Valuing productivity costs using the friction‐cost approach: Estimating friction‐period estimates by occupational classifications for the UK

Kigozi, Jesse; Jowett, Sue; Lewis, Martyn; Barton, Pelham; Coast, Joanna

doi:10.1002/hec.3513

Cited by 23 publications

(14 citation statements)

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“…However, the results of monetary amounts are disease specific, as seen when comparing the productivity costs in different stroke subtypes. It is known that future capacity to work is associated with stroke severity and clinical recovery after a stroke [ 16 ]. Nevertheless, also pre-stroke demographic factors affect the probability to return to work after a stroke [ 53 ].…”

Section: Discussionmentioning

confidence: 99%

“…In both approaches, the conventional use of population mean wage might lead to overestimation of productivity costs if the disease burden were concentrated on lower socioeconomical classes. Previous studies of FCM have encouraged the use of different friction periods according to occupational classes since some occupations are less easy to replace [ 5 , 13 , 15 , 16 ]. However, the friction period does not only depend on the type of occupation, but also the local employment circumstances [ 6 ].…”

Section: Introductionmentioning

confidence: 99%

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Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study

et al. 2021

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Background Productivity costs result from loss of paid and unpaid work and replacements due to morbidity and mortality. They are usually assessed in health economic evaluations with human capital method (HCM) or friction cost method (FCM). The methodology for estimating lost productivity is an area of considerable debate. Objective To compare traditional and adjusted HCM and FCM productivity cost estimates among young stroke patients. Methods The Northern Finland Birth Cohort 1966 was followed until the age of 50 to identify all 339 stroke patients whose productivity costs were estimated with traditional, occupation-specific and adjusted HCM and FCM models by using detailed, national register-based data on care, disability, mortality, education, taxation and labour market. Results Compared to traditional HCM, taking into account occupational class, national unemployment rate, disability-free life expectancy and decline in work ability, the productivity cost estimate decreased by a third, from €255,960 to €166,050. When traditional FCM was adjusted for occupational class and national unemployment rate, the estimate more than doubled from €3,040 to €7,020. HCM was more sensitive to adjustments for discount rate and wage growth rate than FCM. Conclusions This study highlights the importance of adjustments of HCM and FCM. Routine register-based data can be used for accurate productivity cost estimates of health shocks.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study

et al. 2021

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“…In addition, studies using the HCA could additionally calculate productivity costs through the FCA, since -especially in the case of absences longer than the friction period -the HCA might reflect only the "potential" costs, and overestimate the "actual" losses (14). To make this possible, estimates for friction periods should be made in other countries since up to now they have only been calculated for the Netherlands and the UK (16,145). Not all these quality improvements of productivity estimation require additional time, data or resource investments: detailed reporting, adjustments to inflation or discounting, relaxing assumptions in sensitivity analyses, making use of job-specific wage multipliers, or using (a range of) elasticity values as proposed by Koopmanschap et al can all greatly increase the quality of cost-effectiveness research in OHS, and could easily be added (eg, in sensitivity analyses next to the main analysis).…”

Section: Discussionmentioning

confidence: 99%

Productivity estimation in economic evaluations of occupational health and safety interventions: a systematic review

