Measuring and Estimating Costs

Flashcards based on the lecture notes about cost measurements and estimations in pharmacoeconomic analysis.

What is the common analysis across all forms of economic evaluations?

Analysis of the comparative costs of alternative treatments.

In economic theory, what is considered the 'true' cost of a resource?

Opportunity cost – the value of the next best forgone alternative.

What is the common analysis across all forms of economic evaluations?

Analysis of the comparative costs of alternative treatments.

In economic theory, what is considered the 'true' cost of a resource?

Opportunity cost – the value of the next best forgone alternative.

What are the four types of costs that pharmacoeconomics textbooks attempted to categorize in the 1990s?

Direct Medical Costs, Direct Nonmedical Costs, Indirect Costs, Intangible Costs.

Give examples of direct medical costs

Costs associated with pharmaceuticals, diagnostic tests, and physician services.

Give examples of direct nonmedical costs?

Cost of traveling to/from physician office, childcare services, hotel stays for out-of-town care.

What do indirect costs primarily involve?

Costs resulting from the loss of productivity because of illness or death.

What do intangible costs include?

Costs of pain, suffering, anxiety, or fatigue due to illness or its treatment.

What are benefits that result from a reduction in pain and suffering related to a product or intervention called?

Intangible benefits.

According to Drummond et al., what are the categories for cost?

Healthcare Sector Costs, Patient and Family Cost, Productivity Costs, External Costs.

What do healthcare sector costs include?

Staff time, medical supplies, use of capital and overheads.

What do patient and family costs include?

Out-of-pocket expenses such as travel, caring activities undertaken by the family and any psychological stress experienced by patients, or their families, or both.

What are costs for productivity changes analogous to?

Indirect costs such as income lost because of absence from work.

What is another name for external costs?

Other Sector Costs.

What are the possible viewpoints for the analysis?

Viewpoints of society, government, patients, employers, healthcare providers.

What needs to be considered if the comparison is restricted to treatments immediately under study?

Costs common to both treatments need not be considered.

If retrospective data is used, what is needed?

Costs should be adjusted or valued at one point in time.

How can standardization of costs be done?

Using the Medical Consumer Price Index (CPI) inflation rates.

Define discounting

Means of standardizing costs for fair comparison, based on the assumption that costs incurred in the immediate future are of greater importance than costs incurred in the distant future.

What does a positive rate of time preference mean?

People prefer receiving money today than in the future.

What do modifications for time value use?

A discount rate.

What generally accepted range that includes discount rates?

Between 3% and 6%.

What does r represent in the discount factor formula?

Discount rate.

What are the ways that cost information is collected?

Prospectively during clinical trials and retrospectively from medical records or reimbursement claims data.

What does AWP stand for, and what is it?

Average Wholesaler Price, the cost assigned to the product by the manufacturer.

List four methods for estimating hospital costs.

Per diem, Disease-specific Per diem, Diagnosis-related group, Micro-costing.