, Volume 31, Issue 7, pp 537–549 | Cite as

Productivity Costs in Economic Evaluations: Past, Present, Future

  • Marieke KrolEmail author
  • Werner Brouwer
  • Frans Rutten
Practical Application


Productivity costs occur when the productivity of individuals is affected by illness, treatment, disability or premature death. The objective of this paper was to review past and current developments related to the inclusion, identification, measurement and valuation of productivity costs in economic evaluations. The main debates in the theory and practice of economic evaluations of health technologies described in this review have centred on the questions of whether and how to include productivity costs, especially productivity costs related to paid work. The past few decades have seen important progress in this area. There are important sources of productivity costs other than absenteeism (e.g. presenteeism and multiplier effects in co-workers), but their exact influence on costs remains unclear. Different measurement instruments have been developed over the years, but which instrument provides the most accurate estimates has not been established. Several valuation approaches have been proposed. While empirical research suggests that productivity costs are best included in the cost side of the cost-effectiveness ratio, the jury is still out regarding whether the human capital approach or the friction cost approach is the most appropriate valuation method to do so. Despite the progress and the substantial amount of scientific research, a consensus has not been reached on either the inclusion of productivity costs in economic evaluations or the methods used to produce productivity cost estimates. Such a lack of consensus has likely contributed to ignoring productivity costs in actual economic evaluations and is reflected in variations in national health economic guidelines. Further research is needed to lessen the controversy regarding the estimation of health-related productivity costs. More standardization would increase the comparability and credibility of economic evaluations taking a societal perspective.


Productivity Cost Economic Evaluation Societal Perspective Unpaid Work Human Capital Approach 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



This study was part of a larger project investigating the broader societal benefits of healthcare, which was financially supported by AstraZeneca, GlaxoSmithKline, Janssen-Cilag Merck and Pfizer BV. The views expressed in this paper are those of the authors.

Author contributions

WB and FR had the idea for the review. MK was primarily responsible for reviewing the literature and writing the manuscript, in cooperation with WB and FR. All authors read, edited and approved the final manuscript. WB is the overall guarantor for the content of this article.

Conflicts of interest

The authors have no further conflicts of interest to declare.


