Table 2 Overview of identified challenges and potential solutions/recommendations by sector-specific or cross-sectoral methodological aspects

Health and social care sectors

Methodological aspect

Challenges described in the literature

Potential solutions described in the literature

Typical cost identification and valuation approaches: top-down, bottom-up, micro-costing, gross-costing

Indistinctness and inconsistency regarding methods definitions as well as their application;

Practical feasibility hampers wide application of bottom-up micro-costing (time-consuming, unavailable information);

Consideration of bottom-up methodology at least for healthcare services with large component of overheads;

Costing sources to develop unit costs: reference unit costs, fees, charges, market prices

Lack of clarity regarding the difference of standard unit costs and market prices/charges and which costing perspective to apply;

Unit cost estimates are sensitive to the applied costing methods; size of impact of the different choices is unclear;

Ambiguity regarding the costing perspective to apply;

Country specific reference unit costs are the preferred proxy measure for the opportunity costs of health and social care services are, however, often unavailable

International comparison of unit costs:

Internationally, there are large differences between salaries of professionals and diverse professions delivering the same service, potentially resulting in varying unit costs

Consideration of bottom-up methodology in multi-country studies with large differences between salaries of professionals and diverse professions delivering the same service;

Costing methods: total costs (fixed and variable), marginal costs

Ambiguity regarding cost types and components to consider;

Depending on the purpose, consideration of different time horizons and consequently cost components:

Variable costs for services happening within existing infra structure despite requiring new investments on other levels;

Marginal costs for services that can be offered by using existing equipment;

Methods for valuation of overhead costs of services: allocation of weighted service/hourly rate/inpatient day/marginal mark-up

Absence of universally accepted standard for the estimation of overhead costs;

Micro-costing is not feasible for the determination of overhead costs for hospitals/large institutions;

Application of the ratio of overhead to direct expenses for similar departments;

Education and criminal justice sectors

Valuation of health-related service use in the education and (criminal) justice sectors

Valuation methods of health-related service use in the education and (criminal) justice sector are less established. Their feasibility in different countries has yet to be determined;

Methodological choice should be based on the underlying data and their availability/ reliability;

Feasibility to use opportunity cost method based on micro-costing is limited, as time consuming;

Reliability, transparency, unrestricted availability and transparent referencing are a prerequisite for the validity of utilizing market prices from governmental reports to calculate proxy unit prices, which is not always possible to determine

Cross-sectoral costing issues

Perspective to adopt to consider all relevant costs/cross-sectoral costs: societal perspective

Risk of double-counting due to lack of transparency in costing components;