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Centre‐specific or average unit costs in multi‐centre studies? Some theory and simulation

Maria Raikou, A. Briggs, Alastair Gray () and A. McGuire

Health Economics, 2000, vol. 9, issue 3, 191-198

Abstract: Costing issues are increasingly being addressed in multi‐centre studies. In this paper, two methods for collecting costing information are compared within a simulated clinical trial setting. One method estimates average treatment costs by applying unit costs averaged across treatment centres to centre‐specific volumes of resource use. The second uses centre‐specific information for both the unit costs and the resource volumes, and then averages across centres. Using a pre‐specified production relation between the different volumes of resource use, and simulating changes in unit costs, it is shown that these two methods result in statistically different estimates of average treatment costs. This finding holds, regardless of the degree of substitutability between the resource volumes, except when considerable uncertainty surrounds treatment centre responses to relative changes in unit costs. The findings suggest that a more cautious approach should be adopted in the collection, calculation and interpretation of treatment costs in multi‐centre studies. Copyright © 2000 John Wiley & Sons, Ltd.

Date: 2000
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https://doi.org/10.1002/(SICI)1099-1050(200004)9:33.0.CO;2-1

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