  1. 1.
    Claxton K, Paulden M, Gravelle H, Brouwer W, Culyer AJ. Discounting and decision making in the economic evaluation of health-care technologies. Health Econ. 2011;20(1):2–15.PubMedCrossRefGoogle Scholar
  2. 2.
    Claxton K, Walker S, Palmer S, Sculpher M. Appropriate perspectives for health care decisions (CHE research paper no. 54). New York: Centre for Health Economics; 2010.Google Scholar
  3. 3.
    Jonsson B. Ten arguments for a societal perspective in the economic evaluation of medical innovations. Eur J Health Econ. 2009;10(4):357–9.PubMedCrossRefGoogle Scholar
  4. 4.
    Johannesson M, Jönsson B, Jönsson L, Kobelt G, Zethraeus N. Why should economic evaluations of medical innovations have a societal perspective? OHE briefing. 2009;51:1–32.Google Scholar
  5. 5.
    Hirth RA, Chernew ME, Miller E, Fendrick AM, Weissert WG. Willingness to pay for a quality-adjusted life year: in search of a standard. Med Decis Making. 2000;20(3):332–42.Google Scholar
  6. 6.
    Shiroiwa T, Sung YK, Fukuda T, Lang HC, Bae SC, Tsutani K. International survey on willingness-to-pay (WTP) for one additional QALY gained: what is the threshold of cost effectiveness? Health Econ. 2010;19(4):422–37.Google Scholar
  7. 7.
    Bobinac A, van Exel NJ, Rutten FF, Brouwer WB. GET MORE, PAY MORE? An elaborate test of construct validity of willingness to pay per QALY estimates obtained through contingent valuation. J Health Econ. 2012;31(1):158–68.PubMedCrossRefGoogle Scholar
  8. 8.
    Brouwer WB, Koopmanschap MA, Rutten FF. Productivity costs in cost-effectiveness analysis: numerator or denominator—a further discussion. Health Econ. 1997;6(5):511–4.Google Scholar
  9. 9.
    Zhang W, Bansback N, Anis AH. Measuring and valuing productivity loss due to poor health: a critical review. Soc Sci Med. 2011;72(2):185–92.PubMedCrossRefGoogle Scholar
  10. 10.
    Williams A. Cost-effectiveness analysis: is it ethical? J Med Ethics. 1992;18(1):7–11.PubMedCrossRefGoogle Scholar
  11. 11.
    Olsen J, Richardson J. Production gains from health care: what should be included in cost-effectiveness analysis. Soc Sci Med. 1999;49:17–26.PubMedCrossRefGoogle Scholar
  12. 12.
    Johannesson M. A note on the depreciation of the societal perspective in economic evaluation of health care. Health Policy. 1995;33(1):59–66.PubMedCrossRefGoogle Scholar
  13. 13.
    Drummond MF, Sculpher MJ, Torrance GW, O’Brien BJ, Stoddart GL. Methods for the economic evaluation of health care programmes. 3rd ed. Oxford: Oxford University Press; 2005.Google Scholar
  14. 14.
    Gold M, Siegel J, Russell L, Weinstein M. Cost-effectiveness in health and medicine. New York: Oxford University Press; 1996.Google Scholar
  15. 15.
    Brouwer WBF, Exel JA, Baltussen RMPM, Rutten FFH. A dollar is a dollar-or is it? Value Health. 2006;9(5):341–7.PubMedCrossRefGoogle Scholar
  16. 16.
    Lindholm L, Lofroth E, Rosen M. Does productivity influence priority setting? A case study from the field of CVD prevention. Cost Eff Resour Alloc. 2008;17(6):6.CrossRefGoogle Scholar
  17. 17.
    Pritchard C, Sculpher M. Productivity costs: principles and practice in economic evaluation. London: Office of Health Economics; 2000.Google Scholar
  18. 18.
    Koopmanschap MA, Rutten FF. The impact of indirect costs on outcomes of health care programs. Health Econ. 1994;3(6):385–93.Google Scholar
  19. 19.
    Krol M, Papenburg J, Koopmanschap M, Brouwer W. Do productivity costs matter? The impact of including productivity costs on the incremental costs of interventions targeted at depressive disorders. Pharmacoeconomics. 2011;29(7):601–19.PubMedGoogle Scholar
  20. 20.
    Krol M, Papenburg J, Tan S, Brouwer W, Hakkaart L. A noticeable difference? Productivity costs related to paid and unpaid work in economic evaluations on expensive drugs. Accessed 22 Dec 2012.
  21. 21.
    Brooks A, Hagen SE, Sathyanarayanan S, Schultz AB, Edington DW. Presenteeism: critical issues. J Occup Environ Med. 2010;52(11):1055–67.PubMedCrossRefGoogle Scholar
  22. 22.
    Koopmanschap MA, Rutten FF, van Ineveld BM, van Roijen L. The friction cost method for measuring indirect costs of disease. J Health Econ. 1995;14(2):171–89.PubMedCrossRefGoogle Scholar
  23. 23.
