Table 3 Glossary

Benefit-cost ratio (BCR)

The ratio of the monetary benefits of an intervention relative to its costs.

Cost-effectiveness ratio

A statistic used to summarise the cost-effectiveness of a health care intervention. It is defined as the cost of an intervention, divided by its effectiveness.

Direct costs

Direct costs represent the value of the goods, services, and resources consumed in providing and accessing health care. These can be split into two types: the costs borne by the health system (such as for personnel and hospital services), and the costs borne by the patients/the community (such as for transportation to the health facility).

Disability-adjusted life years (DALYs)

DALYs are a measure of disease burden and are calculated as the sum of the years of life lost due to premature mortality and the years of healthy life lost due to disability. The number of years of healthy life lost due to disability are calculated using a disability weight factor (which is between 0 and 1) that reflects the severity of the disease. One DALY can be thought of as one year of “healthy” life lost.

Discounting/discount rate

Discounting is the process of adjusting future costs and outcomes to a “present value”. The discount rate determines the strength of the time preference.

Economic costs

Economic costs represent the full value of all the resources used for an intervention – including the value of donated resources. These are important when considering issues related to the sustainability and replicability of interventions. Examples of resources, which often have no financial costs but can have important economic costs are the ‘free’ use of building space provided by Ministries of Health, and the time devoted to mass drug administration by volunteer community drug distributors.

Economies of scale

The reduction in the average cost per unit resulting from increased production/output: in this case, the reduction in the cost per treatment as a result of increasing the number treated.

Economies of scope

The reduction in the average cost per unit resulting from producing two or more products at once: in this case, the reduction in the cost per treatment, when delivering more than one intervention at once (i.e. integrated control programmes)

Financial costs

The actual expenditure (i.e. the amount paid) for the goods and services that are purchased.

Fixed costs

Costs that are not dependent on the amount of output: in this case costs that do not change regardless of the total number of people treated.

Friction cost approach

The friction cost approach takes the employer’s perspective for valuing lost productivity, and therefore only counts as lost, the hours not worked before another employee takes over the patient’s work [32, 33]. It is based on the assumption that an ill individual can eventually be replaced by a healthy worker - therefore the initial productivity levels are restored after this ‘friction period’.

Human capital approach

The human capital approach takes the patient’s perspective for valuing lost productivity and therefore counts any hour not worked by the patient as an hour lost. With this approach, all potential production not performed by a patient because of morbidity or premature mortality is counted as a production loss [32].

Indirect costs (productivity costs):

Indirect costs represent the value of the productivity losses that result from illness, treatment, or premature death.

Perspective

The study perspective is the viewpoint from which the intervention’s costs and consequences are evaluated. When adopting the healthcare providers perspective, the costs falling outside the healthcare sector are ignored. In contrast, when adopting the societal perspective, all relevant cost categories should be included - including those incurred by the patients.

Time horizon

The time horizon for the analysis determines the duration over which the outcomes and costs are calculated.