Estimating the Costs of an Intervention: An Illustration using the Incredible Years Program

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Estimating the Costs of an Intervention An
Illustration using the Incredible Years Program

• E. Michael Foster Penn State
• Carolyn Webster-Stratton U. of WA
• Jamila Reid U. of WA
• June 1, 2001

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Overview

• Why Bother?
• How Economists Think about Costs
• How to Estimate the Costs of an Intervention
• The Incredible Years Program
• Illustrative Cost Estimates
• Difficult Issues

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1.Why Bother?

• Economic analysis is essential to any prevention
  study.
• Cost analysis is the foundation for economic
  analysis.

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A critical component of community-based trials,
with important policy implications, is
determination of the cost-benefit or
cost-effectiveness of preventive interventions. .
. . Too little attention, however, has been
focused on conducting cost-benefit or
cost-effectiveness analyses that can reliably
demonstrate whether prevention interventions
indeed save money and improve health. Such
information is of great importance to policy
makers. Cost-benefit or cost-effectiveness
analyses need to become an integral part of
NIMH-supported prevention effectiveness
trials. NIMH Plan for Prevention Research
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2. How do economists think about costs?
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2. How do economists think about costs?

• Four principles
• Costs depend on the perspective from which they
  are assessed.
• Costs are measured in terms of their opportunity
  costs.

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2. How do economists think about costs? (cont.)

• Marginal costs are the costs that matter.
• Some costs are indirect or morbidity-related.

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What is the cost to society as a whole, not
simply to the treatment system, of leaving mental
illness untreated. National Advisory Mental
Health Council's Clinical Treatment and Services
Research Workgroup, 1999
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3. How to estimate the direct costs of an
intervention

• Identify resources used
• Measure resource used
• Value the resources used in dollar terms

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Step 1 Identify resources used

• Explicit costs
• Implicit costs

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Step 2 Measure resources used
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Step 3 Valuing the resources in dollar terms

• Calculating unit costs
• Explicit costs
• Implicit costs
• Donated space
• Care giver time

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4. The Incredible Years Program
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4. The Incredible Years Program

• Empirically validated, multi-component training
  program
• Targeted to families with children ages 3-8 with
  conduct problems
• Combines parent training, teacher training and
  child training

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Parent Training

• Group discussion of videotapes followup
  activities
• Teaches age-appropriate skills
• interactive play and reinforcement techniques for
  younger children
• Logical consequences, monitoring, etc. for older
  children
• Supplements address family risk factors and
  childs academic competence

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Teacher Training

• Group discussion of videotapes followup
  activities
• Teaches classroom management

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Child Training Dina Dino and Her Pals

• Videotaped vignettes and puppets used to
  stimulate discussion among children
• Teachers social skills and cognitive strategies
• Can be used as classroom-based prevention or
  pull out treatment for small groups

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5. Illustrative Cost Estimates What Does the IY
Program Cost?

• Costs as disseminated under reasonable
  circumstances
• Agency would run program in two classes with 14
  children
• Agency would need parent group leader (who would
  have to be trained)
• Group and classroom sizes consistent with
  experience

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5.Illustrative Cost Estimates (cont)

• Included appropriate materials
• Other costs included (such as meals and sitters)
• Included parent and teacher time
• Reasonable assumptions
• number of parent groups a trainer leads during
  tenure
• Salaries
• Value of parental time (?)

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5.Illustrative Cost Estimates (cont)

• Excludes costs of development (e.g., tapes)
• Excludes space costs
• Excludes opportunity costs for classroom time
• Excludes the value on childrens time

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Bottom Line
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Breakdown of Costs
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(No Transcript)
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6. Difficult issues

• Measuring the value of parental time
• Costs of an intervention as disseminated
• Distinguishing research costs
• Measuring morbidity-related costs
• Projecting future costs and benefits

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Further Reading

• Foster, E. Michael, and E. Wayne Holden. 
  "Benefit-Cost Analyses of a Title IV-E Child
  Welfare Demonstration Understanding the Resource
  Implications of the Foster Care Waivers". 
  Forthcoming in Children and Youth Services
  Review.
• Foster, E. Michael, Kenneth A. Dodge, and Damon
  Jones.  "Issues in the Economic Evaluation of
  Prevention Programs."  Under review at Applied
  Developmental Science.
• www.personal.psu.edu/emf10/

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Further Reading

• Greenberg, David H. Ute Appenzeller. 1998.
  Cost Analysis Step by Step. New York MDRC.
• Yates, Brian T. 1999. Measuring and Improving
  Cost, Cost-Effectiveness, and Cost-Benefit for
  Substance Abuse Treatment Programs A Manual.
  Bethesda, MD U.S. DHHS.