    Brouwer WB, Koopmanschap MA, Rutten FF. Productivity losses without absence: measurement validation and empirical evidence. Health Policy. 1999;48(1):13–27.PubMedCrossRefGoogle Scholar
  24. 24.
    Posnett J, Jan S. Indirect cost in economic evaluation: the opportunity cost of unpaid inputs. Health Econ. 1996;5(1):13–23.Google Scholar
  25. 25.
    Brouwer WB, van Exel NJ, Koopmanschap MA, Rutten FF. Productivity costs before and after absence from work: as important as common? Health Policy. 2002;61(2):173–187.Google Scholar
  26. 26.
    Pauly MV, Nicholson S, Xu J, Polsky D, Danzon PM, Murray JF, et al. A general model of the impact of absenteeism on employers and employees. Health Econ. 2002;11(3):221–31.PubMedCrossRefGoogle Scholar
  27. 27.
    Nicholson S, Pauly MV, Polsky D, Sharda C, Szrek H, Berger ML. Measuring the effects of work loss on productivity with team production. Health Econ. 2006;15(2):111–23.PubMedCrossRefGoogle Scholar
  28. 28.
    Pauly MV, Nicholson S, Polsky D, Berger ML, Sharda C. Valuing reductions in on-the-job illness: ‘presenteeism’ from managerial and economic perspectives. Health Econ. 2008;17(4):469–85.PubMedCrossRefGoogle Scholar
  29. 29.
    Severens JL, Laheij RJ, Jansen JB, Van der Lisdonk EH, Verbeek AL. Estimating the cost of lost productivity in dyspepsia. Aliment Pharmacol Ther. 1998;12(9):919–23.PubMedCrossRefGoogle Scholar
  30. 30.
    Koopmanschap M, Burdorf A, Jacob K, Meerding WJ, Brouwer W, Severens H. Measuring productivity changes in economic evaluation: setting the research agenda. Pharmacoeconomics. 2005;23(1):47–54.PubMedCrossRefGoogle Scholar
  31. 31.
    Prasad M, Wahlqvist P, Shikiar R, Shih YC. A review of self-report instruments measuring health-related work productivity: a patient-reported outcomes perspective. Pharmacoeconomics. 2004;22(4):225–44.PubMedCrossRefGoogle Scholar
  32. 32.
    Mattke S, Balakrishnan A, Bergamo G, Newberry SJ. A review of methods to measure health-related productivity loss. Am J Manag Care. 2007;13(4):211–7.PubMedGoogle Scholar
  33. 33.
    Lofland JH, Pizzi L, Frick KD. A review of health-related workplace productivity loss instruments. Pharmacoeconomics. 2004;22(3):165–84.PubMedCrossRefGoogle Scholar
  34. 34.
    Brouwer WB, Meerding WJ, Lamers LM, Severens JL. The relationship between productivity and health-related QOL: an exploration. Pharmacoeconomics. 2005;23(3):209–18.PubMedCrossRefGoogle Scholar
  35. 35.
    Lamers LM, Meerding WJ, Severens JL, Brouwer WB. The relationship between productivity and health-related quality of life: an empirical exploration in persons with low back pain. Qual Life Res. 2005;14(3):805–13.PubMedCrossRefGoogle Scholar
  36. 36.
    Krol M, Stolk E, Brouwer W. Productivity costs predictions based on EQ-5D: an explorative study. Accessed 22 Dec 2012.
  37. 37.
    Nyman J. Productivity costs revisited: toward a new US policy. Health Econ. 2012;21(12):1387–401.CrossRefGoogle Scholar
  38. 38.
    Koopmanschap MA, Rutten FF. Indirect costs in economic studies: confronting the confusion. Pharmacoeconomics. 1993;4(6):446–54.PubMedCrossRefGoogle Scholar
  39. 39.
    Weinstein MC, Siegel JE, Garber AM, Lipscomb J, Luce BR, Manning WG Jr, et al. Productivity costs, time costs and health-related quality of life: a response to the Erasmus Group. Health Econ. 1997;6(5):505–10.Google Scholar
  40. 40.
    Brouwer WB, Koopmanschap MA, Rutten FF. Productivity costs measurement through quality of life? A response to the recommendation of the Washington Panel. Health Econ. 1997;6(3):253–9.Google Scholar
  41. 41.
    Tranmer JE, Guerriere DN, Ungar WJ, Coyte PC. Valuing patient and caregiver time: a review of the literature. Pharmacoeconomics. 2005;23(5):449–59.PubMedCrossRefGoogle Scholar
  42. 42.
    Koopmanschap MA, Rutten FFH, van Ineveld BM, van Roijen L. Reply to Johanneson’s and Karlsson’s comment. J Health Econ. 1997;16:257–9.CrossRefGoogle Scholar
  43. 43.
    Johannesson M, Karlsson G. The friction cost method: a comment. J Health Econ. 1997;16(2):249–55 (discussion 257–9).Google Scholar
  44. 44.
    Brouwer WB, Koopmanschap MA. The friction-cost method: replacement for nothing and leisure for free? Pharmacoeconomics. 2005;23(2):105–11.PubMedCrossRefGoogle Scholar
  45. 45.
