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STEP 3: Define the Cost Perspective

There are several perspectives that can be used in cost analysis.

Societal Perspective

All costs for healthcare, hospitalization, and related services would be included in this perspective. In addition, client or patient costs would be defined, such as out-of-pocket payments. In the societal perspective, other indirect costs may be included, for example, gains or losses in employment that are directly associated with the morbidity-mortality of the target audience.

Client Perspective

All costs borne by the client within a target group, such as out-of-pocket payment for drugs, medications, transportation costs, child-care expenses, and loss of work due to the condition or participation in the HP-DP program would be included. It is more difficult to measure client costs, such as pain or anxiety, which may also be included, with a monetary value placed on these. Client copayment costs would be included in this category.

Agency Perspective

An economic analysis of an HP-DP program using an “agency perspective” would only include direct and indirect costs associated with the expenditure of resources to create, manage, and provide the program. This perspective asks the following: How much will it cost the agency funding the HP-DP program to routinely deliver it to the people and locations for which it was designed? The principal foci of this perspective are the direct costs associated with services consumed for a specific health problem, and the potential healthcare expenses avoided (or increased) as a result of an intervention. Other costs, such as patient loss of productivity, travel, out of pocket costs, and so on, would generally not be part of an agency perspective. Health maintenance organizations (HMOs), managed care organizations, and federal-state-local governments may pay for and/or reimburse related costs for an HP-DP intervention for specific problems among a target group. In most economic evaluations of HP-DP programs primarily designed to counsel participants to modify individual risk factors, or to change their self-care or health services utilization behaviors, an agency perspective will be typically taken.

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