Steel¹,

Godderis²,

Luyten³

2018

Scand J Work Environ Health

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Productivity estimation is a key factor in demonstrating the cost-effectiveness of occupational health and safety (OHS). However, the studies analysed in this systematic review lack standardization, exclude important factors, and the precision, validity and reliability of estimates widely differs. Researchers should be aware of how the method and precision of estimating productivity affects results, and, ultimately, the economic attractiveness of OHS. Key terms: absenteeism; cost-effectiveness; economic evaluation; friction cost; human capital; indirect cost; measurement; methodology; occupational health; occupational health and safety; presenteeism; productivity estimation; review; systematic review; valuation; work This article in PubMed: www.ncbi.nlm.nih.gov/pubmed/29405241 Additional materialPlease note that there is additional material available belonging to this article on the Scandinavian Journal of Work, Environment & Health -website. Scand J Work Environ Health -online first 1Review Productivity estimation in economic evaluations of occupational health and safety interventions: a systematic review by Jonas Steel, MSc, 1 Lode Godderis, MD,2,3 Jeroen Luyten, PhD 1,4 Steel J, Godderis L, Luyten J. Productivity estimation in economic evaluations of occupational health and safety interventions: a systematic review. Scand J Work Environ Health -online first. doi:10.5271/sjweh.3715Objectives Occupational health and safety (OHS) interventions' effect on worker productivity is an essential, but complex element of the value of these programs. The trustworthiness of economic evaluation studies, aiming to provide guidance to decision-makers in the field of OHS, depends at least partly on how accurately productivity changes are measured. We aim to review the methods used to estimate productivity changes in recently published economic evaluations of OHS interventions. MethodsWe performed systematic searches of economic evaluations of OHS programs published between 2007 and 2017 and reviewed these studies' methods to quantify the programs' impact on worker productivity ResultsOf the 90 identified studies, 44 used a human capital approach, 17 a friction cost approach, 13 stated productivity in natural units (eg, a cost-per-absence-day-avoided), 7 made use of compensation expenses, 4 used output-based methods, 4 an "ad hoc" approach, and 1 study did not state its method. Different approaches were combined in 19 studies. Within these methods, we observed a wide diversity in their precise implementation, especially regarding the measurement and valuation of absenteeism and presenteeism.Conclusions Productivity is a key element of the economic attractiveness of investing in OHS. Economic evaluation studies of OHS would benefit from more methodological standardization in their approach to quantifying productivity change. Future research should better account for the methodological uncertainty that occurs in estimating it in order to demonstrate the impact that particular choices and approaches to productivity estimation ca...

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“…Published studies are generally based on a single method for calculation of lost productivity, usually the HC approach. When using the FC approach, authors use friction periods initially estimated by Koopmanschap The duration of the friction period must also be stratified according to job category, as the recruitment process is longer for managers than for employees [31]. In the absence of guidelines, we preferred to use both approaches and used French grey literature sources to estimate the duration of friction periods according to Koopmanschap's method.…”

Section: Discussionmentioning

confidence: 99%

Absenteeism and indirect costs during the year following the diagnosis of an operable breast cancer

Ferrier

Thébaut

Lévy

et al. 2019

Preprint

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Introduction: The consequences of disease on work for individual patients as well as the consequences of absenteeism from work are subjects of interest for decision-makers.Methods: We analyzed duration of absenteeism and related indirect costs for patients with a paid job during the year following diagnosis of early-stage breast cancer in the prospective OPTISOINS01 cohort. A human capital and friction costs approaches were considered for evaluation of lost working days. For this analysis, the friction period was estimated from recent French data. Statistical analysis included simple and multiple linear regression to identify determinants of absenteeism and indirect costs.Results: 93% of patients had at least one period of sick leave, with an average of 2 periods of sick leave and a mean total duration of 186 days. 24% of patients returned to work part-time after an average sick leave of 114 days (i.e. 41 LWD). Estimated indirect costs were €22,722.00 and €7,724.00 per patient, for the human capital and friction cost approaches, respectively. In the multiple linear regression model, factors associated with absenteeism were: invasive tumor (p=.043), mastectomy (p=.038), redo surgery (p=.002), chemotherapy (p=.027), being a manager (p=.025) or a craftsman (p=.005).Conclusion: Breast cancer is associated with long periods of absenteeism during the year following diagnosis, but almost all patients were able to return to work. Major differences in the results were observed between the friction cost and human capital approaches, highlighting the importance of considering both approaches in such studies.

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Valuing productivity costs using the friction‐cost approach: Estimating friction‐period estimates by occupational classifications for the UK

Cited by 23 publications

References 17 publications

Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study

Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study

Productivity estimation in economic evaluations of occupational health and safety interventions: a systematic review

Absenteeism and indirect costs during the year following the diagnosis of an operable breast cancer

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