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Open Access Research

Marginal costing methods highlight the contributing cost of comorbid conditions in Medicare patients: a quasi-experimental case–control study of ischemic stroke costs

Annie N Simpson1*, Heather S Bonilha23, Abby S Kazley1, James S Zoller1 and Charles Ellis23

Author Affiliations

1 Department of Healthcare Leadership and Management, Medical University of South Carolina, 151 Rutledge Avenue, MSC 962, Charleston, SC 29425, USA

2 Department of Health Sciences and Research, Medical University of South Carolina, 151 Rutledge Avenue, MSC 962, Charleston, SC 29425, USA

3 Department of Otolaryngology-Head and Neck Surgery, College of Medicine, Medical University of South Carolina, 151 Rutledge Avenue, MSC 962, Charleston, SC 29425, USA

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Cost Effectiveness and Resource Allocation 2013, 11:29  doi:10.1186/1478-7547-11-29

Published: 16 November 2013

Abstract

Background

Cost of illness studies are needed to provide estimates for input into cost-effectiveness studies and as information drivers to resource allocation. However, these studies often do not differentiate costs associated with the disease of interest and costs of co-morbidities. The goal of this study was to identify the 1-year cost of ischemic stroke compared to the annual cost of care for a comparable non-stroke group of South Carolina (SC) Medicare beneficiaries resulting in a marginal cost estimate.

Methods

SC data for 2004 and 2005 were used to estimate the mean 12 month cost of stroke for 2,976 Medicare beneficiaries hospitalized for Ischemic Stroke in 2004. Using nearest neighbor propensity score matching, a control group of non-stroke beneficiaries were matched on age, gender, race, risk factors, and Charlson comorbidity index and their costs were calculated. Marginal cost attributable to ischemic stroke was calculated as the difference between these two adjusted cost estimates.

Results

The total cost estimated for SC stroke patients for 1 year (2004) was $81.3 million. The cost for the matched comparison group without stroke was $54.4 million. Thus, the 2004 marginal costs to Medicare due to Ischemic stroke in SC are estimated to be $26.9 million.

Conclusions

Accurate estimates of cost of care for conditions, such as stroke, that are common in older patients with a high rate of comorbid conditions require the use of a marginal costing approach. Over estimation of cost of care for stroke may lead to prediction of larger savings than realizable from important stroke treatment and prevention programs, which may damage the credibility of program advocates, and jeopardize long term funding support. Additionally, correct cost estimates are needed as inputs for valid cost-effectiveness studies. Thus, it is important to use marginal costing for stroke, especially with the increasing public focus on evidence-based economic decision making to be expected with healthcare reform.

Keywords:
Marginal cost; Attributable cost; Methods; Rehabilitation; Ischemic stroke