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.