Options and Consequences

Aims: Our goals are 3-fold: (1) to review the leading options for assigning resource coefficients to health services utilization; (2) to discuss the relative advantages of each option; and (3) to provide examples where the research question had marked implications for the choice of which resource measure to employ. Methods: Three approaches have been used to establish relative resource weights in health services research: (a) direct estimation of production costs through microcosting or step down allocation methods; (b) macrocosting/regression analysis; and (c) standardized resource assignment. We describe each of these methods and provide examples of how the study question drove the choice of resource-use measure. Findings: All empirical resource-intensity weighting systems contain distortions that limit their universal application. Hence, users must select the weighting system that matches the needs of their specific analysis. All systems require significant data resources and data processing. However, inattention to the distortions contained in a complex resource weighting system may undermine the validity and generalizability of an economic evaluation. Conclusions: Direct estimation of production costs are useful for empirical analyses, but they contain distortions that undermine optimal resource allocation decisions. Researchers must ensure that the data being used meets both the study design and the question being addressed. They also should ensure that the choice of resource measure is the best fit for the analysis. Implications for Research and Policy: Researchers should consider which of the available measures is the most appropriate for the question being addressed rather than take “cost ” or utilization as a variable over which they have no control.