Accounting for Indirect Costs in Public Health Cost Analyses

Resource Summary

There is a gap in research regarding the resources needed to deliver public health activities, which inhibits informed decision making around investments in public health and the allocation of funds among activities. When conducting cost analyses in public health, it is important to include costs from all cost components, including personnel, non-personnel, and indirect costs. However, defining, identifying, and measuring indirect costs is challenging and can impede studies of this type. The purpose of this pilot study is to create a catalog of the methodologies public health researchers have used to account for indirect costs. The final products submitted by the eleven practice-based research networks who received funding from the Robert Wood Johnson Foundation were surveyed to explore the delivery and cost of public health activities for their indirect cost inclusion method. The primary investigators were contacted to verify their methodology. Ten of the 11 networks (91 percent) could be reached. Four of the networks used a prenegotiated rate the health department had with the state agency. Three of the networks used a data collection instrument that had public health administrative staff estimate these costs. Three of the networks did not include indirect costs in their analyses. Although challenging, it is important to include indirect costs in public health cost analyses as they are a real cost to public health departments and research findings without these costs have limited applicability. This review can assist researchers by reviewing approaches previously used by public health researchers.