A multiple account framework for cost-benefit analysis

The paper presents a spreadsheet-based multiple account framework for cost-benefit analysis which incorporates all the usual concerns of cost-benefit analysts such as shadow-pricing to account for market failure. distribution of net benefits. sensitivity and risk analysis, cost of public funds, and environmental effects. The approach is generalizable to a wide range of projects and situations and offers a number of advantages to both analysts and decision-makers, including transparency, a check on internal consistency, and a detailed summary of project net benefits disaggregated by stakeholder group. Of particular importance is the ease with which this framework allows for a project to be evaluated from alternative decision-making perspectives and under alternative policy scenarios where the trade-offs among the project's stakeholders can readily be identified and quantified. (C) 2004 Elsevier Ltd. All rights reserved.

Warranty cost analysis for second-hand products

For second-hand products sold with warranty, the expected warranty cost for an item to the manufacturer, depends on (i) the age and/or usage as well as the maintenance history for the item and (ii) the terms of the warranty policy. The paper develops probabilistic models to compute the expected warranty cost to the manufacturer when the items are sold with free replacement or pro rata warranties. (C) 2000 Elsevier Science Ltd. All rights reserved.

Assessing cost-effectiveness in mental health: vocational rehabilitation for schizophrenia and related conditions

Objective: Existing evidence suggests that vocational rehabilitation services, in particular individual placement and support (IPS), are effective in assisting people with schizophrenia and related conditions gain open employment. Despite this, such services are not available to all unemployed people with schizophrenia who wish to work. Existing evidence suggests that while IPS confers no clinical advantages over routine care, it does improve the proportion of people returning to employment. The objective of the current study is to investigate the net benefit of introducing IPS services into current mental health services in Australia. Method: The net benefit of IPS is assessed from a health sector perspective using cost-benefit analysis. A two-stage approach is taken to the assessment of benefit. The first stage involves a quantitative analysis of the net benefit, defined as the benefits of IPS (comprising transfer payments averted, income tax accrued and individual income earned) minus the costs. The second stage involves application of 'second-filter' criteria (including equity, strength of evidence, feasibility and acceptability to stakeholders) to results. The robustness of results is tested using the multivariate probabilistic sensitivity analysis. Results: The costs of IPS are $A10.3M (95% uncertainty interval $A7.4M-$A13.6M), the benefits are $A4.7M ($A3.1M-$A6.5M), resulting in a negative net benefit of $A5.6M ($A8.4M-$A3.4M). Conclusions: The current analysis suggests that IPS costs are greater than the monetary benefits. However, the evidence-base of the current analysis is weak. Structural conditions surrounding welfare payments in Australia create disincentives to full-time employment for people with disabilities.

Costs of managing urinary and faecal incontinence in a sub-acute care facility: A "bottom-up" approach

Aims: To measure accurately the direct costs of managing urinary and faecal incontinence in the sub-acute care setting. Materials and Methods: Prospective observational study was undertaken in two sub-acute care units in a metropolitan hospital. A consecutive series of 29 consecutive patients with urinary and/or faecal incontinence, who were in-patients in a geriatric rehabilitation or subacute neurologic unit underwent routine timed voiding protocol, as per usual care. Face-to-face bedside recordings of all incontinence care, with detailed cost analysis, were undertaken. Results: A total of 3,621 occasions of continence care were costed. The median time per 24 hr spent caring for incontinence per patient was 109 min (interquartile range 88-140). Isolated urinary incontinence episodes occurred in 28 patients (96.5%), mixed urinary/faecal incontinence episodes observed in 79.3%, and episodes of pure faecal incontinence were seen in 62%. The median costs of incontinence care in the sub-acute setting was $49AU per 24 hr, the major share ($41) spent on staff wages. The incontinence tasks of toileting assistance, pad changes, bed changes and catheter care were spread evenly across the three 8 hr shifts of duty. Conclusions: As our population demographics include an increasingly greater portion of the elderly, for whom long term institutional care is becoming relatively more scarce, provision of care in the sub-acute unit that may allow rehabilitation and return to home warrants scrutiny. This is the first study that delineates the costs of managing urinary and faecal incontinence in the sub-acute care setting. Such costs are substantial and place a heavy burden upon night-time carets. (C) 2004 Wiley-Liss, Inc.

