Costing

Researchers’ ability to accurately determine the costs of health service delivery is severely limited even though there is a large body of literature on the costs of health care. This is particularly true in low- and middle-income settings. The Costing work group focuses on the collection of aggregate-level data for production units such as hospitals, community health clinics, and public health services that are more readily available (e.g., total costs/budgets, outpatient visits, capacity utilization). Econometric models are used to explain how the total cost of the production unit changes in response to differences in the number of intermediate outputs delivered (e.g., service mix, number of personnel, and scale of operations). This helps determine the setting-specific marginal cost of increasing intermediate outputs for each production unit.

Major activity in Costing:

Quantify the costs of health service delivery platforms through planning and initiating a costing study:

In conjunction with each of the project’s expert groups, IHME will determine the quantities of the intermediate outputs required to deliver specific interventions in order to calculate the total cost of delivering each intervention. A large empirical database on production unit costs also will be used in the work on platforms to test the relationship between total costs and the production of intermediate products and other attributes of institutions, such as the availability of information and the use of incentives. This project uses IHME’s multidisciplinary quantitative analysis skills and rigorous survey techniques to garner information from country sources to understand and attempt to quantify the cost of health systems and health service delivery platforms. IHME is currently collaborating with the World Bank’s International Comparison Program (ICP) to provide meaningful information for inter-country comparisons of health sector prices. This collaboration, called the Health Sector Price Project, will work with country partners to quantify the costs of health service delivery platforms, defined as conduits through which health interventions and public health measures are implemented (for example, hospitals or community health clinics). IHME will engage a diverse set of countries in which to test this costing instrument and ultimately produce an instrument that can be used continuously in all countries to determine prices within the health sector for every ICP round.

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