    Meltzer D, Weckerle C, Chang L. Do people consider financial effects in answering quality of life questions? Med Decis Making. 1999;19:517.CrossRefGoogle Scholar
  46. 46.
    Myers J, McCabe S, Gohmann S. Quality-of-life assessment when there is a loss of income. Med Decis Making. 2007;27(1):27–33.Google Scholar
  47. 47.
    Richardson J, Peacock SJ, Iezzi A. Do quality-adjusted life years take account of lost income? Evidence from an Australian survey. Eur J Health Econ. 2009;10(1):103–9.PubMedCrossRefGoogle Scholar
  48. 48.
    Davidson T, Levin LA. Do individuals consider expected income when valuing health states? Int J Technol Assess Health Care. 2008;24(4):488–94.PubMedCrossRefGoogle Scholar
  49. 49.
    Sendi P, Brouwer WB. Is silence golden? A test of the incorporation of the effects of ill-health on income and leisure in health state valuations. Health Econ. 2005;14(6):643–7.PubMedCrossRefGoogle Scholar
  50. 50.
    Krol M, Brouwer W, Sendi P. Productivity costs in health-state valuations: does explicit instruction matter? Pharmacoeconomics. 2006;24(4):401–14.PubMedCrossRefGoogle Scholar
  51. 51.
    Krol M, Sendi P, Brouwer W. Breaking the silence: exploring the potential effects of explicit instructions on incorporating income and leisure in TTO exercises. Value Health. 2009;12(1):172–80.PubMedCrossRefGoogle Scholar
  52. 52.
    Brouwer WB, Grootenboer S, Sendi P. The incorporation of income and leisure in health state valuations when the measure is silent: an empirical inquiry into the sound of silence. Med Decis Making. 2009;29(4):503–12.Google Scholar
  53. 53.
    Brouwer WB, Rutten FF. The missing link: on the line between C and E. Health Econ. 2003;12(8):629–36.PubMedCrossRefGoogle Scholar
  54. 54.
    Culyer AJ, Bombard Y. An equity framework for health technology assessments. Making: Med Decis.; 2011.Google Scholar
  55. 55.
    Brouwer WB, Rutten FF. Health economics: a bridge over troubled water. Eur J Public Health. 2001;11(2):234–6.PubMedCrossRefGoogle Scholar
  56. 56.
    Belgian Health Care Knowledge Centre. Guidelines for pharmacoeconomic evaluations in Belgium (KCE reports 78C). Brussels: KCE; 2008.Google Scholar
  57. 57.
    National Institute for Health and Clinical Excellence. Guide to the methods of technology appraisal. London: NICE; 2008.Google Scholar
  58. 58.
    Edling A, Stenberg A. General guidelines for economic evaluations from the Pharmaceutical Benefits Board. Stockholm: Pharmaceutical Benefits Board; 2003.Google Scholar
  59. 59.
    College voor zorgverzekeringen. Guidelines for pharmacoeconomic research, updated version. Diemen: CVZ; 2006.Google Scholar
  60. 60.
    Capri S, Ceci A, Terranova L, Merlo F, Mantovani L. Guidelines for economic evaluations in Italy: recommendations from the Italian group of pharmacoeconomic studies. Drug Inf J. 2001;35:189–201.Google Scholar
  61. 61.
    Norwegian Medicines Agency. Norwegian guidelines for pharmacoeconomic analysis in connection with applications for reimbursement. Oslo: Norwegian Medicines Agency; 2002.Google Scholar
  62. 62.
    Jacob-Tacken KH, Koopmanschap MA, Meerding WJ, Severens JL. Correcting for compensating mechanisms related to productivity costs in economic evaluations of health care programmes. Health Econ. 2005;14(5):435–43.PubMedCrossRefGoogle Scholar
  63. 63.
    Krol M, Brouwer W, Severens JL, Kaper J, Evers S. Productivity cost calculations: correcting for compensation mechanisms and multiplier effects? Soc Sci Med. 2012;75(11):1981–8.PubMedCrossRefGoogle Scholar
  64. 64.
    Swiebel J. Unpaid work and policy-making: towards a broader perspective of work and employment. Discussion paper of the United Nations Department of Economic and Social Affairs; 1999. DESA Discussion Paper No. 4. Accessed 8 Apr 2013.
  65. 65.
    Meerding WJ, IJzelenberg W, Koopmanschap MA, Severens JL, Burdorf A. Health problems lead to considerable productivity loss at work among workers with high physical load jobs. J Clin Epidemiol. 2005;58(5):517–23.PubMedCrossRefGoogle Scholar
  66. 66.
    Zhang W, Gignac MA, Beaton D, Tang K, Anis AH, Canadian Arthritis Network Work Productivity Group. Productivity loss due to presenteeism among patients with arthritis: estimates from 4 instruments. J Rheumatol. 2010;37(9):1805–14.PubMedCrossRefGoogle Scholar
  67. 67.
