Measuring and valuing productivity costs in economic

evaluation studies

Marc Koopmanschap,

Erasmus Medical Centre Rotterdam

The Netherlands

History of productivity costs (I)

1990’s debate on human capital method versus

friction cost method versus US panel Qaly method

(JHE 1995/1997, HE 1997)

(nowadays consensus that US panel method is invalid)

Focus in this debate on productivity costs in the

longer run

Focus on valuation of productivity costs, not so

much on the measurement

History of productivity costs (II)

Less debated issue: how to measure productivity

costs in a valid way

Underresearched area: productivity costs in the

short run

Underresearched area: productivity loss without

absence/efficiency losses/presenteeism

Consensus on productivity costs?

Productivity costs are still quite controversial in

economic evaluation of health care (regarding

relevance, measurement and valuation)

Hence recommendations for productivity costs in

(pharmaco)economic guidelines are quite diverse

among countries

Better guidance needed for researchers and policy

makers

Productivity costs in EE

Relevant if societal perspective used (e.g. drug

reimbursement in Netherlands).

Also relevant from perspective of employer

To be applied in worker settings (evaluation of

occupational health interventions) and in patient

settings (evaluation of health care programs)

Crucial information for estimating PC

1.    General information (health, demography, income)

2.      Profession, working situation, functional limitations

3.      Absence from work

4.      Compensation mechanisms (absence from work)

5.      Productivity costs at work (efficiency loss)

6.      Productivity costs at the organisational level

Relevant information:

7.     Administrative and management costs

8. Hindrance at paid work, quality of life

9. Hindrance at unpaid work, substitution

General information and working situation

General information: self evident.

Working situation:

experienced functional limitations at work as a

consequence of health problems

work-related factors: physical and psychosocial factors at

work (“mental capital”)

characteristics of the production system (team work, time

sensitivity)

These elements together might determine productivity

costs due to absence and presenteeism

Absence from work

A retrospective question about absence from work

during the last 2-3 months, incorporating several

possible absence episodes showed a higher

response than a day to day question.

This question delivers enough information for

calculating productivity costs.

Compensation

Compensation encompasses all actions that intend to limit the loss in production/prod costs due to the sick worker’s absence. For example

Colleagues take over work (during normal hours or during overtime)

Extra employees are hired

Sick employees take over after absence during normal hours or during overtime

(Part of) the lost work is not compensated for

These compensation mechanisms may limit productivity costs of absence from work.

Results compensation up till 2006

Jacob–Tacken et al. 2005 confirmed findings Severens: compensation mechanisms may reduce productivity costs substantially: to 40-50% of the value of production.

The occurrence of specific compensation mechanisms depends on the duration of absence

Type of work seems to be explanatory factor

However: Nicholson claims that a workers absence may sometimes induce more productivity costs (team production -> colleagues less productive)

Results efficiency loss (I)

Efficiency losses are often substantial: about two

hours per day for low back pain patients

For low back pain: absence from work and

efficiency loss are positively related

We compared QQ instrument (Brouwer: Vas for

quantity of work and for Quality of work) and HLQ

(van Roijen: nr of hours to make up for loss)

Construct validity about the same

PRODISQ Module E Productiviteit tijdens werk

E1. Op de schaal hieronder kunt u omcirkelen hoeveel werk u tijdens uw laatste werkdag hebt gedaan in uw normale werktijd ten opzichte van een normale werkdag. Een 0 betekent dat u niets kon doen en een 10 dat u evenveel als normaal kon doen.

 Niets 0 1 2 3 4 5 6 7 8 9 10 Evenveel als normaal

E2. Op de schaal hieronder kunt u omcirkelen hoe de kwaliteit was van het werk dat u tijdens uw laatste werkdag hebt gedaan ten opzichte van normaal. Een 0 betekent dat uw werk van zeer slechte kwaliteit was en een 10 dat u dezelfde kwaliteit heeft geleverd als normaal.

Niets 0 1 2 3 4 5 6 7 8 9 10 Evenveel als normaal

Results efficiency loss (II)

QQ produced less missings than HLQ

HLQ often showed no production loss, although

patients were hindered in performing work

HLQ may be not applicable for work where making

up for lost work is not possible

Overall QQ performed slightly better.

Self reported and actual productivity had a

moderate correlation (r=0.48), ceiling effect QQ or

limited variance in actual production?

Results costs organisation (industrial sector)

Structured interview with managers

Compensation for absence often during normal

hours by colleagues

Managers (of 9 industrial companies): more than

70% of efficiency loss is work related

By contrast: workers stated that 64% of

productivity costs were related to health problems

Conclusions specific for industrial companies??

More research needed (in other sectors) !!

Results administrative/management costs

Costs of management and administration per case

of absence (NL):

On average 90 minutes

45 minutes in case of short term absence (1 wk)

2 hours for 1-6 weeks absence

Almost 6 hours for long term absence (> 6

weeks)

Results productivity and quality of life

Low back pain (baseline, n=483, EQ5D)

No absence or efficiency loss: avg Qol= 0.7

Absence: avg Qol 0.65 or lower

Absence 14 days: avg Qol= 0.48

In case of efficiency loss:

If loss 50-75% of working time: qol = 0.61

If loss > 75% of working time: qol = 0.51

Recommendations for further research

More insight needed in relationship between actual and self reported productivity

Perspective employers vs employees outside industry

Relationship between quantity and quality of production (VAS scales QQ)

Interplay of health, functional limitations, physical/psychological burden, production system on productivity costs

Sample size calculation in interventions:

Often primary outcome health indicator, but…

Absence and presenteeism tend to have skewed distributions with a higher variance, so in general more power needed to demonstrate significant difference in productivity costs between two interventions.

PRODISQ references

Website: www.imta.nl (now under reconstruction) Modular instruments and manual, free of charge

Currently busy merging HLQ and PRODISQ

Jacob-Tacken KHM, Koopmanschap MA ea.Correcting for compensating mechanisms related to productivity costs in economic evaluations of health care programs.Health Econ 2005;14:435-43. 

Koopmanschap M, Burdorf A, Jacob K et al. Measuring productivity changes in economic evaluation : setting the research agenda. Pharmacoeconomics. 2005;23(1):47-54

Lamers LM, et al. The relationship between productivity and health related quality of life: an empirical

exploration in persons with low back pain. Quality of life Research 2005; 14: 805-813.

Meerding WJ, IJzelenberg W, Koopmanschap MA et al. Health problems lead to considerable productivity loss among workers with high physical load jobs. Journal of Clinical Epidemiology. 2005; 58:517-23.

Koopmanschap MA. PRODISQ: a modular questionnaire on productivity and disease for economic evaluation studies. Expert Rev Pharmacoeconomics Outcomes Res. 2005;5(1):23-28.