Light alloy castings for automotive applications: The case of Al vs Mg

The economical and environmental effects of mass reduction through Al and Mg primary alloys substitutions for cast iron and steel in automotive components are discussed using MF. Ashby's penalty functions method The viability of Mg alloy substitutions for existing Al alloy cast components is also considered. The cost analysis shows that direct, equal-volume, Al alloy substitutions for cast iron and steel are the most feasible in terms of the CAFE liability, followed by substitutions involving flat panels of prescribed stiffness. When the creation of CO2 associated to the production of Al and Mg is considered, the potential gasoline savings over the lifespan of the car compensate for the intrinsic environmental burden of Al in all applications, while electrolytic Mg substitutions for cast iron and steel are feasible for equal volume and panels only. Magnesium produced by the Pidgeon thermal process appears to be too primary energy intensive to be competitive in structural applications. Magnesium substitutions for existing Al alloy beams and panels are generally unviable. The current higher recycling efficiency of Al casting alloys confers Al a significant advantage over Mg alloys.

Improving the economic decision making capability and viability of Chinese wool textile mills

The successful restructuring of Chinese industries is of immense importance not only for the continued development of China but also to the stability of the world economy. The transformation of the Chinese wool textile industry illustrates well the many problems and pressures currently facing most Chinese industries. The Chinese wool textile industry has undergone major upheaval and restructuring in its drive to modernize and take advantage of developments in world textile markets. Macro level ownership and administrative reforms are well advanced as is the uptake of new technology and equipment. However, the changing market and institutional environment also demands an increasing level of sophistication in mill management decisions including product selection, input procurement, product pricing, investment appraisal, cost analysis and proactive identification of new market and growth opportunities. This paper outlines a series of analyses that have been integrated into a decision-making model designed to assist mill managers with these decisions. Features of the model include a whole-of-mill approach, a design based on existing mill structures and information systems, and the capacity for the model to be tailored to individual mills. All of these features facilitate the adoption of the model by time and resource constrained managers seeking to maintain the viability of their enterprises in the face of extremely dynamic market conditions.

Probabilistic cost benefit analysis of generation investment in a deregulated electricity market

A new methodology is proposed for the analysis of generation capacity investment in a deregulated market environment. This methodology proposes to make the investment appraisal using a probabilistic framework. The probabilistic production simulation (PPC) algorithm is used to compute the expected energy generated, taking into account system load variations and plant forced outage rates, while the Monte Carlo approach has been applied to model the electricity price variability seen in a realistic network. The model is able to capture the price and hence the profitability uncertainties for generator companies. Seasonal variation in the electricity prices and the system demand are independently modeled. The method is validated on IEEE RTS system, augmented with realistic market and plant data, by using it to compare the financial viability of several generator investments applying either conventional or directly connected generator (powerformer) technologies. The significance of the results is assessed using several financial risk measures.

Normative influence and rational conflict decisions: Group norms and cost-benefit analyses for intergroup behavior

The present paper articulates a model in which ingroup and outgroup norms inform 'rational' decision-making (cost-benefit analysis) for conflict behaviors. Norms influence perceptions of the consequences of the behavior, and individuals may thus strategically conform to or violate norms in order to acquire benefits and avoid costs. Two studies demonstrate these processes in the context of conflict in Quebec. In the first study, Anglophones' perceptions of Francophone and Anglophone norms for pro-English behaviors predicted evaluations of the benefits and costs of the behaviors, and these cost-benefit evaluations in turn mediated the norm-intention links for both group norms. In the second study, a manipulated focus on supportive versus hostile ingroup and outgroup norms also predicted cost-benefit evaluations, which mediated the norm-intention relationships. The studies support a model of strategic conflict choices in which group norms inform, rather than suppress, rational expectancy value processes. Implications for theories of decision-making and normative influence are discussed.

Cost-effectiveness analysis of a kidney and cardiovascular disease treatment program in an Australian aboriginal population

The objective of the study was to assess, from a health service perspective, whether a systematic program to modify kidney and cardiovascular disease reduced the costs of treating end-stage kidney failure. The participants in the study were 1,800 aboriginal adults with hypertension, diabetes with microalbuminuria or overt albuminuria, and overt albuminuria, living on two islands in the Northern Territory of Australia during 1995 to 2000. Perindopril was the primary treatment agent, and other medications were also used to control blood pressure. Control of glucose and lipid levels were attempted, and health education was offered. Evaluation of program resource use and costs for follow-up periods was done at 3 and 4.7 years. On an intention-to-treat basis, the number of dialysis starts and dialysis-years avoided were estimated by comparing the fate of the treatment group with that of historical control subjects, matched for disease severity, who were followed in the before the treatment program began. For the first three years, an estimated 11.6 person-years of dialysis were avoided, and over 4.7 years, 27.7 person-years of dialysis were avoided. The net cost of the program was $1,210 more per person per year than status quo care, and dialyses avoided gave net savings of $1.0 million at 3 years and $3.4 million at 4.6 years. The treatment program provided significant health benefit and impressive cost savings in dialysis avoided. (C) 2005 by the National Kidney Foundation, Inc.

