The existing outsourcing literature has generally overlooked the cost differential and contract negotiations between manufacturers and suppliers (by assuming identical cost structures and adopting ...the Stackelberg framework). One fundamental question yet to be addressed is whether upstream suppliers' cost efficiency is always beneficial to downstream manufacturers in the presence of
competition
and
negotiations
. In other words, does low cost outsourcing always lead to a win-win outcome? To answer this question, we adopt a multiunit bilateral bargaining framework to investigate competing manufacturers' sourcing decisions. We analyze two supply chain structures:
one-to-one
channels, in which each manufacturer may outsource to an exclusive supplier; and
one-to-two
channels, in which each manufacturer may outsource to a common supplier. We show that, under both structures, low cost outsourcing may lead to a win-lose outcome in which the suppliers gain and the manufacturers lose. This happens because suppliers' cost advantage may backfire on competing manufacturers through two negative effects. First, a decrease of upstream cost
weakens
a manufacturer's bargaining position by reducing her disagreement payoff (i.e., her insourcing profit) because the competing manufacturer can obtain a low cost position through outsourcing. Second, in one-to-two channels, the common supplier's bargaining position is
strengthened
with a lower cost because his disagreement payoff increases (i.e., his profit from serving only one manufacturer increases). The endogeneity of disagreement payoffs in our model highlights the importance of modeling firm negotiations under competition. Moreover, we identify an interesting bargaining externality between competing manufacturers when they outsource to a common supplier. Because the supplier engages in two negotiations, his share of profit from the trade with one manufacturer affects the total surplus of the trade with the other manufacturer. Because of this externality, surprisingly, as a manufacturer's bargaining power decreases, her profit under outsourcing may increase and it may be more likely for her to outsource.
This paper was accepted by Yossi Aviv, operations management.
Cost of low back pain in Switzerland in 2005 Wieser, Simon; Horisberger, Bruno; Schmidhauser, Sara ...
The European journal of health economics,
10/2011, Volume:
12, Issue:
5
Journal Article
Peer reviewed
Open access
Low back pain (LBP) is the most prevalent health problem in Switzerland and a leading cause of reduced work performance and disability. This study estimated the total cost of LBP in Switzerland in ...2005 from a societal perspective using a bottom-up prevalence-based cost-of-illness approach. The study considers more cost categories than are typically investigated and includes the costs associated with a multitude of LBP sufferers who are not under medical care. The findings are based on a questionnaire completed by a sample of 2,507 German-speaking respondents, of whom 1,253 suffered from LBP in the last 4 weeks; 346 of them were receiving medical treatment for their LBP. Direct costs of LBP were estimated at €2.6 billion and direct medical costs at 6.1% of the total healthcare expenditure in Switzerland. Productivity losses were estimated at €4.1 billion with the human capital approach and €2.2 billion with the friction cost approach. Presenteeism was the single most prominent cost category. The total economic burden of LBP to Swiss society was between 1.6 and 2.3% of GDP.
Objective/Study Design
The objective of this systematic review was to summarize the literature evaluating the costs associated with the management of adult chronic rhinosinusitis (CRS) using ...Preferred Reporting Items for Systematic Reviews and Meta‐Analyses guidelines.
Methods
Two separate authors systematically searched eight commonly used medical databases. Included articles were categorized into seven domains: 1) overall healthcare cost (direct and indirect), 2) resource utilization, 3) medical management strategies, 4) overall procedure cost of endoscopic sinus surgery (ESS), 5) intraoperative technologies, 6) ESS litigation, and 7) CRS diagnostics. To maintain a common currency for comparison, all costs were converted to 2014 United States dollars (USD) using an inflation calculator in September 2014.
Results
Forty‐four studies were identified for inclusion. The range for overall CRS‐related healthcare costs was $6.9 to $9.9 billion 2014 USD per year. Indirect costs were estimated as $13 billion 2014 USD per year. Annual medication costs prior to ESS ranged between $1,547 and $2,700 2014 USD per patient, with a uniform reduction in costs after ESS. The overall US cost of outpatient ESS ranged from $8,200 to $10,500 2014 USD per case. The overall annual economic burden of CRS in the United States was estimated to be $22 billion 2014 USD (direct and indirect costs).
