Cost Measurement in Evaluations of Prevention Programs for Children

1. Cost Measurement in Evaluations of Prevention Programs for Children *Eric Slade, Ph.D.University of Maryland, School of Medicine and the Johns Hopkins Univ. Center for Prevention and Early Intervention October 28, 2005 * Financial support for this presentation was provided by NIMH Grant No. P30MH066247

2. Statement of the Problem • The reported costs of different programs often are not directly comparable. • Differences in methods used. • Differences in reporting. • High comparability of cost estimates across programs/interventions is obviously desirable. • How much would it actually cost? To whom?

3. Overview • Examples • 7 Recommendations for Good Practice

4. Example 1: Implicit Time Costs • Program A is nurse home visiting; program B is school-based mediation skills. • Suppose A could be implemented at lower monetary cost than B, but is it less costly? • A’s protocol specifies parenting training sessions 5 hours/week for up to 6 weeks. • B does not require parent involvement, but does require students complete homework.

5. Example 1: Implicit Time Costs • How much time did parents contribute to each program? • What is the economic value of their time? • Depends on parents’ opportunity costs – not zero. • In principle, would be valued by the min. monetary inducement required to ensure their participation in the program.

6. Example 2: Capital Expenses • Program B requires use of a classroom 5 hours per week for 9 months. • Participating schools donated space at no cost to the program. • Explicit valuation of the space is essential. • Not doing so would make B look artificially cheap. • Could use rental cost for similar space OR depreciation plus foregone investment return.

7. Example 3: Related Expenses • Program A resulted in additional trips to primary care providers by case managers and parents. • Program B did not involve any services beyond the intervention. • May assign value to each trip, but may or may not include the costs of the primary care visits.

8. Recommendations • Need a professional consensus statement on standards for reporting costs. • Prior to then, report technical specifications. • All resources utilized by a program or whose rate of use is influenced by the program should be assigned costs. • When theoretical perspective on cost is potentially ambiguous (e.g., societal versus the public cost) report two sets of measures.

9. Recommendations • Report both total costs and costs per hour (or minute) per participant. • Report setup, operating, and follow-up costs separately, and state how setup costs were distributed to the program. • Discuss impacts of any assumptions about cost offsets. e.g., Programs A & B could both prevent school disciplinary events.

10. Recommendations • Conduct sensitivity analyses on unit prices and probabilities adopted from external sources (e.g., special education costs).

11. For More Information See E. Michael Foster’s website: www.unc.edu/~emfoster Scroll down to “new papers.”