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Estimates of patient costs related with population morbidity: Can indirect costs affect the results?

Author

Listed:
  • M. Carreras
  • Manuel García-Goñi
  • Pere Ibern
  • J. Coderch
  • L. Vall-Llosera
  • José María Inoriza

Abstract

A number of health economics works require patient cost estimates as a basic information input. However the accuracy of cost estimates remains in general unspecified. We propose to investigate how the allocation of indirect costs or overheads can affect the estimation of patient costs in order to allow for improvements in the analysis of patient costs estimates. Instead of focusing on the costing method, this paper proposes to highlight changes in variance explained observed when a methodology is chosen. We compare three overhead allocation methods for a specific Spanish population adjusted using the Clinical Risk Groups (CRG), and we obtain different series of full-cost group estimates. As a result, there are significant gains in the proportion of the variance explained, depending upon the methodology used. Furthermore, we find that the global amount of variation explained by risk adjustment models depends mainly on direct costs and is independent of the level of aggregation used in the classification system.

Suggested Citation

  • M. Carreras & Manuel García-Goñi & Pere Ibern & J. Coderch & L. Vall-Llosera & José María Inoriza, 2009. "Estimates of patient costs related with population morbidity: Can indirect costs affect the results?," Economics Working Papers 1138, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:1138
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    References listed on IDEAS

    as
    1. Zsolt Mogyorosy & Peter Smith, 2005. "The main methodological issues in costing health care services: A literature review," Working Papers 007cherp, Centre for Health Economics, University of York.
    2. Jan B. Oostenbrink & Maiwenn J. Al, 2005. "The analysis of incomplete cost data due to dropout," Health Economics, John Wiley & Sons, Ltd., vol. 14(8), pages 763-776.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Patient costs; Clinical Risk Groups; Variation explained; Overhead allocation;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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