Page 188 - 16Neonatal Jaundice_compressed

Appendix C: Economic evaluation of testing strategies for hyperbilirubinaemia

Table C.3 TSB resources and costs
Resources Unit cost Source Notes
Clinical nurse £69.00 PSSRU (2008) 239 It is assumed that it would take
specialist (www.pssru.ac.uk/pdf/uc/uc2008/uc200 10 minutes to perform this test
8.pdf)
Venous blood test £7.00 GDG estimate One per test
Gloves £0.06 medisave.co.uk, accessed 16 July 2009 £6.27 per 100; one pair per test

Table C.4 TCB resources and costs
Resources Unit cost Source Notes
Clinical nurse £69.00 PSSRU (2008) 239 It is assumed that it would take
specialist 1 minute to perform this test
TCB meter £3,400 Manufacturer, JM-103 No consumables required
£3,600 Manufacturer, BiliChek

Calibration tips £5.50 Manufacturer, BiliChek
TSB £18.56 Marginal cost of TSB (see Table C.3) It is estimated that 25% of TCB
tests would be positive leading
to a TSB

The purchase of medical equipment, TCB meters in this case, carries an opportunity cost that
differs from operating costs such as labour and consumables in certain respects. The purchase of
TCB meters involves an upfront payment before use. However, that cost is fixed as it does not
vary with the quantity of treatment provided. The equipment can often be used over a number
of years before it needs to be replaced.
The equipment costs have two facets:
• opportunity cost – the money spent on the equipment could have been invested in some
other venture yielding positive benefits; it is calculated by applying an interest rate to the sum
invested in the equipment
• depreciation cost – the equipment has a certain lifespan and depreciates over time;
eventually, the equipment has to be replaced.
In economic evaluation, the usual practice is to annuitise the initial capital outlay over the
expected life of the equipment to give an ‘equivalent annual cost’. Calculating the equivalent
annual cost means making an allowance for the differential timing of costs, using discounting.
The formula for calculating the equivalent annual cost is given below:

K  1 S  r n
E 
 
A,nr
where:
E = equivalent annual cost
K = purchase price of equipment
S = resale value
r = discount (interest rate)
n = equipment lifespan
A(n,r) = annuity factor* (n years at interest rate r )
To calculate the equivalent annual cost we have assumed that the meters last 5 years and have
no resale value. However, the total annual equivalent cost would depend on the actual number
of meters that were necessary to deliver the strategy. This is not known and service delivery is
not generally part of the remit of NICE guidelines. Therefore, the results are presented as a
threshold analysis, with the threshold being the number of meters at which the TSB strategy
(Strategy 2) would be equivalent in cost to the TCB strategy (Strategy 3).

* An annuity factor converts a present valueinto an annuity, a series of equal annual payments.

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