Advertisement

PharmacoEconomics

, Volume 32, Issue 4, pp 335–344 | Cite as

How to Estimate Productivity Costs in Economic Evaluations

  • Marieke Krol
  • Werner Brouwer
Practical Application

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.

Keywords

Productivity Cost Economic Evaluation Recall Period 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.

Notes

Acknowledgements

We would like to thank Clazien Bouwmans, Leona Hakkaart-van Roijen and Marc Koopmanschap for their useful comments on earlier drafts of this paper. For reasons of transparency, we indicate that both MK and WB are proponents of the friction cost method and were both involved in the development of the iPCQ questionnaire. The authors have no other conflicts of interest to declare. MK was primarily responsible for writing the manuscript in close cooperation with WB. Both authors read, edited, and approved the final manuscript. MK is the overall guarantor for the content.

Supplementary material

40273_2014_132_MOESM1_ESM.docx (20 kb)
Supplementary material 1 (DOCX 19 kb)

References

  1. 1.
    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
  2. 2.
    Gold M, Siegel J, Russell L, Weinstein M. Cost-effectiveness in health and medicine. Oxford: Oxford University Press; 1996.Google Scholar
  3. 3.
    Brouwer WB, Koopmanschap MA, Rutten FF. Productivity costs in cost-effectiveness analysis: numerator or denominator: a further discussion. Health Econ. 1997;6:511–4.PubMedCrossRefGoogle Scholar
  4. 4.
    Tranmer JE, Guerriere DN, Ungar WJ, Coyte PC. Valuing patient and caregiver time: a review of the literature. Pharmacoeconomics. 2005;23:449–59.PubMedCrossRefGoogle Scholar
  5. 5.
    Koopmanschap MA, Rutten FF. The impact of indirect costs on outcomes of health care programs. Health Econ. 1994;3:385–93.PubMedCrossRefGoogle Scholar
  6. 6.
    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;16:111–24.PubMedCrossRefGoogle Scholar
  7. 7.
    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;29:601–19.PubMedGoogle Scholar
  8. 8.
    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. Submitted paper.Google Scholar
  9. 9.
    Pritchard C, Sculpher M. Productivity costs: principles and practice in economic evaluation. London:Office of Health Economics; 2000.Google Scholar
  10. 10.
    Williams A. Cost-effectiveness analysis: is it ethical? J Med Ethics. 1992;18:7–11.PubMedCentralPubMedCrossRefGoogle 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.
    Brouwer WB, Meerding WJ, Lamers LM, Severens JL. The relationship between productivity and health-related QOL: an exploration. Pharmacoeconomics. 2005;23:209–18.PubMedCrossRefGoogle Scholar
  13. 13.
    Burton WN, Chen CY, Conti DJ, Schultz AB, Pransky G, Edington DW. The association of health risks with on-the-job productivity. J Occup Environ Med. 2005;47:769–77.PubMedCrossRefGoogle Scholar
  14. 14.
    Krol M, Brouwer W, Rutten F. Productivity costs in economic evaluations: past, present, future. Pharmacoeconomics. 2013;31:537–49.PubMedCrossRefGoogle Scholar
  15. 15.
    Reid M. Economics of household production. New York: Wiley; 1934.Google Scholar
  16. 16.
    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;15:111–23.PubMedCrossRefGoogle Scholar
  17. 17.
    Severens JL, Laheij RJ, Jansen JB, Van der Lisdonk EH, Verbeek AL. Estimating the cost of lost productivity in dyspepsia. Aliment Pharmacol Ther. 1998;12:919–23.PubMedCrossRefGoogle Scholar
  18. 18.
    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;14:435–43.PubMedCrossRefGoogle Scholar
  19. 19.