    van Roijen L, Essink-Bot ML, Koopmanschap MA, Bonsel G, Rutten FF. Labor and health status in economic evaluation of health care. The Health and Labor Questionnaire. Int J Technol Assess Health Care. 1996;12(3):405–15.Google Scholar
  68. 68.
    Zhang W, Bansback N, Boonen A, Severens JL, Anis AH. Development of a composite questionnaire, the valuation of lost productivity, to value productivity losses: application in rheumatoid arthritis. Value Health. 2012;15(1):46–54.PubMedCrossRefGoogle Scholar
  69. 69.
    Reid M. Economics of household production. New York: Wiley; 1934.Google Scholar
  70. 70.
    Stone PW, Chapman RH, Sandberg EA, Liljas B, Neumann PJ. Measuring costs in cost-utility analyses. Variations in the literature. Int J Technol Assess Health Care. 2000;16(1):111–24.PubMedCrossRefGoogle Scholar
  71. 71.
    Gerard K. Cost-utility in practice: a policy maker’s guide to the state of the art. Health Policy. 1992;21(3):249–79.PubMedCrossRefGoogle Scholar
  72. 72.
    Weisbrod BA. The valuation of human capital. J Polit Econ. 1961;69(5):425–36.CrossRefGoogle Scholar
  73. 73.
    Koopmanschap MA, van Ineveld BM. Towards a new approach for estimating indirect costs of disease. Soc Sci Med. 1992;34(9):1005–10.PubMedCrossRefGoogle Scholar
  74. 74.
    Koopmanschap MA, Rutten FF, van Ineveld BM, van Roijen L. The friction cost method for measuring indirect costs of disease. J Health Econ. 1995;14(2):171–89.PubMedCrossRefGoogle Scholar
  75. 75.
    Gerard K, Donaldson C, Maynard AK. The cost of diabetes. Diabet Med. 1989;6(2):164–70.PubMedCrossRefGoogle Scholar
  76. 76.
    Johannesson M. Avoiding double-counting in pharmacoeconomic studies. Pharmacoeconomics. 1997;11(5):385–8.PubMedCrossRefGoogle Scholar
  77. 77.
    Meltzer D, Johannesson M. Inconsistencies in the “societal perspective” on costs of the Panel on Cost-Effectiveness in Health and Medicine. Med Decis Making. 1999;19(4):371–7.Google Scholar
  78. 78.
    Tilling C, Krol M, Tsuchiya A, Brazier J, Brouwer W. In or out? Income losses in health state valuations: a review. Value Health. 2010;13(2):298–305.Google Scholar
  79. 79.
    Waldman JD, Kelly F, Arora S, Smith HL. The shocking cost of turnover in health care. Health Care Manage Rev. 2004;29(1):2–7.Google Scholar
  80. 80.
    Koopmanschap MA, van Exel JN, van den Berg B, Brouwer WB. An overview of methods and applications to value informal care in economic evaluations of healthcare. Pharmacoeconomics. 2008;26(4):269–80.PubMedCrossRefGoogle Scholar
  81. 81.
    van Exel J, Bobinac A, Koopmanschap M, Brouwer W. The invisible hands made visible: recognizing the value of informal care in healthcare decision-making. Expert Rev Pharmacoecon Outcomes Res. 2008;8(6):557–61.PubMedCrossRefGoogle Scholar
  82. 82.
    van den Berg B, Brouwer W, van Exel J, Koopmanschap M, van den Bos GA, Rutten F. Economic valuation of informal care: lessons from the application of the opportunity costs and proxy good methods. Soc Sci Med. 2006;62(4):835–45.PubMedCrossRefGoogle Scholar
  83. 83.
    van den Berg B, Al M, Brouwer W, van Exel J, Koopmanschap M. Economic valuation of informal care: the conjoint measurement method applied to informal caregiving. Soc Sci Med. 2005;61(6):1342–55.PubMedCrossRefGoogle Scholar
  84. 84.
    van den Berg B, Brouwer WB, Koopmanschap MA. Economic valuation of informal care. An overview of methods and applications. Eur J Health Econ. 2004;5(1):36–45.PubMedCrossRefGoogle Scholar
  85. 85.
    Brouwer WB, van Exel NJ, Koopmanschap MA, Rutten FF. The valuation of informal care in economic appraisal. A consideration of individual choice and societal costs of time. Int J Technol Assess Health Care. 1999;15(1):147–60.Google Scholar
  86. 86.
    Grocott R, Metcalfe S, Schoeler R, Priest V, Hall C, Brougham M, et al. Prescription for pharmacoeconomic analysis: methods for cost-utility analysis. Wellington: PHARMAC Pharmaceutical Management Agency; 2007.Google Scholar

Copyright information

© Springer International Publishing Switzerland 2013

Authors and Affiliations

  1. 1.Department of Health Policy and ManagementErasmus UniversityRotterdamThe Netherlands
  2. 2.Institute for Medical Technology AssessmentErasmus UniversityRotterdamThe Netherlands

Personalised recommendations