Conclusion
The results of this systematic review have demonstrated substantial direct and indirect costs associated with the management of adult CRS. Future research should continue to improve the costing data, which can be used to improve the value of care provided for this chronic inflammatory disease.
Level of Evidence
NA Laryngoscope, 125:1547–1556, 2015
Background: Hospitals will increasingly bear the costs for healthcare-acquired conditions such as infection. Our goals were to estimate the costs attributable to healthcare-acquired infection (HAI) ...and conduct a sensitivity analysis comparing analytic methods. Methods: A random sample of high-risk adults hospitalized in the year 2000 was selected. Measurements included total and variable medical costs, length of stay (LOS), HAI site, APACHE III score, antimicrobial resistance, and mortality. Medical costs were measured from the hospital perspective. Analytic methods included ordinary least squares linear regression and median quantile regression, Winsorizing, propensity score case matching, attributable LOS multiplied by mean daily cost, semi-log transformation, and generalized linear modeling. Three-state proportional hazards modeling was also used for LOS estimation. Attributable mortality was estimated using logistic regression. Results: Among 1253 patients, 159 (12.7%) developed HAI. Using different methods, attributable total costs ranged between $9310 to $21,013, variable costs were $1581 to $6824, LOS was 5.9 to 9.6 days, and attributable mortality was 6.1%. The semi-log transformation regression indicated that HAI doubles hospital cost. The totals for 159 patients were $1.48 to $3.34 million in medical cost and $5.27 million for premature death. Excess LOS totaled 844 to 1373 hospital days. Conclusions: Costs for HAI were considerable from hospital and societal perspectives. This suggests that HAI prevention expenditures would be balanced by savings in medical costs, lives saved and available hospital days that could be used by overcrowded hospitals to enhance available services. Our results obtained by applying different economic methods to a single detailed dataset may inform future cost analyses.
Background
Approximately one in ten children aged 5–15 in Britain has a conduct, hyperactivity or emotional disorder.
Methods
The British Child and Adolescent Mental Health Surveys (BCAMHS) ...identified children aged 5–15 with a psychiatric disorder, and their use of health, education and social care services. Service costs were estimated for each child and weighted to estimate the overall economic impact at national level.
Results
Additional health, social care and education costs associated with child psychiatric disorders totalled £1.47bn in 2008. The lion's share of the costs falls to frontline education and special education services.
Conclusions
There are huge costs to the public sector associated with child psychiatric disorder, particularly the education system. There is a pressing need to explore ways to reduce these costs while improving health and well‐being.
The Gravity of Knowledge Keller, Wolfgang; Yeaple, Stephen Ross
The American economic review,
06/2013, Volume:
103, Issue:
4
Journal Article
Peer reviewed
We analyze the international operations of multinational firms to measure the spatial barriers to transferring knowledge. We model firms that can transfer bits of knowledge to their foreign ...affiliates in either embodied (traded intermediates) or disembodied form (direct communication). The model shows how knowledge transfer costs can be inferred from multinationals' operations. We use firm-level data on the trade and sales of US multinationals to confirm the model's predictions. Disembodied knowledge transfer costs not only make the standard multinational firm model consistent with the fact that affiliate sales fall in distance but quantitatively accounts for much of the gravity in multinational activity.
Data on the economic burden of RSV-associated illness will inform decisions on the programmatic implementation of maternal vaccines and monoclonal antibodies. We estimated the cost of RSV-associated ...illness in fine age bands to allow more accurate cost-effectiveness models to account for a limited duration of protection conferred by short- or long-acting interventions.
We conducted a costing study at sentinel sites across South Africa to estimate out-of-pocket and indirect costs for RSV-associated mild and severe illness. We collected facility-specific costs for staffing, equipment, services, diagnostic tests, and treatment. Using case-based data we calculated a patient day equivalent (PDE) for RSV-associated hospitalizations or clinic visits; the PDE was multiplied by the number of days of care to provide a case cost to the healthcare system. We estimated the costs in 3-month age intervals in children aged < 1 year and as a single group for children aged 1-4 years. We then applied our data to a modified version of the World Health Organization tool for estimating the mean annual national cost burden, including medically and non-medically attended RSV-associated illness.
