Chapter 2 Flashcards
Opportunity cost
TRUE COST. The value of the best forgone option. “The next best option”
Direct medical costs
Most obvious to measure and are medically related inputs sed directly to provide treatment. Examples include: Drugs, IV supplies, lab tests, clinic costs and physician visits.
Direct nonmedical costs
Costs to patients and their families that are directly associated with treatment but are not medical in nature. Examples include: Cost of travel, child care services, lodging required for out of town treatment.
Indirect costs
Costs that result from loss of productivity (loss of income) Ex: Time off work to receive treatment.
Intangible costs
Cost of pain, suffering, anxiety, fatigue that occur because of an illness or treatment of an illness.
Health care sector costs
Medical resources consumed by health care entities
Other sector costs
Some diseases and their treatment impact other non-health care sectors such as housing, home maker services, and educational services.
Patient and family costs
Costs to the patient and their family with regard to whether the costs are medical or non medical in nature.
Societal costs
Costs to the insurance companies, costs to the patient, other sector costs, and indirect costs because loss of productivity.
Discounting
If costs are estimated based on dollars spent or saved in the future, discounting is the type of modification used and are estimated using a discount rate. Allows us to calculate the present value for something we will get benefit from over the course of the next few years.
Equation used for discounting
1/(1+r)^t
