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Variation in methodological approach to productivity cost valuation: the case of prostate cancer

Hanly, Paul, Maguire, Rebecca, Drummond, Frances J. and Sharp, Linda (2019) Variation in methodological approach to productivity cost valuation: the case of prostate cancer. The European Journal of Health Economics, 20 (9). pp. 1399-1408. ISSN 1618-7601

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Standardised integration of productivity costs into health economic evaluations is hindered by equity and distributional concerns. Our aim was to explore the distributive impact of productivity cost methodological variation, describing the consequences for different groups.

527 prostate cancer survivors (2–5 years post-diagnosis) completed questions on work patterns since diagnosis. Productivity loss, categorised into temporary/permanent absenteeism, reduced hours and presenteeism, were costed in €2012. Valuation approaches included the human capital approach (HCA) and the friction cost approach (FCA), with wage multipliers (WM) applied in additional analyses. Both national and self-reported wages were used. Costs were compared across socio-demographic and economic characteristics using non-parametric tests.

The estimated base case (HCA, using national wages) total productivity cost was €44,201 per prostate cancer survivor. Permanent absenteeism accounted for the largest cost (€18,537), followed by reduced work hours (€11,130), presenteeism (€8148) and temporary absenteeism (€6386). Alternative valuation estimates ranged from − 90% (FCAnational wage: €4625) to + 82% (HCAWMself-reported wage: €80,485) compared to the base case and were consistently higher for self-reported wages compared to national wages. Statistically significant differences in productivity cost were found across four of the six survivor socio-demographic and economic characteristics by valuation approach, despite no significant difference in their physical unit equivalents.

Our results indicate that the distributional impact of productivity costs varies by socio-economic and demographic characteristics. We advocate that: productivity loss should be reported in physical units where possible; cost estimation should be subject to sensitivity analysis, and only where this is not feasible, that the HCA and national wages be used to value productivity loss where equity concerns are paramount.

Item Type: Article
Subjects: Q Science > Life sciences > Medical sciences > Pathology > Tumors > Cancer
H Social Sciences > Economics > Microeconomics > Production (Economic theory) > Industrial productivity > Labor productivity
Divisions: School of Business > Staff Research and Publications
Depositing User: Caoimhe Ni Mhaicin
Date Deposited: 27 Jun 2019 12:46
Last Modified: 17 Feb 2020 14:00

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