The estimated mean annual cost of RSV-associated illness in children aged < 5 years was US dollars ($)137,204,393, of which 76% ($111,742,713) were healthcare system incurred, 6% ($8,881,612) were out-of-pocket expenses and 13% ($28,225,.801) were indirect costs. Thirty-three percent ($45,652,677/$137,204,393) of the total cost in children aged < 5 years was in the < 3-month age group, of which 52% ($71,654,002/$137,204,393) were healthcare system incurred. The costs of non-medically attended cases increased with age from $3,307,218 in the < 3-month age group to $8,603,377 in the 9-11-month age group.
Among children < 5 years of age with RSV in South Africa, the highest cost burden was in the youngest infants; therefore, interventions against RSV targeting this age group are important to reduce the health and cost burden of RSV-associated illness.
Guided waves-based SHM systems are of interest in the aeronautic sector due to their lightweight, long interrogation distances, and low power consumption. In this study, a bottom-up framework for the ...estimation of the initial investment cost (COTC) and the added weight (WAW) associated with the integration of a SHM system to an aircraft is presented. The framework provides a detailed breakdown of the activities and their costs for the sensorization of a structure using a fully wired approach or the adoption of the printed diagnostic film. Additionally, the framework considers the difference between configuring the system for Manual or Remote data acquisition. Based on the case study presented on the sensorization of a regional aircraft composite fuselage, there is a trade-off between COTC and WAW for the SHM options considered. The Wired-Manual case leads to the lowest COTC with the highest WAW, while the combination of diagnostic film with a Remote system leads to the highest COTC and the lowest WAW. These estimations capture the characteristics of each system and can be integrated into cost-benefit analyses for the final selection of a particular configuration.
When healthcare interventions prolong life, people consume medical and non-medical goods during the years of life they gain. It has been argued that the costs for medical consumption should be ...included in cost-effectiveness analyses from both a healthcare and societal perspective, and the costs for non-medical consumption should additionally be included when a societal perspective is applied. Standardized estimates of these so-called future costs are available in only a few countries and the impact of inclusion of these costs is likely to differ between countries. In this paper we present and compare future costs for five European countries and estimate the impact of including these costs on the cost-effectiveness of life-prolonging interventions. As countries differ in the availability of data, we illustrate how both individual- and aggregate-level data sources can be used to construct standardized estimates of future costs. Results show a large variation in costs between countries. The medical costs for the Netherlands, Germany, and the United Kingdom are large compared to Spain and Greece. Non-medical costs are higher in Germany, Spain, and the United Kingdom than in Greece. The impact of including future costs on the ICER similarly varied between countries, ranging from €1000 to €35,000 per QALY gained. The variation between countries in impact on the ICER is largest when considering medical costs and indicate differences in both structure and level of healthcare financing in these countries. Case study analyses were performed in which we highlight the large impact of including future costs on ICER relative to willingness-to-pay thresholds.
Background: In October 2008, Centers for Medicare and Medicaid Services discontinued reimbursement for hospital-acquired pressure ulcers (HAPUs), thus placing stress on hospitals to prevent incidence ...of this costly condition. Objective: To evaluate whether prevention methods are cost-effective compared with standard care in the management of HAPUs. Research Design and Subjects: A semi-Markov model simulated the admission of patients to an acute care hospital from the time of admission through 1 year using the societal perspective. The model simulated health states that could potentially lead to an HAPU through either the practice of "prevention" or "standard care." Univariate sensitivity analyses, threshold analyses, and Bayesian multivariate probabilistic sensitivity analysis using 10,000 Monte Carlo simulations were conducted. Measures: Cost per quality-adjusted life-years (QALYs) gained for the prevention of HAPUs. Results: Prevention was cost saving and resulted in greater expected effectiveness compared with the standard care approach per hospitalization. The expected cost of prevention was $7276.35, and the expected effectiveness was 11.241 QALYs. The expected cost for standard care was $10,053.95, and the expected effectiveness was 9.342 QALYs. The multivariate probabilistic sensitivity analysis showed that prevention resulted in cost savings in 99.99% of the simulations. The threshold cost of prevention was $821.53 per day per person, whereas the cost of prevention was estimated to be $54.66 per day per person. Conclusion: This study suggests that it is more cost effective to pay for prevention of HAPUs compared with standard care. Continuous preventive care of HAPUs in acutely ill patients could potentially reduce incidence and prevalence, as well as lead to lower expenditures.
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