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Centre‐specific or average unit costs in multi‐centre studies? Some theory and simulation

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  • M. Raikou
  • A. Briggs
  • A. Gray
  • A. McGuire

Abstract

Costing issues are increasingly being addressed in multi‐centre studies. In this paper, two methods for collecting costing information are compared within a simulated clinical trial setting. One method estimates average treatment costs by applying unit costs averaged across treatment centres to centre‐specific volumes of resource use. The second uses centre‐specific information for both the unit costs and the resource volumes, and then averages across centres. Using a pre‐specified production relation between the different volumes of resource use, and simulating changes in unit costs, it is shown that these two methods result in statistically different estimates of average treatment costs. This finding holds, regardless of the degree of substitutability between the resource volumes, except when considerable uncertainty surrounds treatment centre responses to relative changes in unit costs. The findings suggest that a more cautious approach should be adopted in the collection, calculation and interpretation of treatment costs in multi‐centre studies. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • M. Raikou & A. Briggs & A. Gray & A. McGuire, 2000. "Centre‐specific or average unit costs in multi‐centre studies? Some theory and simulation," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 191-198, April.
    • Handle: RePEc:wly:hlthec:v:9:y:2000:i:3:p:191-198
    DOI: 10.1002/(SICI)1099-1050(200004)9:3<191::AID-HEC510>3.0.CO;2-1
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    References listed on IDEAS

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    1. David K. Whynes & Andrew R. Walker, 1995. "On approximations in treatment costing," Health Economics, John Wiley & Sons, Ltd., vol. 4(1), pages 31-39, January.
    2. Fenn, Paul & McGuire, Alistair & Backhouse, Martin & Jones, David, 1996. "Modelling programme costs in economic evaluation," Journal of Health Economics, Elsevier, vol. 15(1), pages 115-125, February.
    3. Joseph Lipscomb & Marek Ancukiewicz & Giovanni Parmigiani & Vic Hasselblad & Greg Samsa & David B. Matchar, 1998. "Predicting the Cost of Illness," Medical Decision Making, , vol. 18(2_suppl), pages 39-56, April.
    4. Richard J. Willke & Henry A. Glick & Daniel Polsky & Kevin Schulman, 1998. "Estimating country‐specific cost‐effectiveness from multinational clinical trials," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 481-493, September.
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    Cited by:

    1. Andrea Manca & Nigel Rice & Mark J. Sculpher & Andrew H. Briggs, 2005. "Assessing generalisability by location in trial‐based cost‐effectiveness analysis: the use of multilevel models," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 471-485, May.
    2. Richard Grieve & Richard Nixon & Simon G. Thompson & Charles Normand, 2005. "Using multilevel models for assessing the variability of multinational resource use and cost data," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 185-196, February.
    3. S. Tan & F. Rutten & B. Ineveld & W. Redekop & L. Hakkaart-van Roijen, 2009. "Comparing methodologies for the cost estimation of hospital services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(1), pages 39-45, February.
    4. Richard Grieve & John Cairns & Simon G. Thompson, 2010. "Improving costing methods in multicentre economic evaluation: the use of multiple imputation for unit costs," Health Economics, John Wiley & Sons, Ltd., vol. 19(8), pages 939-954, August.
    5. Thompson, Simon G. & Nixon, Richard M. & Grieve, Richard, 2006. "Addressing the issues that arise in analysing multicentre cost data, with application to a multinational study," Journal of Health Economics, Elsevier, vol. 25(6), pages 1015-1028, November.
    6. Tarricone, Rosanna, 2006. "Cost-of-illness analysis: What room in health economics?," Health Policy, Elsevier, vol. 77(1), pages 51-63, June.
    7. Grégoire Mercier & Gérald Naro, 2014. "Costing Hospital Surgery Services: The Method Matters," Post-Print hal-01829947, HAL.
    8. Maria Raikou & Alistair McGuire, 2012. "Estimating Costs for Economic Evaluation," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 43, Edward Elgar Publishing.
    9. Raymond Oppong & Joanna Coast & Kerry Hood & Jacqui Nuttall & Richard Smith & Christopher Butler, 2011. "Resource use and costs of treating acute cough/lower respiratory tract infections in 13 European countries: results and challenges," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 319-329, August.

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