3A.6 Health care resource use and costs

Page last updated: September 2016

Information Request

  • Identify and define the direct health care resource items for which there would be a change in use if the proposed medicine is substituted for the main comparator (Subsection 3A.6.1)

3A.6.1 Health care resource use and costs

For within-trial analyses, identify the health care resource items for which there is a change in use associated with substituting the proposed medicine for the main comparator.

For model-based evaluations, estimate cost weights representing the resources used within a relevant time period (eg a model cycle for a state transition model) for every health state. Alternative health state costs may be defined for patients receiving the intervention and the comparator – for example, to account for differences in adverse event rates.

Where a special pricing arrangement is proposed, define the costs with and without the proposed arrangement. Describe the details of any special pricing arrangement in Subsection 1.4.

See the Manual of resource items and their associated costs for additional detail about this section.

Health care resource items

Where appropriate, consider the following resource items:

  • medicines (direct costs of treatment and medicines used to treat adverse reactions)
  • medical services, including procedures
  • hospital services
  • diagnostic and investigational services
  • community-based services
  • any other direct medical costs.

For each resource item, define the natural units and quantify the number of natural units provided to patients in each treatment group, or to patients remaining in a health state for a relevant time period (eg number of packs of medicine dispensed, number of general practitioner consultations, number of episodes of hospital admission).

Use of the intervention and comparator therapies is generally derived from the clinical studies reported in Section 2. However, in some studies with incomplete follow-up, this may represent a truncated mean and require adjustment. Justify and explain any calculation of the cost per patient per year, as necessary, for therapies used episodically.

The amount of a medicine or other resource provided (eg dispensed) is the relevant economic measure rather than the amount of resource consumed. Incorporate wastage in the model, because it is a consumption and therefore an incurred cost.

For estimates of health care resource items, describe and justify their basis, and specify the information source. Consider the applicability of the data to the modelled setting. Measure prospectively the pattern of provision of health care resources in the course of a clinical study by:

  • retrospectively reviewing relevant records or through linking data with claims data
  • administering a questionnaire or survey
  • using diaries.

Distinguish between data on resource use that are directly derived from the primary evidence, and extrapolations or modelling of resource use beyond that available from the primary evidence. Justify any choice to use data that are not consistent with data from the primary evidence, particularly where this has an important impact on incremental costs, as revealed in the sensitivity analyses.

Exclude types of health care resources that would not have a material influence on the conclusion of the economic evaluation, if appropriate. This may be because the cost is very small, or because the cost largely cancels out between the intervention and the comparator(s) (eg the costs of dying, if all individuals in the model would die). If resources are excluded for this purpose, state this and justify their exclusion, and outline how the exclusion affects the incremental cost of the intervention.

Allocation of prices (unit costs) to resources

Present all unit prices and costs in Australian dollars with a consistent year of analysis (which should be stated and be as close as possible to the submission date).

Section 3 adopts a broad perspective for the valuation of health care resources, so include all contributions to the costs of health care resources – including those paid for by patients, governments, health insurance agencies and any other part of society – in the economic evaluation. Where available, use the source of costs recommended by the Manual of resource items and their associated costs. If there are important reasons to use different unit prices from those recommended, present these as a sensitivity analysis, justify each, and describe its source or generation. Ensure that any different unit price is consistent with the broad perspective of including all contributions to the costs of health care resources.

Detail all alternative costs, their sources and any assumptions about them. If multiple estimates are identified, justify the estimate used in the base case and present alternative plausible estimates in sensitivity analyses.

If cost conversion is required from non-Australian prices, and is done using a prevailing exchange rate, justify the price comparability between countries.

If using historical estimates of costs, detail the information sources and the methods used to estimate them. Justify the use of the historical cost source as relevant and the best estimate available. Use the most relevant Australian price index (eg total health and health industry–specific price indexes published by the Australian Institute of Health and Welfare) to adjust for inflation and estimate current prices.

Value future costs at current prices (ie do not allow for future inflation in the calculations), consistent with using constant prices in the economic evaluation.

Presentation of resource use and cost information

A format for summarising the minimum dataset of health care resource items and their associated unit costs relevant to the economic evaluation is suggested in Table 3A.6.1. These are samples for each identified category, which are consistent with the Manual of resource items and their associated costs, but are not comprehensive of all types of health care resource items, natural units of measurement or sources of unit costs.

Present all steps taken to calculate costs in the economic evaluation in a way that allows the calculations to be independently verified.

If a complete presentation of costs is very large, present the calculations in an accompanying technical document. Cross-reference between the calculations and the main body of the submission, and include an electronic version of the detailed calculations.

Table 3A.6.1 Indicative list of health care resource items, unit costs and usage included in the economic evaluation

Type of resource item

Subtype of resource item

Natural unit of measurement

Unit cost (AUD)

Source of unit cost

Usage for the proposed medicine

Usage for the comparator


Proposed medicine

Quantity of medicine dispensed


Proposed dispensed price

[add usage]

[add usage]


Quantity of medicine dispensed


PBS dispensed price for item code according to current PBS, if PBS-listed medicine

[add usage]

[add usage]

Medical services

Type of medical or allied health practitioner attendance or diagnostic / investigational service

Service rendered


MBS schedule fee for item code according to current MBS, if MBS-listed service

[add usage]

[add usage]

Hospital services

Hospital admission

Episode for identified AR-DRG


Average cost weight for DRG item code according to current AR-DRG Public Sector Estimated Cost Weights

[add usage]

[add usage]

Residential care

ACFI category



Daily ACFI subsidy rate plus basic daily care fee

[add usage]

[add usage]

ACFI = Aged Care Funding Instrument; AR-DRG = Australian Refined Diagnosis Related Group; AUD = Australian dollars; MBS = Medicare Benefits Schedule; PBS = Pharmaceutical Benefits Scheme