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How to Estimate Productivity Costs in Economic Evaluations

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  • Marieke Krol
  • Werner Brouwer

Abstract

Productivity costs are frequently omitted from economic evaluations, despite their often strong impact on cost-effectiveness outcomes. This neglect may be partly explained by the lack of standardization regarding the methodology of estimating productivity costs. This paper aims to contribute to standardization of productivity cost methodology by offering practical guidance on how to estimate productivity costs in economic evaluations. The paper discusses the identification, measurement and valuation of productivity losses. It is recommended to include not only productivity losses related to absenteeism from and reduced productivity at paid work, but also those related to unpaid work. Hence, it is recommended to use a measurement instrument including questions about both paid and unpaid productivity, such as the iMTA Productivity Cost Questionnaire (iPCQ) or the Valuation of Lost Productivity (VOLP). We indicate how to apply the friction cost and the human capital approach and give practical guidance on deriving final cost estimates. Copyright Springer International Publishing Switzerland 2014

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  • Marieke Krol & Werner Brouwer, 2014. "How to Estimate Productivity Costs in Economic Evaluations," PharmacoEconomics, Springer, vol. 32(4), pages 335-344, April.
    • Handle: RePEc:spr:pharme:v:32:y:2014:i:4:p:335-344
    DOI: 10.1007/s40273-014-0132-3
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    2. Marieke Krol & Jocé Papenburg & Marc Koopmanschap & Werner Brouwer, 2011. "Do Productivity Costs Matter?," PharmacoEconomics, Springer, vol. 29(7), pages 601-619, July.
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    5. Marieke Krol & Elly Stolk & Werner Brouwer, 2014. "Predicting productivity based on EQ-5D: an explorative study," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(5), pages 465-475, June.
    6. Carl Tilling & Marieke Kro & Aki Tsuchiya & John Brazier & Job Exel & Werner Brouwer, 2012. "Does the EQ-5D Reflect Lost Earnings?," PharmacoEconomics, Springer, vol. 30(1), pages 47-61, January.
    7. Renske Hoefman & Job Exel & Werner Brouwer, 2013. "How to Include Informal Care in Economic Evaluations," PharmacoEconomics, Springer, vol. 31(12), pages 1105-1119, December.
    8. Drummond, Michael F. & Sculpher, Mark J. & Torrance, George W. & O'Brien, Bernie J. & Stoddart, Greg L., 2005. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 3, number 9780198529453.
    9. Johannesson, Magnus & Karlsson, Goran, 1997. "The friction cost method: A comment," Journal of Health Economics, Elsevier, vol. 16(2), pages 249-255, April.
    10. Koopmanschap, Marc A. & Rutten, Frans F. H. & van Ineveld, B. Martin & van Roijen, Leona, 1995. "The friction cost method for measuring indirect costs of disease," Journal of Health Economics, Elsevier, vol. 14(2), pages 171-189, June.
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    Cited by:

