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A practical guide for calculating indirect costs of disease
1Institute for Medical Technology Assessment, Erasmus University, Rotterdam, The Netherlands. koopmanschap@econ.bmg.eur.nl
Pharmacoeconomics
|October 4, 1996
Summary
This review provides a practical guide to estimating indirect costs of disease, comparing the human capital approach with the friction cost method for economic appraisals and cost-of-illness studies.
Area of Science:
- Health Economics
- Economic Evaluation
- Public Health
Background:
- Estimating indirect costs of disease is crucial for economic appraisals.
- Significant debate exists regarding the appropriate methodologies for quantifying these costs.
Purpose of the Study:
- To offer a practical guide for quantifying and valuing indirect costs of disease.
- To compare two primary methods: the human capital approach and the friction cost method.
Main Methods:
- Review of established and emerging methodologies for indirect cost estimation.
- Detailed description of estimation procedures and data requirements for both methods.
- Application in aggregated cost-of-illness studies and specific healthcare program appraisals.
Main Results:
- The human capital approach estimates lost production potential.
- The friction cost method aims for more realistic indirect cost estimates by considering labor market scarcity.
- Guidance is provided on practical steps and data needs for each method.
Conclusions:
- Accurate estimation of indirect disease costs is vital for informed economic decision-making in healthcare.
- The friction cost method offers a potentially more refined approach by incorporating labor market dynamics.
- This review equips researchers and policymakers with tools for robust economic evaluations.