CADTH 2015 Symposium

1. CADTH Guidance Document
for the Costing Process – 2nd
edition
CADTH SYMPOSIUM
ANTHONY BUDDEN
13 APRIL 2015
SASKATOON, SK

2. Research Team
• Philip Jacobs, IHE
• Karen Lee, CADTH
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Acknowledgements
• Researchers at CIHI
• Peer review from health economic/health services
researchers

3. CADTH Cost Guidance document
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• Published in 1996
• Useful resource for
researchers
• Provides guidance on:
o determining, measuring
and valuing costs and
resources for economic
evaluations
o Information sources
o Reporting formats

4. Purpose of update to Cost Guidance
document
• Evolution of cost information
• Provide researchers with description of different costing
approaches
• Encourage increased uniformity and transparency in costing
methods and information
• Highlight key sources of information
NOT
• To duplicate information available elsewhere
• Canadian costing manual (Comprehensive list of sources)
• Definitive hierarchy of sources
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5. Approach to update
• Collaboration between CADTH and IHE
• Working closely with researchers (CIHI, peer reviewers)
• Identifying new areas and need for revisions since 1996
o Literature review of economic evaluations in Canada
o Scan of cost sources in Canada
o Discussion with researchers in various cost fields in Canada
o CDR experience
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6. Key changes
• Structure of the document
• Costing categories and content
• Inclusion of examples
• More information in areas where developments have
occurred (hospital costing)
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7. Perspective
• Based on the decision problem
• Perspective will
o Determine the types of costs to consider
o Which data sources to use
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8. Measurement and resource valuation
– key sections for discussion
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• Pharmaceuticals (Prescription/ OTC drugs, Drug delivery
devices/ monitoring tools, Drug administration)
• Physician Services
• Hospital Services (Inpatient services/ Outpatient
services)
• Diagnostic and Investigational Services (Radiology,
Laboratory tests and assays, Medical devices)
• Non-Physician Professional Services (physio, nursing)
• Community Based Services (Residential care, Home
care, Ambulance services)
• Other Information (personal and societal cost information
and public health services)

9. Hospital services
• Greater amount of information available
• Hospital services refer to services produced within a
hospital on an inpatient or outpatient basis, and include
nursing and other professional services, lab and diagnostic
services, as well as dispensing and administration of drugs,
housekeeping and nutrition
o Physician services typically paid and costed separately
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10. Hospital services – inpatient care
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Inpatient hospital care:
Levels of costing
Per
diem
costing
Case mix costing (basic
CMG+ and refined CMG+)
Patient costing on a case by case basis
Simplistic
In depth

11. Inpatient care – per diem costing
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Per
diem
costing
• Simplistic approach
• Cost per inpatient day x hospital LOS
• Uniform cost for inpatient day
• Data sources:
o Expected LOS for cases can be obtained from the CIHI discharge
abstract database (DAD)
o Cost per day obtained from CIHI

12. Inpatient care – case mix costing
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Case mix costing (basic
CMG+ and refined CMG+)
• CIHI collects inpatient discharge data from hospitals across
the country on a common discharge abstract
• Data captured include:
o Patient age
o Sex
o Diagnoses (ICD-10-CA)
o Intervention/s
• Reports collated by CIHI in the DAD
o Type of diagnosis (system of
ranking)
o MRDx identifies diagnosis
responsible for longest portion
of stay

13. Inpatient care – case mix costing
• Important concepts in case mix costing:
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Concept Brief description
Case Mix Group (CMG) Similar cases grouped to determine average cost of case
Resource Intensity Weight
(RIW)
Standardised estimate of expected resource use
Cost of a standard hospital
stay (CSHS; formerly CPWC)
Inpatient costs for unit (hospital or province) are
summed and divided by summed RIW for all cases

