Cost: It's all in the eye of the beholder

Abstract

In a past missive, we started to examine the process of capital budgeting at the hospital level and illustrated the principle with a relevant example (1). Intimately tied to this example was the idea that we need to spend money to save money. In our example, we detailed a purchase and demonstrated how the savings gleaned outweighed the expense, justifying the cash outlay. In doing so, we quantified the cost of a purchase from the perspective of the hospital administrator. To be honest, we used the term ‘cost’ loosely when we really meant ‘expense’. It is loose substitutions such as these that muddy the waters of cost comparisons. To some extent we quantified the cost of a surgical procedure, but did we really calculate the cost of the intervention? At the recent Canadian Society Meeting held in Calgary (Alberta), practicing staff and trainees presented an unprecedented number of articles exploring, estimating and comparing treatment on the basis of cost (2). Contrast this to presentations from before the economic crash of 2007 (3). Many argue that cost should factor into all research protocols moving forward. Granting agencies agree. Cost analysis not only ensures that care is delivered in a cost-effective manner, but it also ensures that care can continue to be delivered at all; we are sitting on the cusp of an era in which physicians will need to argue effectively to continue to ply their trade (4). But how do we decide how to calculate cost, and from whose perspective?