Potential Effects of the Choice of Costing Perspective on Cost Estimates: An Example Based on 6 Early Psychosis Intervention Programs.

Abstract

Because health care resources are constrained, decision-making processes often require clarifying the potential costs and savings associated with different options. This involves calculating a program's costs. The chosen costing perspective defines the costs to be considered and can ultimately influence decisions. Yet reviews of the literature suggest little attention has been paid to the perspective in economic evaluations. This article's purpose is to explore how the costing perspective can affect cost estimates. As a vehicle for our discussion, we use service use data for clients enrolled in 6 Ontario early psychosis intervention programs. Governmental and nongovernmental payer costing perspectives are considered. We examine annual costs associated with early psychosis intervention clients enrolled for ≤12 months versus those enrolled for >12 months. This also allows for an assessment of the impact that choice of time horizon can make on the results. The difference in total between group cost for hospital, emergency room, and physicians is $2499; the >12-month group has relatively higher mean costs. When all governmental and nongovernmental costs are considered, there is a mean between-group cost difference of $1272, with lower mean costs for the >12-month group. Although the Ministry of Health bears a large proportion of costs, other governmental agencies and the private sector can incur a sizeable share. This example demonstrates the potential importance of including other cost perspectives with the hospital sector in analyses as well as the impact of time horizon on cost estimates.