5.2 Costs

Economic costs in health economics refers to the monetary value of resources utilised as well as the opportunity cost: a wider principle in economics, but in this context the value of the next-best alternative that is foregone when a decision is made to use resources in a particular way.

In health economics there are two types of costs to consider: direct and indirect (Turner et al., 2023).

• Direct costs, specifically direct medical costs, are the explicit costs that go towards medical care, such as healthcare staff time, equipment, medication and consumables. Direct non-medical costs are the additional costs associated with medical care that are incurred as a result of illness separate to medical treatment costs but are related to receiving healthcare. Examples include costs related to transportation, accommodation and meals.

• Indirect costs include the costs that are incurred as a result of illness but are not directly a result of seeking healthcare. These include medical and non-medical costs, although indirect medical costs are not often considered. Indirect non-medical costs are more frequently included in economic analyses such as productivity losses: for example, from death, the patient’s inability to work whilst sick or a caregiver’s inability to work in order to care for an ill person.

  In the case of AMR, the use of antibiotics is accepted as a driver of future AMR, so there is an extra societal cost associated with the consumption of antibiotics today with the incidence of future resistance and the associated costs of future resistant infections. This is a very complicated cost to estimate, although some attempts have been made by researchers (Shrestha et al., 2018).

Video 1 explains the difference between direct and indirect costs.