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Measuring indirect costs: is there a problem?

Tracey H Sach1, David K Whynes

  • 1Trent Institute for Health Services Research, Medical School, Queen's Medical Centre, University of Nottingham, Nottingham, UK. tracey.sach@nottingham.ac.uk

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|February 27, 2004
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Summary

Calculating indirect costs for economic evaluations is complex. Different methods significantly impact policy conclusions for interventions like pediatric cochlear implantation (PCI), highlighting a practical problem in cost measurement.

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Area of Science:

  • Health Economics
  • Medical Technology Assessment

Background:

  • Societal economic evaluations typically include indirect costs.
  • Methods for calculating indirect costs lack consensus.
  • Previous studies noted variability but didn't prove practical policy impact.

Purpose of the Study:

  • To assess if varying indirect cost calculation methods affect policy conclusions for pediatric cochlear implantation (PCI).
  • To demonstrate the practical implications of methodological choices in economic evaluations.

Main Methods:

  • Estimated indirect costs of PCI using multiple methods based on questionnaire data.
  • Integrated varied indirect cost estimates into a cost-utility analysis of PCI.

Main Results:

  • Different methods for calculating indirect costs yielded significantly different outcomes in the cost-utility analysis.
  • Methodological variability in indirect cost measurement directly influenced the perceived cost-effectiveness of PCI.

Conclusions:

  • The measurement of indirect costs is a practical problem in economic evaluations.
  • Variability in indirect cost calculation methods can alter policy decisions regarding interventions like PCI.