title: An improved set of standards for finding cost for cost-effectiveness analysis.
abstract: BACKGROUND
  Guidelines have helped standardize methods of cost-effectiveness analysis, allowing different interventions to be compared and enhancing the generalizability of study findings. There is agreement that all relevant services be valued from the societal perspective using a long-term time horizon and that more exact methods be used to cost services most affected by the study intervention. Guidelines are not specific enough with respect to costing methods, however.
  
  
  METHODS
  The literature was reviewed to identify the problems associated with the 4 principal methods of cost determination.
  
  
  RESULTS
  Microcosting requires direct measurement and is ordinarily reserved to cost novel interventions. Analysts should include nonwage labor cost, person-level and institutional overhead, and the cost of development, set-up activities, supplies, space, and screening. Activity-based cost systems have promise of finding accurate costs of all services provided, but are not widely adopted. Quality must be evaluated and the generalizability of cost estimates to other settings must be considered. Administrative cost estimates, chiefly cost-adjusted charges, are widely used, but the analyst must consider items excluded from the available system. Gross costing methods determine quantity of services used and employ a unit cost. If the intervention will affect the characteristics of a service, the method should not assume that the service is homogeneous.
  
  
  CONCLUSIONS
  Questions are posed for future reviews of the quality of costing methods. The analyst must avoid inappropriate assumptions, especially those that bias the analysis by exclusion of costs that are affected by the intervention under study.
authors.affiliation: Health Economics Resource Center, US Department of Veterans Affairs and Department of Health Research and Policy, Stanford University School of Medicine, Stanford, California, USA. paul.barnett@va.gov
authors.forename: Paul G
authors.initials: PG
authors.lastname: Barnett
mesh_terms: D002201:Capital Expenditures; D003362:Cost-Benefit Analysis / Q000379:methods* / Q000592:standards; D003625:Data Collection / Q000379:methods* / Q000592:standards; D003657:Decision Making; D003660:Decision Support Systems, Management; D017048:Health Care Costs; D005102:Health Expenditures; D017721:Hospital Costs; D006801:Humans; D011787:Quality of Health Care; D014481:United States