The societal cost of erythrocyte concentrate transfusion (in orthopaedic surgery and in anaemic oncology patients)

22 august 2019

In order to compare the costs of an anaemia treatment with erythrocyte concentrate to the treatment with IV iron, Hict was asked to assess the true acquisition cost of erythrocyte concentrate in different European health care systems by using a standardised methodology.

Expertise: Cost Impact Study

Project Highlights

  • Customer: Vifor Pharma
  • Main Goal: Development of a time-driven activity-based costing model for assessing the societal acquisition cost of erythrocyte concentrate in Europe
  • Main Results: Complete and documented insight into the production costs of EC, and an economic decision tool to support correct price setting and to support public health decision makers in evaluating alternative therapies

Approach

The cost of blood products is regularly underestimated since the acquisition cost does not represent the total cost for obtaining and producing blood components. Historical accounting attempts to assess the cost of erythrocyte concentrate have varied in scope, perspective and methodology, leading to incomparable and criticised conclusions.

Hict developed a generic model for the identification and allocation of all costs involved in obtaining and transfusing erythrocyte concentrate (the true cost production cost of EC). A management accounting approach, based on the Time Driven Activity Based Costing (TDABC) methodology, was chosen to develop the cost model because of its ability to capture a wide spectrum of the indirect costs and also the cost for unused capacity .

Inputs from 3 Swedish and 3 Spanish blood centres were consolidated to develop a country specific model for Sweden and Spain., resulting in a representative cost for both countries.

The following steps were carried out for the development of the generic model and the hospital/country specific models.

  • literature study
  • data collection on-site (interviews, observations, consulting databases & general ledgers, time measurements)
  • process and activity analyses
  • resource identification
  • cost allocation

The methodology of this cost analysis is described in a poster presentation, as are the results of for the Spanish hospitals.

VIFOR

The "true" costs of blood: The average unit production cost of an erythrocyte concentrate in Spain from a societal perspective

See Poster 1
VIFOR

Development of a time-driven activity-based costing model for assessing the societal acquisition cost of erythrocyte concentrate in Europe

See Poster 2

Results

  • The model provides a complete and documented insight into the production costs of EC, capturing the costs for used and unused capacity
  • Knowledge of the right costs allows a correct price setting of and a comparison with alternatives (in case of sales in hospitals and reimbursement dossiers)
  • This model can be used as an economic decision tool to support public health decision makers in evaluating alternative therapies
  • The results of this cost analysis is beneficial for institutions seeking adequate financing of erythrocyte concentrate
  • A transparent understanding of how costs arise is the basis for process optimisation in hospitals