title: Direct measurement of health care costs.
abstract: Cost identification is fundamental to many economic analyses of health care. Health care costs are often derived from administrative databases. Unit costs may also be obtained from published studies. When these sources will not suffice (e.g., in evaluating interventions or programs), data may be gathered directly through observation and surveys. This article describes how to use direct measurement to estimate the cost of an intervention. The authors review the elements of cost determination, including study perspective, the range of elements to measure, and short-run versus long-run costs. They then discuss the advantages and drawbacks of alternative direct measurement methods such as time-and-motion studies, activity logs, and surveys of patients and managers. A parsimonious data collection effort is desirable, although study hypotheses and perspective should guide the endeavor. Special reference is made to data sources within the Department of Veterans Affairs (VA) health care system.
authors.affiliation: Health Economics Resource Center, Center for Health Care Evaluation, Veterans Affairs Palo Alto Health Care System, USA.
authors.forename: Mark W
authors.initials: MW
authors.lastname: Smith
authors.forename: Paul G
authors.initials: PG
authors.lastname: Barnett
mesh_terms: D000066:Accounting / Q000191:economics / Q000379:methods; D002201:Capital Expenditures / Q000706:statistics & numerical data; D003362:Cost-Benefit Analysis; D003625:Data Collection / Q000379:methods* / Q000592:standards / Q000639:trends; D003627:Data Interpretation, Statistical; D004651:Employment / Q000191:economics; D005544:Forecasting; D017048:Health Care Costs / Q000706:statistics & numerical data*; D006270:Health Facility Administrators / Q000191:economics; D006302:Health Services Research / Q000379:methods* / Q000592:standards / Q000639:trends; D006801:Humans; D010561:Personnel Staffing and Scheduling / Q000191:economics; D015203:Reproducibility of Results; D012107:Research Design / Q000592:standards; D013996:Time and Motion Studies; D014195:Travel / Q000191:economics; D014481:United States; D014493:United States Department of Veterans Affairs / Q000191:economics; D016526:Workload