    1. Hansen, Kristian S. & Moreno-Ternero, Juan D. & Østerdal, Lars P., 2023. "Productivity and quality-adjusted life years: QALYs, PALYs and beyond," Working Papers 11-2023, Copenhagen Business School, Department of Economics.
    2. Alfredo Palacios & Andrea Alcaraz & Agustín Casarini & Federico Rodriguez Cairoli & Natalia Espinola & Dario Balan & Lucas Perelli & Federico Augustovski & Ariel Bardach & Andrés Pichon‐Riviere, 2023. "The health, economic and social burden of smoking in Argentina, and the impact of increasing tobacco taxes in a context of illicit trade," Health Economics, John Wiley & Sons, Ltd., vol. 32(11), pages 2655-2672, November.
    3. Paul Hanly & Rebecca Maguire & Frances Drummond & Linda Sharp, 2019. "Variation in the methodological approach to productivity cost valuation: the case of prostate cancer," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(9), pages 1399-1408, December.
    4. Ina Rissanen & Leena Ala-Mursula & Iiro Nerg & Marko Korhonen, 2021. "Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(4), pages 531-545, June.
    5. Hongying Hao & Stephen Nicholas & Lizheng Xu & Anli Leng & Jingjie Sun & Zhiyan Han, 2022. "Productivity Losses Due to Diabetes in Urban Rural China," IJERPH, MDPI, vol. 19(10), pages 1-11, May.
    6. Jonas Steel & Lode Godderis & Jeroen Luyten, 2018. "Methodological Challenges in the Economic Evaluation of Occupational Health and Safety Programmes," IJERPH, MDPI, vol. 15(11), pages 1-12, November.
    7. Sevilla, J.P. & Stawasz, Andrew & Burnes, Daria & Poulsen, Peter Bo & Sato, Reiko & Bloom, David E., 2019. "Indirect costs of adult pneumococcal disease and productivity-based rate of return to PCV13 vaccination for older adults and elderly diabetics in Denmark," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    8. Andronis, Lazaros & Maredza, Mandy & Petrou, Stavros, 2019. "Measuring, valuing and including forgone childhood education and leisure time costs in economic evaluation: Methods, challenges and the way forward," Social Science & Medicine, Elsevier, vol. 237(C), pages 1-1.
    9. Ilias Goranitis & Leana Bellanca & Amanda J Daley & Adele Thomas & Helen Stokes-Lampard & Andrea K Roalfe & Sue Jowett, 2017. "Aerobic exercise for vasomotor menopausal symptoms: A cost-utility analysis based on the Active Women trial," PLOS ONE, Public Library of Science, vol. 12(9), pages 1-15, September.
    10. Przemysław Holko & Paweł Kawalec & Małgorzata Mossakowska & Andrzej Pilc, 2016. "Health-Related Quality of Life Impairment and Indirect Cost of Crohn’s Disease: A Self-Report Study in Poland," PLOS ONE, Public Library of Science, vol. 11(12), pages 1-21, December.
    11. Rodrigo Luiz Carregaro & Caroline Ribeiro Tottoli & Daniela da Silva Rodrigues & Judith E Bosmans & Everton Nunes da Silva & Maurits van Tulder, 2020. "Low back pain should be considered a health and research priority in Brazil: Lost productivity and healthcare costs between 2012 to 2016," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-15, April.
    12. Kathleen Manipis & Stephen Goodall & Paul Hanly & Rosalie Viney & Alison Pearce, 2021. "Employer survey to estimate the productivity friction period," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(2), pages 255-266, March.
    13. Kenneth Tang, 2015. "Estimating Productivity Costs in Health Economic Evaluations: A Review of Instruments and Psychometric Evidence," PharmacoEconomics, Springer, vol. 33(1), pages 31-48, January.
    14. Kathleen Manipis & Brendan Mulhern & Philip Haywood & Rosalie Viney & Stephen Goodall, 2023. "Estimating the willingness-to-pay to avoid the consequences of foodborne illnesses: a discrete choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(5), pages 831-852, July.
    15. Toly Chen & Chungwei Ou & Yu-Cheng Lin, 2019. "A fuzzy polynomial fitting and mathematical programming approach for enhancing the accuracy and precision of productivity forecasting," Computational and Mathematical Organization Theory, Springer, vol. 25(2), pages 85-107, June.
    16. Mennini, Francesco Saverio & Gitto, Lara, 2022. "Approaches to Estimating Indirect Costs in Healthcare: Motivations for Choice," MPRA Paper 112129, University Library of Munich, Germany.
    17. Paul Hanly & Corina Sheerin, 2017. "Valuing Informal Care in Ireland: Beyond the Traditional Production Boundary," The Economic and Social Review, Economic and Social Studies, vol. 48(3), pages 337-364.
    18. Hanly, Paul & Ortega Ortega, Marta & Pearce, Alison & Soerjomataram, Isabelle & Sharp, Linda, 2020. "Advances in the methodological approach to friction period estimation: A European perspective," Social Science & Medicine, Elsevier, vol. 264(C).
    19. Hansen, Kristian S. & Moreno-Ternero, Juan D. & Østerdal, Lars P., 2023. "Productivity and quality-adjusted life years: QALYs, PALYs and beyond," Working Papers 11-2023, Copenhagen Business School, Department of Economics.
    20. Diego Proaño Falconi & Eduardo Bernabé, 2018. "Determinants of catastrophic healthcare expenditure in Peru," International Journal of Health Economics and Management, Springer, vol. 18(4), pages 425-436, December.

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