    Krol M, Brouwer WB, Severens JL, Kaper J, Evers SM. Productivity cost calculations in health economic evaluations: Correcting for compensation mechanisms and multiplier effects. Soc Sci Med. 2012;75:1981–8.Google Scholar
  20. 20.
    Lofland JH, Pizzi L, Frick KD. A review of health-related workplace productivity loss instruments. Pharmacoeconomics. 2004;22:165–84.PubMedCrossRefGoogle Scholar
  21. 21.
    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;22:225–44.PubMedCrossRefGoogle Scholar
  22. 22.
    Mattke S, Balakrishnan A, Bergamo G, Newberry SJ. A review of methods to measure health-related productivity loss. Am J Manag Care. 2007;13:211–7.PubMedGoogle Scholar
  23. 23.
    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.Google Scholar
  24. 24.
    Zhang W, Bansback N, Kopec J, Anis AH. Measuring time input loss among patients with rheumatoid arthritis: validity and reliability of the Valuation of Lost Productivity questionnaire. J Occup Environ Med. 2011;53:530–6.PubMedCrossRefGoogle Scholar
  25. 25.
    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;15:46–54.PubMedCrossRefGoogle Scholar
  26. 26.
    Bouwmans CA, Hakkaart-van Roijen L, Koopmanschap MA, Krol M, Severens JL. Manual—iMTA Productivity Costs Questionnaire. 2013.Google Scholar
  27. 27.
    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;12:405–15.PubMedCrossRefGoogle Scholar
  28. 28.
    Koopmanschap MA. PRODISQ: a modular questionnaire on productivity and disease for economic evaluation studies. Expert Rev Pharmacoecon Outcomes Res. 2005;5:23–8.PubMedCrossRefGoogle Scholar
  29. 29.
    Language Policy Unit S. Common European framework of reference for languages: learning, teaching, assessment. Cambridge: Cambridge University Press; 2001.Google Scholar
  30. 30.
    Lerner D, Chang H, Rogers WH, Benson C, Schein J, Allaire S. A method for imputing the impact of health problems on at-work performance and productivity from available health data. J Occup Environ Med. 2009;51:515–24.PubMedCrossRefGoogle Scholar
  31. 31.
    Lerner D, Chang H, Rogers WH, Benson C, Chow W, Kim MS, et al. Imputing at-work productivity loss using results of a randomized controlled trial comparing tapentadol extended release and oxycodone controlled release for osteoarthritis pain. J Occup Environ Med. 2012;54:933–8.PubMedCrossRefGoogle Scholar
  32. 32.
    Cangelosi MJ, Bliss S, Chang H, Dubois RW, Lerner D, Neumann PJ, et al. Imputing productivity gains from clinical trials. J Occup Environ Med. 2012;54:826–33.PubMedCrossRefGoogle Scholar
  33. 33.
    Krol M, Stolk E, Brouwer W. Predicting productivity based on EQ-5D: an explorative study. Eur J Health Econ. 2013. [Epub ahead of print].Google Scholar
  34. 34.
    Severens JL, Mulder J, Laheij RJ, Verbeek AL. Precision and accuracy in measuring absence from work as a basis for calculating productivity costs in The Netherlands. Soc Sci Med. 2000;51:243–9.PubMedCrossRefGoogle Scholar
  35. 35.
    Reilly MC, Bracco A, Ricci JF, Santoro J, Stevens T. The validity and accuracy of the Work Productivity and Activity Impairment questionnaire—irritable bowel syndrome version (WPAI:IBS). Aliment Pharmacol Ther. 2004;15(20):459–67.CrossRefGoogle Scholar
  36. 36.
    Koopmanschap MA, van Ineveld BM. Towards a new approach for estimating indirect costs of disease. Soc Sci Med. 1992;34:1005–10.PubMedCrossRefGoogle Scholar
  37. 37.
    Koopmanschap MA, Rutten FF, van Ineveld BM, van Roijen L. The friction cost method for measuring indirect costs of disease. J Health Econ. 1995;14:171–89.PubMedCrossRefGoogle Scholar
  38. 38.
