Cost Classification - Counting the Costs
Health costs are Direct (for services) or Indirect (lost resources due to illness).
and Indirect Costs (Morbidity and Mortality costs))
| Feature | Direct Costs | Indirect Costs |
|---|---|---|
| Definition | Costs for health services (medical & non-medical). | Value of lost resources (illness, disability, death). |
| Types | Medical (drugs, fees); Non-Medical (travel, food). | Morbidity (lost workdays); Mortality (lost future earnings). |
| Examples | Medicines, fees, Out-of-Pocket Expenditure (OOPE), transport. | Lost wages, Productivity Losses. (Human Capital Approach) |
| Payer | Patient/Family, Insurance, Govt. | Individual/Family, Society. |
📌 Direct: Doctor, Drugs, Diagnostics, Daily travel.
High‑Yield Points - ⚡ Biggest Takeaways
- Direct costs: Medical (drugs, consultations) & non-medical (travel, food) expenses for treatment.
- Indirect costs: Lost productivity from illness, disability, or premature death (e.g., lost wages).
- Intangible costs: Non-financial burdens like pain, suffering; hard to quantify but significant.
- Direct medical costs are for services; direct non-medical for patient out-of-pocket expenses.
- Human Capital Approach values indirect costs via lost earnings/productivity.
- Cost distinction is key for economic evaluations & health resource allocation.
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