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Using Top‐down and Bottom‐up Costing Approaches in LMICs: The Case for Using Both to Assess the Incremental Costs of New Technologies at Scale

Author

Listed:
  • Lucy Cunnama
  • Edina Sinanovic
  • Lebogang Ramma
  • Nicola Foster
  • Leigh Berrie
  • Wendy Stevens
  • Sebaka Molapo
  • Puleng Marokane
  • Kerrigan McCarthy
  • Gavin Churchyard
  • Anna Vassall

Abstract

Purpose Estimating the incremental costs of scaling‐up novel technologies in low‐income and middle‐income countries is a methodologically challenging and substantial empirical undertaking, in the absence of routine cost data collection. We demonstrate a best practice pragmatic approach to estimate the incremental costs of new technologies in low‐income and middle‐income countries, using the example of costing the scale‐up of Xpert Mycobacterium tuberculosis (MTB)/resistance to riframpicin (RIF) in South Africa. Materials and methods We estimate costs, by applying two distinct approaches of bottom‐up and top‐down costing, together with an assessment of processes and capacity. Results The unit costs measured using the different methods of bottom‐up and top‐down costing, respectively, are $US16.9 and $US33.5 for Xpert MTB/RIF, and $US6.3 and $US8.5 for microscopy. The incremental cost of Xpert MTB/RIF is estimated to be between $US14.7 and $US17.7. While the average cost of Xpert MTB/RIF was higher than previous studies using standard methods, the incremental cost of Xpert MTB/RIF was found to be lower. Conclusion Costs estimates are highly dependent on the method used, so an approach, which clearly identifies resource‐use data collected from a bottom‐up or top‐down perspective, together with capacity measurement, is recommended as a pragmatic approach to capture true incremental cost where routine cost data are scarce.

Suggested Citation

  • Lucy Cunnama & Edina Sinanovic & Lebogang Ramma & Nicola Foster & Leigh Berrie & Wendy Stevens & Sebaka Molapo & Puleng Marokane & Kerrigan McCarthy & Gavin Churchyard & Anna Vassall, 2016. "Using Top‐down and Bottom‐up Costing Approaches in LMICs: The Case for Using Both to Assess the Incremental Costs of New Technologies at Scale," Health Economics, John Wiley & Sons, Ltd., vol. 25(S1), pages 53-66, February.
  • Handle: RePEc:wly:hlthec:v:25:y:2016:i:s1:p:53-66
    DOI: 10.1002/hec.3295
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    File URL: https://doi.org/10.1002/hec.3295
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    References listed on IDEAS

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    1. Michael K. Chapko & Chuan‐Fen Liu & Mark Perkins & Yu‐Fang Li & John C. Fortney & Matthew L. Maciejewski, 2009. "Equivalence of two healthcare costing methods: bottom‐up and top‐down," Health Economics, John Wiley & Sons, Ltd., vol. 18(10), pages 1188-1201, October.
    2. Sarah Wordsworth & Anne Ludbrook & Fergus Caskey & Alison Macleod, 2005. "Collecting unit cost data in multicentre studies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(1), pages 38-44, March.
    3. Grégoire Mercier & Gérald Naro, 2014. "Costing Hospital Surgery Services: The Method Matters," Post-Print hal-01829947, HAL.
    4. Gregoire Mercier & Gerald Naro, 2014. "Costing Hospital Surgery Services: The Method Matters," PLOS ONE, Public Library of Science, vol. 9(5), pages 1-7, May.
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    Cited by:

    1. Catherine Pitt & Catherine Goodman & Kara Hanson, 2016. "Economic Evaluation in Global Perspective: A Bibliometric Analysis of the Recent Literature," Health Economics, John Wiley & Sons, Ltd., vol. 25(S1), pages 9-28, February.
    2. Catherine Pitt & Anna Vassall & Yot Teerawattananon & Ulla K. Griffiths & Lorna Guinness & Damian Walker & Nicola Foster & Kara Hanson, 2016. "Foreword: Health Economic Evaluations in Low‐ and Middle‐income Countries: Methodological Issues and Challenges for Priority Setting," Health Economics, John Wiley & Sons, Ltd., vol. 25(S1), pages 1-5, February.

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