Using Top-Down and Bottom-Up Costing Approaches in LMICs
2016
In the absence of routine cost data collection, estimating the incremental costs of scaling-up novel technologies in low-income and middle-income countries is a methodologically challenging and substantial empirical undertaking. Using the example of costing the scale-up of Xpert Mycobacterium tuberculosis (MTB)/resistance to riframpicin (RIF) in South Africa, the authors estimate costs, by applying two distinct approaches of bottom-up and top-down costing, together with an assessment of processes and capacity.
The unit costs measured using the different methods of bottom-up and top-down costing, respectively, were $US16.9 and $US33.5 for Xpert MTB/RIF, and $US6.3 and $US8.5 for microscopy. The incremental cost of Xpert MTB/RIF was estimated to be between $US14.7 and $US17.7. While the average cost of Xpert MTB/RIF was higher than previous studies using standard methods, the incremental cost of Xpert MTB/RIF was found to be lower.
The analysis concludes that cost estimates are highly dependent on the method used. An approach, which clearly identifies resource-use data collected from a bottom-up or top-down perspective, together with capacity measurement, is recommended as a pragmatic approach to capture true incremental cost where routine cost data are scarce.
Using Top-Down and Bottom-Up Costing Approaches in LMICs
Source:
Cunnama L, Sinanovic E, Ramma L et al. Using Top-Down and Bottom-Up Costing Approaches in LMICs: The Case for Using Both to Assess the Incremental Costs of New Technologies at Scale. Health Economics 2016; 25: 53–66. https://doi.org/10.1002/hec.3295