Standard Cost Lists for Healthcare in Canada: Issues in Validity and Inter-Provincial Consolidation

A standard cost list is a listing of recommended costs for a selected group of services. Standard costs are used in economic evaluation studies to eliminate that proportion of cost differences between interventions that are due to cost differences between providers. In this article we provide a summary of cost lists for pharmaceutical economic evaluation purposes which have been developed in 2 provinces in Canada - Alberta and Manitoba. We then assess these 2 lists from 2 different viewpoints. First, we developed criteria for the internal and external validity of costs and, in light of these validity criteria, we assessed how the 2 standard cost lists compared with the `ideal' measure of long run marginal costs. Second, we identified the criteria for the inter-provincial consolidation of standard cost measures (in order to develop a single, consolidated cost list); in light of these criteria, we assessed whether the degree to which the 2 separate lists could be consolidated. The lists achieved a considerable degree of external validity, but fared less well in terms of internal validity. However, these results depend on the `ideal' measure of cost which is used. The lists, in the forms which were developed, are not easily consolidated into a single list. Further refined cost data would be needed in order to achieve consolidation.