| Title: |
What are economic costs and when should they be used in health economic studies? |
| Authors: |
Turner, H; Sandmann, FG; Downey, LE; Orangi, S; Teerawattananon, Y; Vassall, A; Jit, M |
| Source: |
11 ; 1 |
| Publisher Information: |
BMC |
| Publication Year: |
2023 |
| Collection: |
Imperial College London: Spiral |
| Description: |
Economic analyses of healthcare interventions are an important consideration in evidence-based policymaking. A key component of such analyses is the costs of interventions, for which most are familiar with using budgets and expenditures. However, economic theory states that the true value of a good/service is the value of the next best alternative forgone as a result of using the resource and therefore observed prices or charges do not necessarily reflect the true economic value of resources. To address this, economic costs are a fundamental concept within (health) economics. Crucially, they are intended to reflect the resources’ opportunity costs (the forgone opportunity to use those resources for another purpose) and they are based on the value of the resource's next-best alternative use that has been forgone. This is a broader conceptualization of a resource’s value than its financial cost and recognizes that resources can have a value that may not be fully captured by their market price and that by using a resource it makes it unavailable for productive use elsewhere. Importantly, economic costs are preferred over financial costs for any health economic analyses aimed at informing decisions regarding the optimum allocation of the limited/competing resources available for healthcare (such as health economic evaluations), and they are also important when considering the replicability and sustainability of healthcare interventions. However, despite this, economic costs and the reasons why they are used is an area that can be misunderstood by professionals without an economic background. In this paper, we outline to a broader audience the principles behind economic costs and when and why they should be used within health economic analyses. We highlight that the difference between financial and economic costs and what adjustments are needed within cost calculations will be influenced by the context of the study, the perspective, and the objective. |
| Document Type: |
article in journal/newspaper |
| Language: |
unknown |
| Relation: |
Cost Effectiveness and Resource Allocation; http://hdl.handle.net/10044/1/103597 |
| DOI: |
10.1186/s12962-023-00436-w |
| Availability: |
http://hdl.handle.net/10044/1/103597; https://doi.org/10.1186/s12962-023-00436-w |
| Rights: |
© The Author(s) 2023. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. The Creative Commons Public Domain Dedication waiver (http://creativeco mmons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated in a credit line to the data. ; https://creativecommons.org/licenses/by/4.0/ |
| Accession Number: |
edsbas.DD200B24 |
| Database: |
BASE |