Estimating Downstream Budget Impacts in Implementation Research

Todd H. Wagner, Alex R. Dopp and Heather T. Gold
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Todd H. Wagner: Health Economics Resource Center, US Department of Veterans Affairs (VA) Palo Alto Health Care System, Menlo Park, CA, USA
Alex R. Dopp: RAND Corporation, Santa Monica, CA, USA
Heather T. Gold: Departments of Population Health and Orthopedic Surgery, New York University (NYU) Langone Health, NY, USA

Medical Decision Making, 2020, vol. 40, issue 8, 968-977

Abstract: Health care decision makers often request information showing how a new treatment or intervention will affect their budget (i.e., a budget impact analysis; BIA). In this article, we present key topics for considering how to measure downstream health care costs, a key component of the BIA, when implementing an evidence-based program designed to reduce a quality gap. Tracking health care utilization can be done with administrative or self-reported data, but estimating costs for these utilization data raises 2 issues that are often overlooked in implementation science. The first issue has to do with applicability: are the cost estimates applicable to the health care system that is implementing the quality improvement program? We often use national cost estimates or average payments, without considering whether these cost estimates are appropriate. Second, we need to determine the decision maker’s time horizon to identify the costs that vary in that time horizon. If the BIA takes a short-term time horizon, then we should focus on costs that vary in the short run and exclude costs that are fixed over this time. BIA is an increasingly popular tool for health care decision makers interested in understanding the financial effect of implementing an evidence-based program. Without careful consideration of some key conceptual issues, we run the risk of misleading decision makers when presenting results from implementation studies.

Keywords: budget impact analysis; cost; cost analysis; financial management; implementation science (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sae:medema:v:40:y:2020:i:8:p:968-977

DOI: 10.1177/0272989X20954387

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