    Weinstein MC, Siegel JE, Garber AM, Lipscomb J, Luce BR, Manning WG Jr, Torrance GW. Productivity costs, time costs and health-related quality of life: a response to the Erasmus Group. Health Econ. 1997;6:505–10.PubMedCrossRefGoogle Scholar
  39. 39.
    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;6:253–9.PubMedCrossRefGoogle Scholar
  40. 40.
    Johannesson M, Karlsson G. The friction cost method: a comment. J Health Econ. 1997;16:249–55 (discussion 257–9).Google Scholar
  41. 41.
    Johannesson M. Avoiding double-counting in pharmacoeconomic studies. Pharmacoeconomics. 1997;11:385–8.PubMedCrossRefGoogle Scholar
  42. 42.
    Nyman J. Productivity costs revisited: toward a new US policy. Health Econ. 2012;21:1387–401.CrossRefGoogle Scholar
  43. 43.
    Weisbrod BA. The valuation of human capital. J Polit Econ. 1961;69:425–36.CrossRefGoogle Scholar
  44. 44.
    Koopmanschap MA, Rutten FF. Indirect costs in economic studies: confronting the confusion. Pharmacoeconomics. 1993;4:446–54.PubMedCrossRefGoogle Scholar
  45. 45.
    Erdogan-Ciftci E, Koopmanschap MA. Estimation of productivity costs using the friction cost method: new evidence using national data. Value Health. 2011;14(abstract):A235–6.Google Scholar
  46. 46.
    Meltzer D, Weckerle C, Chang L. Do people consider financial effects in answering quality of life questions? Med Decis Mak. 1999;19:517.CrossRefGoogle Scholar
  47. 47.
    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;14:643–7.PubMedCrossRefGoogle Scholar
  48. 48.
    Krol M, Brouwer W, Sendi P. Productivity costs in health-state valuations: does explicit instruction matter? Pharmacoeconomics. 2006;24:401–14.PubMedCrossRefGoogle Scholar
  49. 49.
    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;12:172–80.PubMedCrossRefGoogle Scholar
  50. 50.
    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;29:503–12.PubMedCrossRefGoogle Scholar
  51. 51.
    Myers J, McCabe S, Gohmann S. Quality-of-life assessment when there is a loss of income. Med Decis Mak. 2007;27:27–33.CrossRefGoogle Scholar
  52. 52.
    Davidson T, Levin LA. Do individuals consider expected income when valuing health states? Int J Technol Assess Health Care. 2008;24:488–94.PubMedCrossRefGoogle Scholar
  53. 53.
    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;10:103–9.PubMedCrossRefGoogle Scholar
  54. 54.
    Tilling C, Krol M, Tsuchiya A, Brazier J, Exel J, Brouwer W. Does the EQ-5D reflect lost earnings? Pharmacoeconomics. 2012;30:47–61.PubMedCrossRefGoogle Scholar
  55. 55.
    Posnett J, Jan S. Indirect cost in economic evaluation: the opportunity cost of unpaid inputs. Health Econ. 1996;5:13–23.PubMedCrossRefGoogle Scholar
  56. 56.
    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;62:835–45.PubMedCrossRefGoogle Scholar
  57. 57.
    Hakkaart-van Rooijen L, Tan SS, Bouwmans CAM. Dutch costing manual. Rotterdam: institute for Medical Technology Assessment (by order of the Board of Health Insurances); 2010.Google Scholar
  58. 58.
    Brouwer WB, Koopmanschap MA, Rutten FF. Productivity losses without absence: measurement validation and empirical evidence. Health Policy. 1999;48:13–27.PubMedCrossRefGoogle Scholar
  59. 59.
    Lerner D, Amick BC 3rd, Rogers WH, Malspeis S, Bungay K, Cynn D. The Work Limitations Questionnaire. Med Care. 2001;39:72–85.Google Scholar
  60. 60.
    Hoefman RJ, van Exel J, Brouwer W. How to include informal care in economic evaluations. Pharmacoeconomics. 2013;31:1105–19.PubMedCrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

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

Personalised recommendations