Costing Flashcards
What is costing?
The act of measuring and valuing resources. The true cost of these resources is in their opportunity cost, but given as a cost total or incremental cost ( difference from the comparator) in monitary terms only.
what are the three main perspectives that costing can be done for?
Healthcare perspective: costs that the healthcare sector would need to budget for e.g. hospital stays, doctors and nurses wages, drug costs, complications treatment etc.
Governmental perspective: Healthcare costs and other public services e.g. PH initatives.
Societal perspective: Including patient costs too e.g. transport to hospital, productivity losses, carer costs etc
Two ways of calculating the cost due to the loss of productivity?
- Human capital approach- Gross wage rate x time off + non-wage labour costs (I.e. Costs to get someone else to do work and additional fees e.g. insurance pension contributions etc)
- Friction cost approach: Recognises the effects of long term sickness would be overcome by employer taking on a replacement staff- often at a higher cost due to short term cover prices.
Perspective of costing for CEA?
Not stated but Societal- costs to users, and health services
Perspective of costing for CUA?
Healthcare costs and benefits
Perspective of costing for CBA?
Employer perspective- costs in loss of productivity included
Perspective of costing for CCA?
Varies- costs can include everything from wages,transport, training, prescription and healthcare costs.
Primary data sources used to calculate costs?
- RCTs- but may not be representative of real life but randomised etc so high internal validity.
- Routinely collected data- may not have linked outcome data or have cost data on if not on market yet, but for comparator useful. E.g. GP visits etc.
- Clinical database for specifc diseases- not always used.
- Patient medical records- or questionnaires.
Secondary data sources used to calculate costs?
- Published studies by others- either RCTs, or observational, systematic reviews or meta-analysis.
- useful for use in economic modelling, rather than evaluation alongside a trial. Challenge is finding representative studies.
After recorded and measured resource use- what is the difficult part?
Valuing the resource use. Market value estimates the opportunity costs.
Mostly use average costs (unit cost)= total/unit quantity
But marginal costs may be more useful locally=costs for an additional one unit of output, as there could be a fixed price and units above this are cheaper
Marginal costs vs average unit costs?
costs for an additional one unit of output, as there could be a fixed price and units above this are cheaper.
E.g. for 5 strawberries would be price of the bush (capital costs- one time investment fixed costs) and maintainence and labour costs (operating costs- variable)- equal= £1, but for another 1 stawberry instead of another 20p (average unit cost) already have the bush and maintainence, just need labour to pick the extra strawberry (variable costs that vary with the unit amount) so may be £1.02 another 2p marginal cost.
Tangiable vs intangiable costs?
Tangiable: costs which have a known and identifable monitary value e.g. aspirin.
Intangiable: costs with no easily identifiable value e.g. time spent travelling to hospital.
What are inputed costs?
When price is not available and use the price of a similar resource e.g. using wages rate for a cleaner to value housework
Sources of cost data?
- Hsopital costs from a reference costs database, or healthcare resource group (HRG)
- community- primary care, personal and social services research unit (PSSRU)
- Pharmaceuticals- BNF british national formulary
- other costs e.g. wages for productivity from ONS, literature etc
Nominal value vs real value?
Nominal value is any economic statistic is measured in terms of actual prices at that time, whereas the real value is the same statistic after its been adjusted for inflation.