General practitioners' role in preventive medicine: scenario analysis using alcohol as a case study

The purpose of this analysis is threefold: first, to extract from the literature, current levels of GP detection of at-risk drinking by their patients, rates at which general practitioners (GPs) offer an intervention; and the effectiveness of these interventions; secondly, to develop a model based on this literature to be used in conjunction with scenario analysis; and thirdly, to consider the cost implications of current efforts and various scenarios. This study deals specifically with Australian general practice. A two-step procedure is used in the scenario analysis, which involves identifying opportunities for detection, intervention, effectiveness and assigning probabilities to outcomes. The results suggest that increasing rates of GP intervention achieves greatest benefit and return on resource use. For every 5% point increase in the rate of GP intervention, an additional 26 754 at-risk drinkers modify their drinking behaviour at a cost of $231.45 per patient. This compares with a cost per patient modifying drinking behaviour of $232.60 and $208.31 for every 5% point increase in the rates of detection and effectiveness, respectively. The knowledge, skill and attitude of practitioners toward drinking are significant, and they can be the prime motivators in persuading their patients to modify drinking behaviour.

Cost of an emerging epidemic: an economic analysis of atrial fibrillation in the UK

Objective: To evaluate the cost of atrial fibrillation (AF) to health and social services in the UK in 1995 and, based on epidemiological trends, to project this estimate to 2000. Design, setting, and main outcome measures: Contemporary estimates of health care activity related to AF were applied to the whole population of the UK on an age and sex specific basis for the year 1995. The activities considered ( and costs calculated) were hospital admissions, outpatient consultations, general practice consultations, and drug treatment ( including the cost of monitoring anticoagulant treatment). By adjusting for the progressive aging of the British population and related increases in hospital admissions, the cost of AF was also projected to the year 2000. Results: There were 534 000 people with AF in the UK during 1995. The direct'' cost of health care for these patients was pound 244 million (similar toE350 million) or 0.62% of total National Health Service ( NHS) expenditure. Hospitalisations and drug prescriptions accounted for 50% and 20% of this expenditure, respectively. Long term nursing home care after hospital admission cost an additional pound46.4 million (similar toE66 million). The direct cost of AF rose to pound459 million (similar toE655 million) in 2000, equivalent to 0.97% of total NHS expenditure based on 1995 figures. Nursing home costs rose to pound111 million (similar toE160 million). Conclusions: AF is an extremely costly public health problem.

A cost-effectiveness analysis of buprenorphine-assisted heroin withdrawal

The purpose of this study was to conduct a cost - effectiveness analysis of detoxification from heroin using buprenorphine in a specialist clinic versus a shared care setting. A randomized controlled trial was conducted with a total of 115 heroin-dependent patients receiving a 5-day treatment regime of buprenorphine. The specialist clinic was a community-based treatment agency in inner-city Sydney. Shared care involved treatment by a general practitioner supplemented by weekend dispensing and some concurrent counselling at the specialist clinic. Quanti. cation of resource use was limited to inputs for treatment provision. The primary outcome measure used in the economic analysis was the proportion of each group that completed detoxification and achieved an initial 7-day period of abstinence. Buprenorphine detoxification in the shared care setting was estimated to be $24 more expensive per patient than treatment at the clinic, which had an average treatment cost of $332 per patient. Twenty-three per cent of the shared care patients and 22% of the clinic patients reported no opiate use during the withdrawal period. These results suggest that the provision of buprenorphine treatment for heroin dependence in shared care and clinic appear to be equally cost - effective.

A cost-effectiveness analysis of two rehabilitation support services for women with breast cancer

The purpose of this research was to estimate the cost-effectiveness of two rehabilitation interventions for breast cancer survivors, each compared to a population-based, non-intervention group (n = 208). The two services included an early home-based physiotherapy intervention (DAART, n = 36) and a group-based exercise and psychosocial intervention (STRETCH, n = 31). A societal perspective was taken and costs were included as those incurred by the health care system, the survivors and community. Health outcomes included: (a) 'rehabilitated cases' based on changes in health-related quality of life between 6 and 12 months post-diagnosis, using the Functional Assessment of Cancer Therapy - Breast Cancer plus Arm Morbidity (FACT-B+4) questionnaire, and (b) quality-adjusted life years (QALYs) using utility scores from the Subjective Health Estimation (SHE) scale. Data were collected using self-reported questionnaires, medical records and program budgets. A Monte-Carlo modelling approach was used to test for uncertainty in cost and outcome estimates. The proportion of rehabilitated cases was similar across the three groups. From a societal perspective compared with the non-intervention group, the DAART intervention appeared to be the most efficient option with an incremental cost of $1344 per QALY gained, whereas the incremental cost per QALY gained from the STRETCH program was $14,478. Both DAART and STRETCH are low-cost, low-technological health promoting programs representing excellent public health investments.