Abstract
The object of this review is to present and to shed light on joint cost-allocation methods that are used in the healthcare sector for pricing purposes or cost-effectiveness purposes in different countries. The concept of jointness is illustrated through joint products and joint costs as found in the example of blood component production. The descriptive review, fundamentally concept-centric, highlights that the cost of blood products or blood price-setting is an issue in legislative proposals at the national and state levels and represents a matter of public interest and of public regulation. In applying economic models (based on economic principles and behavior axioms) rather than accounting methodology (based on physical measures or on market value of the split/final products), scholars have brought to light the problems arising from the continuous search for a neutral method for allocating joint costs in the blood production sector. Numerous studies have focused on the blood costs for the health system. Nevertheless, the cost accounting and reimbursement system effectively underlying the acquisition, screening, and transfusion of blood appears, in practice, to be largely obscure. Moreover, the literature provides little insights into the level of “relative importance” assigned to each product in the costing setting. The current status of the discussion offers opportunities for future researches, which could be directed toward investigating the relationships between national systems of healthcare services and the cost-allocation methods used to determine the cost/price of blood components, analyzing the effect of public regulation on blood costs and, lastly, developing a method based more on the benefit-value to users.
Highlights
There is a joint-cost allocation problem in matters of public interest, as concerns the health and economic relevance of blood product costs (Cumming, Wallace, Surgenor, Mierzwa, & Smith, 1974; Dixon & Trenchard, 2001; Lowe, 1997; Trenchard & Dixon, 2003)
The main objective and contribution of this paper is to review the extant literature on cost-allocation methods applied to the joint costs of producing blood components, in order to offer a synthesis of the current status of the discussion and a base for further research in this field
The research questions are better defined: “What cost-allocation methods are used in defining blood product costs?” and “What is the understanding of blood products as joint products?”
Summary
There is a joint-cost allocation problem in matters of public interest, as concerns the health and economic relevance of blood product costs (Cumming, Wallace, Surgenor, Mierzwa, & Smith, 1974; Dixon & Trenchard, 2001; Lowe, 1997; Trenchard & Dixon, 2003). Several research studies, focused on the U.S context, accounted the cost of blood transfusions incurred by a hospital entity (Custer, Agapova, & Martinez, 2010; Forbes et al, 1991; Sullivan & Wallace, 2005; Surgenor, Wallace, Cumming, Mierzwa, & Smith, 1973; Toner et al, 2011), highlighting the acquisition cost or price paid by the hospital for a unit of blood products (principally red cells) and identifying the cost variation (by year and/or by region) in blood services They analyzed the blood product cost from a payer's perspective: the final price charged by suppliers
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