14. Inpatient care – case mix costing
• 528 CMGs
• RIWs are produced for each CMG
• The average case value = 1.00
• RIW values for each CMG are subdivided by age and case
type (typical/atypical)
• Base CMG+: cases measured unadjusted for comorbidities
or additional comorbidities
• Refined CMG+: includes base values adjusted for
comorbidities and additional interventions
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15. Inpatient care – case mix costing
• Data sources:
o RIWs obtained from CIHI DAD
o CSHS obtained from CIHI Canadian MIS Database
• Other data sources – case mix based on pt cost estimates:
o Alberta: IHDA, Ontario: OCCI
• Reported information differs
• Example: From a government payer perspective, a
researcher in Ontario wants to estimate the hospital cost of
a unilateral knee replacement for a 50 y.o.:
o Base RIW & weighted average unadjusted CSHS for Ontario in
2012 (latest), cost is $7,978.
o IHDA, relevant year (2012/13), desired measure, and all cases; cost
is $10,263. Includes atypical patients, hence the higher cost
o Phys fees/ rehab costs not included14

16. Inpatient care – patient level costing
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Patient costing on a case by case basis
• Patient costing on a case by case basis are generated from
CIHIs CMDB
• Only available for certain hospitals within 4 provinces:
Alberta, Ontario, BC and Nova Scotia.
• They may be directly obtained from provincial health
departments

17. Inpatient care – costing summary
Approach Strengths Weaknesses
Applying a per
diem cost to length
of stay
Provides a consistent
measure over a
historical period
Does not distinguish between (higher cost)
early days and later days of a stay
Does not address differences in resource
use between different types of cases
Case mix Addresses differences
in resource use
between different
types of cases
Does not capture historical differences in
resource use per case
RIWs are hot hospital specific; based on
data for a small number of hospitals
Person level Allows for more precise
comparison between
identified cases within
a single diagnostic
group
Limited availability of data
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18. Outpatient (ambulatory) care
• Non-admitted patient hospital visits which include diagnostic
services, clinic care, outpatient surgery and ED visits
• Information captured within NACRS (overseen by CIHI)
which feeds into CIHI’s CACS for outpatient care
• Note: Small number of hospitals in BC, ON, AB collect costs
• CIHI have estimates RIWs for CACS groups
• Care often includes physician intervention or consultation
(counted separately from hospital facility component)
• Provincial outpatient data for Alberta and Ontario is made
available on their patient cost tools: the IHDA and OCCI
respectively
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19. Community services – residential
care
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RAI-MDS 2.0
RUG
(currently
RUG-III)
Data collected
from residents
on cognition,
disability and
care received
• Residential care is the joint provision of longer term
accommodation and health care services in a facility

20. Residential care – RUGS
• Each RUG-III group is also assigned a Case Mix Index
(CMI) that provides indication of average daily resource use
for individuals in a particular group (available from CIHI)
• Data are summarised into quarterly RUG Weighted Patient
Days (RWPD) reports which are available to certain Long-
Term Care homes and facilities through CIHI’s eReporting
portal, which is not currently accessible to the public
• Unit costs per RUG-III group are publicly available through
Ontario’s Health System Performance Research Network –
paper by Wodchis et al. 2013
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21. Home care & ambulance services
• All provinces provide professional home care, but cost and
utilization data are not easily obtainable
• Ontario’s HSPRN paper (Wodchis et al. 2013) estimated
fees paid to professional home care visitors for a wide
range of services by the government in Ontario
• Cost or fee directly obtained from province is suggested
more appropriate
• The full cost of ambulance services throughout Canada is
not well reported
• Full costs may be obtained from provincial or local
ambulance services such as the Toronto EMS annual report
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22. Challenges
• Common terminology/language
• Lack of publicly available information (e.g. RUGS,
Ambulance services)
• Jurisdiction variation (e.g. pharmaceuticals, physician)
• Lack of agreement over accepted/appropriate methods (e.g.
indirect costs)
• Difficult to have overarching guidance in some cases
• Requirement for further research, greater public access to
information
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23. Next Steps
• Finalize document: April 2015
• Stakeholder feedback: May 2015
• Posting of final document: Summer 2015
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