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A Practical Guide for Calculating Indirect Costs of Disease
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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“Either the friction cost method or the human capital approach is applied to determine the costs of absenteeism or inefficiency from paid work [44].”
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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)”
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Cost-effectiveness of psychotherapy for cluster B personality disorders
Soeteman, D. I., Verheul, R., Delimon, J., Meerman, A. M. M. A., van den Eijnden, E., Rossum, B. V., Ziegler, U. M., Thunnissen, M. M., Busschbach, J. J. V., & Kim, J. J. (2010) · The British Journal of Psychiatry · doi:10.1192/bjp.bp.109.070482 · Cited by 52
“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
Prieto, L. M., Sacristána, J. A., Prades, J. L. P., Badia, X. C., Antoñanzas, F., & del Llano, J. (2004) · Medicina Clínica · doi:10.1016/s0025-7753(04)74260-8 · Cited by 51
Ankylosing spondylitis: what is the cost to society, and can it be reduced?
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The pharmacoepidemiology of COPD: Recent advances and methodological discussion
Burney, P., Suissa, S., Soriano, J. B., Vollmer, W. M., Viegi, G., Sullivan, S. D., Fabbri, L. M., Sin, D. D., Ernst, P., Coultas, D., et al. (2003) · European Respiratory Journal · doi:10.1183/09031936.03.00060003 · Cited by 51
Gates, S., Perkins, G. D., Lamb, S. E., Kelly, C., THICKETT, D. R., Young, D., McAuley, D. F., Snaith, C., McCabe, C. J., Hulme, C. T., et al. (2013) · Health Technology Assessment · doi:10.3310/hta17380 · Cited by 51
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.”
MethodMolassiotis, 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 51
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“multiplying time off work due to the child’s illness by the parent’s salary [23].”
BackgroundRichards, D. A., Rhodes, S., Ekers, D., McMillan, D., Taylor, R. S., Byford, S., Barrett, B. M., Finning, K., Ganguli, P., Warren, F. C., et al. (2017) · Health Technology Assessment · doi:10.3310/hta21460 · Cited by 56
Cost‐of‐disease analysis in patients with gastro‐oesophageal reflux disease and Barrett's mucosa
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Pharmacoeconomic Considerations in the Management of Hypertension
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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
Mutubuki, E. N., Luitjens, M. A., Maas, E. T., Huygen, F. J. P. M., Ostelo, R., van Tulder, M. W., & van Dongen, J. M. (2019) · European Journal of Pain · doi:10.1002/ejp.1488 · Cited by 48
“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).”
MethodFaccioli, N., D’Onofrio, M., Comai, A., & Cugini, C. (2007) · La radiologia medica · doi:10.1007/s11547-007-0185-x · Cited by 48
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.”
BackgroundMethodInfluentialThe economic burden of informal care.
Andersson, A., Levin, L., & Emtinger, B. G. (2002) · PubMed · Cited by 48
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.”
BackgroundJohnston, K. J., Westerfield, W., Momin, S. R., Phillippi, R. H., & Naidoo, A. (2009) · Journal of Occupational and Environmental Medicine · doi:10.1097/jom.0b013e3181a1f5c8 · Cited by 52
Bhuiyan, M. U., Luby, S. P., Alamgir, N. I., Homaira, N., Mamun, A. A., Khan, J. A. M., Abedin, J., Sturm-Ramirez, K. M., Gurley, E. S., Zaman, R. U., et al. (2014) · Influenza and Other Respiratory Viruses · doi:10.1111/irv.12254 · Cited by 46
Metadata
- Authors
- Koopmanschap, M. A., & Rutten, F. F. H.
- Affiliations
- Erasmus University Rotterdam (NL)
- Corresponding author
- Koopmanschap, Marc A.
- Venue
- PharmacoEconomics
- Published
- 1996-11
- Volume
- 10
- Issue
- 5
- Pages
- 460-466
- ISSN
- 1170-7690 (ISSN-L)
- 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
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › 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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