Cost Analysis in 

Imp

lementat

ion 

Researc

h

Princi

ples and Exam

ples

Patsi Sinnott, PT, PhD

Q UERI Im

plementation Research Se

April 12, 2012 
What is th ?e question ?

 Does the i k? ntervention work? How much does the intervention co How much will it cost to implemen

– Will th i t ti h ti Will the intervention change over tim– Will the costs change over time – Can the implementation be more effic– Can the intervention be more efficien

Can the intervention be more efficien
M ti More questions 

 What outcomes can we achi i 

eve w

i

t

program? 

 How much will this program cost 

compared to others? compared to others? 

 What is the value (outcome/cost) of 

program compare

d to ot

her program

 Which 

p g ro

gram should we choose? 
Who is th ? e audience?

 C id ifi i Cost identification 

– Patients , providers, payers, policy m

 Cost effectiveness analysis 

– Patients providers payers policy m

Patients , providers, payers, policy m

 Budget impact analysis 

– Payers, policy makers 
Cost o t e te ve t o ?

What Costs ? What Costs ? 

 Cost 

of 

t

h

e inte

rve

n

t

i

o

n? 

 Cost of VA healthcare utilization?  T l ti f h lth ? Travel time 

for 

healthcare? 

 Cost of Non-VA utilization?  Cost of implementation?  Cost of the research? Cost of the research?  Unpaid caregiver time?  Oh ? t

her costs? 

5
A li

What costs where?

Audience Type of What cos

Patients , providers, payers, policy 

Cost identification Intervention costs 

Analysis 

Payers, policy 

k 

Budget Impact Above plus: 

I l t ti 

paye s, po cy makers makers Implementation c

VA Utilization 

Pay , p y yers, policy CEA/CUA All Above plus:makers 

p 

Non-VA utilizatioTravel Costs Caregiver costs 

Caregiver costs Indirects /overhea

What costs where?
C t os of th fe interventi on
C t os of th fe interventi on 

 Personnel costs 

– Clinician time 

– Support staff

 Supplies/DME  IT 

– Equipt

– Software– Maintenance

 Other? 
E ti ti th t E

stimating these cos

ts 

 Direct measurement 

– Observe/track activities and assign a 

 Pseudo bill 

– Use billing codes/services and assign 

Use billing codes/services and assign 

 Cost regression 

– When costs of care are known – Estimating the marginal costs Estimating the marginal costs 
E ti ti i i E

stimation 

dec

i

s

ions 

 Wh d i il bl ? What 

data 

is avail

abl

e? 

 Which method is feasible?  What method will give you the grea

analytic flexibility? analytic flexibility? 

 Which method will give you the gre

precision? 
Di t Mrec easurement 

 Id if ll l f h i 

Identify all elements of the interven

 Observe or track activities  Summarize time/materials and supp U VA l Use VA labor costs to estimate the 

of the time (time x $) 

E l xamp

les
First draft 

Pil d ot tested 

with relevant 

staff Revised and reformatted prior to initiation of the study Designed for “datafax”

Another example

h 

Another 

It is time consumingto track staff activitiesForm was created with i t f ith input from 

outreach workers 

Manager reviewed 

them for accuracy eac

week 
And 

another...

CPRS template CPRS templateDesigned for 

this study 

Implemented at all study sites 
Direct Measurement Cost 

Estimation – labor costs



S

ummari

ze the time the time

 Value the time 

– VA labor estimates 

 http://www.herc.research.va.gov/resour

c02.asp 

– Local salary data Local salary data– BLS– Oth ? er 
C t d Cost data f or suppli es, equipt, D

 National P ti t (N

Prosth eti cs Patient Database (N

– records purchase price of all items or

through the VISTA Prosthetics and S

Aids package 

– stored and handled by NPPD data ma

at Hines VAMC 

 Your local A&MMS purchasing officer 
Pseudo bill 

 U CPT/ h ili i d Use CPT/other utilization codes to 

estimate the intervention costs 

– When CPT coding is specified and ha

validity (and consistently em ployed)

– Use Medicare or other payment sched
P d bill Pseudo bill example

 P i at ents receive physical t herapy se

for back pain complaints 

– Physical medicine CPT code section 

document services provided 

– 97140 45 minutes (standar– 97110 Who is the provider

Who is the provider

– 97110 Where was this pro
Direct Measurement Direct Measurement 

- Pseudo 

Pseudo 

caveats

 W h f d bl i Watch 

for 

double count

ing 

– Clinicians may be entering CPT code

well as completing survey instrument

 Watch for inconsistent utilization o

Watch for inconsistent utilization o

codes across VAMCs 

– Ti l f d b lt d 

Time va

lue o

f co

des may 

be altere

d a

site (30 min code used as 15 min, etc

Micro-costi th d ting methods 

 Cost regression 

– Estimate marginal costs using statisti

techniques 
Ct i os regression 

 Use to estimate marginal eff ect of a

intervention 

 Use when data exists for current pra Not for new technology or when Not for new technology or when

accounting cost is not known
C t f th i l t ti Cos

t of the 

imp

lemen

t

ation
What is th ?e question ?

 Does the i k? ntervention work? How much does the intervention co How much will it cost to implemen

– Will th Will the implementati on change over 

– Will these costs change over time – Can the implementation be more effic

– How generalizeable are study costs? How generalizeable are study costs? 
E ti ti i i E

stimation 

dec

i

s

ions 

 Wh d i il bl ? What 

data 

is avail

abl

e? 

 Which method is feasible?  What method will give you the grea

analytic flexibility? analytic flexibility? 

 Which method will give you the gre

precision? 
E ti ti th d E

stimation meth

o

ds 

 Di M rect 

Measurement 

 Pseudo bill  Cost regression 
Elements of the Implementat
C ti th i l t ti Costing the 

imp

lemen

t

ation 

 PLAN  DO  STUDY  ACT 
–

I l t ti d i Implementation design 

 Creating the plan 

– Leadership engagement – Clinician participation – Support personnel Support personnel – Technical experts 

 Clinician training 

– Support training/admin staff training 
D t a a coll ecti on tools 

 Diaries?  CPRS?  Recall surveys?  Ob i servations  Web trends?  Other? 
F ? requency

?
I t n erventi on or Implementati 
I t n erventi on or Implementati 

 Clinician training  Coaching 

– Access the web – Documentation Documentation – Time of the coach 

 Ongoing leadership involvement  Technical experts Technical experts 
I t ti I l t t

I

n

tervention or 

Imp

lemen

t

at

 Or RESEARCH 

?
Will th Will these costs change over ti

 Intervention  Implementation  Ongoing support  M i a ntenance  Spread? 
Summary 

 Intervention costs  Implementation costs  Maintenance 
Reading

 Liu CF, Rubenstein LV, Kirchner JE, et al. 

Organizational cost of quality improvement fOrganizational cost of quality improvement f

depression care. Health Serv Res. Feb 

2009;44(1):225-244. 

 Wagner TH, Engelstad LP, McPhee SJ, Pasic

The costs of an outreach intervention for low-women with abnormal Pap smears. Prev ChroJan 2007;4(1):A11. 

 Wagner TH, Goldstein MK. Behavioral interv

and cost-effectiveness analysis. Prev Med. De2004;39(6):1208-1214.