, is hampered. Consequently, it is unclear as to whether the suggested anti-smog actions truly represent a remedy.

The Ontario Medical Association therefore recommends that the governments of Canada and Ontario advance anti-smog action plans in the context of public forecasting models that are supported with the human and economic costs associated with air pollution.

Furthermore, the OMA urges continued action and attention to its 1998 recommendations on ways and means to reduce air pollution.
 

2. PM10 is a measure of small airborne particles called particulate matter that are 10 microns in size or less.

CHARTS

Comparative Human Health Damages With Changes in Air Quality

Comparative Economic Damages With Changes in Air Quality