A practical guide for calculating indirect costs of disease

Koopmanschap, Marc A.; Rutten, Frans F.H.

doi:10.2165/00019053-199610050-00003

Cited by 358Health Systems, Economic Evaluations, Quality of LifeEconomic and Environmental ValuationGlobal Health Care Issues

A practical guide for calculating indirect costs of disease

Koopmanschap, Marc A., Rutten, Frans F.H.·1996·PharmacoEconomics

DOI 10.2165/00019053-199610050-00003

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Abstract

There may be some discussion about whether indirect costs should be taken into account at all in an economic appraisal, but there is certainly considerable debate about the proper way of estimating these costs. This reviews offers a practical guide for quantifying and valuing these indirect costs of disease, both at an aggregated level of general cost of illness studies, and in an economic appraisal of specific healthcare programmes. Two methods of calculating these costs are considered: the traditional human capital approach, and the more recently developed friction cost method. The former method estimates the potential value of lost production as a result of disease, whereas the latter method intends to derive more realistic estimates of indirect costs, taking into account the degree of scarcity of labour in the economy. All necessary steps in the estimation procedure and the data required at various points will be described and discussed in detail.

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“Data for the assessment of the economic evaluation reporting standards were extracted using the Consolidated Health Economic Evaluation Reporting Standards (CHEERS) 2022 statement.”
From Productivity outcomes from chronic pain management interventions in the working age population; a systematic review (2024) · cites this paper as [20]

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“We calculated the productivity loss due to disability with the human capital approach and friction cost method [25, 26], the productivity loss due to sick leave, the total productivity loss and the cost of presenteeism.”
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“They include loss of production due to morbidity and mortality,[54-56] the former being divided into short term and permanent disability.”
Background
Surgery is more cost-effective than splinting for carpal tunnel syndrome in the Netherlands: results of an economic evaluation alongside a randomized controlled trial
Bos, I. B. C. K., Gerritsen, A. A. M., van Tulder, M. W., Mölken, M. R., Adèr, H. J., de Vet, H. C. W., & Bouter, L. M. (2006) · BMC Musculoskeletal Disorders · doi:10.1186/1471-2474-7-86 · Cited by 63 · see citing works
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Self-citation
The cost-effectiveness of introducing a varicella vaccine to the New Zealand immunisation schedule
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Method
Patient and Informal Caregiver Time in Cost-Effectiveness Analysis:A Response to the Recommendations of the Washington Panel
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Self-citation
Cognitive–behaviour therapy for health anxiety in medical patients (CHAMP): a randomised controlled trial with outcomes to 5 years
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“The cost of productivity losses was calculated using the human capital approach, when each day off work is valued at the daily salary for that individual.(45)”
Method
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Estimating the cost of lost productivity in dyspepsia
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“27 The period needed to replace a worker (the so-called friction period) is estimated to be 5 months; we therefore assumed the maximum indirect costs to society were limited to productivity losses during a period of 5 months.”
Análisis de costes y resultados en la evaluación económica de las intervenciones sanitarias
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Performing a Cost Analysis in Spine Outcomes Research
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“There are 2methods used to estimate the costs of loss of productivity: the human capital approach and the friction cost method.(22,36) In the human capital approach, indirect costs are based on the total expected production losses for an individual worker for the duration of impairment.”
Method
The effectiveness and cost-effectiveness of acupressure for the control and management of chemotherapy-related acute and delayed nausea: Assessment of Nausea in Chemotherapy Research (ANCHoR), a randomised controlled trial
Molassiotis, A., Russell, W., Hughes, J. G., Breckons, M., Lloyd‐Williams, M., Richardson, J., Hulme, C. T., Brearley, S. G., Campbell, M., Garrow, A. P., et al. (2013) · Health Technology Assessment · doi:10.3310/hta17260 · Cited by 50 · see citing works
Cost-effectiveness analysis of a communication-focused therapy for pre-school children with autism: results from a randomised controlled trial
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“multiplying time off work due to the child’s illness by the parent’s salary [23].”
Background
Cost and Outcome of BehaviouRal Activation (COBRA): a randomised controlled trial of behavioural activation versus cognitive–behavioural therapy for depression
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“[30] Indirect costs are much more difficult to estimate and currently there is no agreement between experts on whether or not they should be incorporated into the economic analysis.[15,31] Murray et al.”
Predictive factors of high societal costs among chronic low back pain patients
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“Absenteeism from paid employment was measured using the Productivity and Disease Questionnaire (PRODISQ; Koopmanschap, 2005), and was valued in accordance with the friction cost approach using hourly productivity costs of males and females (Koopmanschap & Rutten, 1996).”
Method
Contrast-enhanced ultrasonography in the characterization of benign focal liver lesions: activity-based cost analysis
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Different Approaches To Valuing the Lost Productivity of Patients with Migraine
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“Based on an empirical study, Koopmanschap et al.[14,19] have suggested that absences shorter than those that lead to replacement should be valued as only 80% of the production value lost in that period.”
BackgroundMethodInfluential
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The Burden of Migraine in Spain
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“,[39] who estimated that and working costs should be included in the producindirect costs accounted for 93% of the total cost of tivity losses).[63,65] migraine in the US.”
Background
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Economic burden of influenza‐associated hospitalizations and outpatient visits in B angladesh during 2010
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Authors: Koopmanschap, M. A., & Rutten, F. F. H.
Affiliations: Erasmus University Rotterdam (NL)
Corresponding author: Koopmanschap, Marc A.
Venue: PharmacoEconomics
Publisher: Springer Science and Business Media LLC
Published: 1996-11
Volume: 10
Issue: 5
Pages: 460-466
ISSN: 1170-7690 (ISSN-L)
DOI: 10.2165/00019053-199610050-00003
OpenAlex: W1980604588
Cited by: 358
References: 9
Citations by year: 2026: 7 · 2025: 5 · 2024: 8 · 2023: 2 · 2022: 17 · 2021: 9 · 2020: 8 · 2019: 10 · 2018: 10 · 2017: 19 · 2016: 11 · 2015: 11 · 2014: 14 · 2013: 12 · 2012: 8
FWCI: 22.73
Type: journal article
Language: en
Open access: closed
Locations: PharmacoEconomics (publishedVersion)
PubMed (publishedVersion)
EUR Research Repository (Erasmus University Rotterdam) (publishedVersion)
EUR Research Repository (Erasmus University Rotterdam) (submittedVersion)
Topics: Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Environmental Valuation
Health Sciences › Health Professions › General Health Professions › Global Health Care Issues
Keywords: economic burden, human capital approach, friction cost method, productivity loss, economic evaluation, labor shortage, cost estimation
MeSH terms: Cost-Benefit Analysis, Delivery of Health Care, Humans, Disease Management

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A practical guide for calculating indirect costs of disease

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