Rethinking How We Measure Costs in Implementation Research

Abstract

Background

Hospitals and other health care delivery organizations are sometimes resistant to implementing evidence‐based programs, citing unknown budgetary implications.

Objective

In this paper, I discuss challenges when estimating health care costs in implementation research.

Design

A case study with intensive care units highlights how including fixed costs can cloud a short‐term analysis.

Participants

None.

Interventions

None.

Main Measures

Health care costs, charges and payments.

Key Results

Cost data should accurately reflect the opportunity costs for the organization(s) providing care. Opportunity costs are defined as the benefits foregone because the resources were not used in the next best alternative. Because there is no database of opportunity costs, cost studies rely on accounting data, charges, or payments as proxies. Unfortunately, these proxies may not reflect the organization’s opportunity costs, especially if the goal is to understand the budgetary impact in the next few years.

Conclusions

Implementation researchers should exclude costs that are fixed in the time period of observation because these assets (e.g., space) cannot be used in the next best alternative. In addition, it is common to use costs from accounting databases where we implicitly assume health care providers are uniformly efficient. If providers are not operating efficiently, especially if there is variation in their efficiency, then this can create further problems. Implementation scientists should be judicious in their use of cost estimates from accounting data, otherwise research results can misguide decision makers.

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Acknowledgments

I thank Angela So for her comments and suggestions. This paper was based on a presentation made on June 3, 2019, to the Cost and Implementation working group.

Funding

Funding was provided by the VA Department of Veterans Affairs to Todd Wagner through a Research Career Scientist Award (RCS 17-154).

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Correspondence to Todd H. Wagner PhD.

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Wagner, T.H. Rethinking How We Measure Costs in Implementation Research. J GEN INTERN MED 35, 870–874 (2020). https://doi.org/10.1007/s11606-020-06104-6

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KEY WORDS

  • costs and cost analysis
  • budgets
  • cost-benefit analysis
  • economic models