An improved set of standards for finding cost for cost-effectiveness analysis

Area of Science:

• Health Economics
• Pharmacoeconomics
• Intervention Costing

Background:

• Established guidelines promote standardized cost-effectiveness analysis (CEA) for comparing interventions.
• Societal perspective and long-term horizons are agreed upon for valuing services.
• Current guidelines lack specificity regarding precise costing methodologies.

Purpose of the Study:

• To review literature and identify challenges with four primary cost determination methods in CEA.
• To inform analysts on appropriate costing strategies for accurate economic evaluations.

Main Methods:

• Literature review focusing on problems associated with four principal cost determination methods.
• Analysis of microcosting, activity-based costing, administrative cost estimates, and gross costing.

Main Results:

• Microcosting necessitates direct measurement, including overhead and development costs.
• Activity-based costing offers accurate service costs but lacks widespread adoption; quality and generalizability are key.
• Administrative and gross costing methods require careful consideration of excluded items and service homogeneity, respectively.

Conclusions:

• Future research should focus on evaluating the quality of various costing methods.
• Analysts must avoid assumptions that exclude intervention-specific costs, ensuring unbiased economic evaluations.