Identifying and controlling for program-level differences in comparative cost analysis: lessons from the economic...

Performing economic evaluations of established health care programs is essential to identify and control for underlying program-level variations and to make valid comparisons. At a time when the need for such evaluations is growing, health care professionals have limited information on the methodological challenges of performing these evaluations. In this study, we used the National Breast and Cervical Cancer Early Detection Program to illustrate these potential underlying variations. We performed site visits to four grantees and collected activity-based cost data from nine additional representative programs. We identified five specific types of cost factors that should be considered when evaluating and comparing health care programs: clinical services, service mix, in-kind contributions, indirect costs, and year-to-year expenditures of specific activities. A key lesson is that case studies and pilot testing should be performed before initiating cost analysis to identify underlying variation and to test appropriate methods to adequately control for these differences.