Evaluation 2020

Session ID: 1062 Including Costs (and Cost-Effectiveness or Cost-Benefit or Cost-Utility Analyses) in Your Evaluation: Advice & Guidance 

10-20-2020 12:51

This multi-paper panel introduces program evaluators and program decision-makers to key concepts and tools from economics and management accounting that can help to make program operations more efficient.

The first paper introduces cost-inclusive evaluation in its many forms. It encourages embracement of tools from other disciplines since considerable benefits can be derived from using other types of financial evaluation tools. It explains why it is important to know your program's cost drivers, and why you should thoroughly understand the concept of cost behavior. Understanding how a program's variable costs and fixed costs behave on a per unit basis and in total can provide powerful information for those tasked with decision-making. It also explores the relationship between costs and output level, the appropriate selling price for your service, a program's break-even point, (i.e., the point at which the program makes neither a profit nor loss), the projected target return that can help you to remain sustainable, and more.

The second paper delves deep into evaluation of costs. Psychology training clinics pose complex dilemmas for cost evaluation, in that there is little exchange of money but a variety of resources are used to provide services, including direct therapy as well as supervision and training. Summing the monetary values of these and related resources, such as space in which clinics operate in universities, raised clinic costs to approximately $302,487 per year in 2019 U.S. dollars, or about $11,203 to see 20 clients annually—a remarkably high $1,403 per client per session for 14 sessions! Alternative methods of evaluating costs do, of course, lower the cost total tremendously, as explained in the later part of the presentation.

The third presentation focuses on feasibility evaluation, which involves economic concepts in yet additional ways. The growing demand for evidence-based practices creates a corresponding demand for economic feasibility analysis, which can help evaluators determine the viability, cost, and benefits associated with a project before financial resources are allocated. Conducting a feasibility analysis gives stakeholders a clear picture about the proposed project. This study is relevant and important to bettering the practice of evaluation through assessment of project capacities and priorities, in particular the economic and financial underlying preferred options.

A fourth presentation presents adaptation that economists and evaluations need to make for cost-inclusive evaluations to succeed as collaborative efforts. Decades of working with evaluations and providers of heath, mental health, and substance use services, and with economists, have demonstrated the need for both evaluators and economics to critically examine their world views and biases. Adaptations needed in evaluators common approaches and assumptions, and in those of economists, are illustrated with examples from cost-inclusive program evaluations in health and human services.

The ideas, examples, and practices illustrated in these four presentations leave participants with basic guidance for proceeding in evaluations that blend accounting concepts, economic methods, and well-tested evaluation practices.

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Advice & Guidance   3.09 MB   1 version
Uploaded - 10-20-2020
Increasingly, evaluations of programs and research on innovations require collection of information on costs, cost-effectiveness, and often more. Most evaluators are not prepared to do this. We give advice and guidance on how to meet these needs. The first presentation explains what types of costs can be included in evaluations, and what cost, cost- effectiveness, cost-benefit, and cost-utility means when one or more of these are among the aims of an evaluation. A second presentation describes how costs... The third presentation describes how to evaluate the economic feasibility of a program before it is funded and initiated. These are prospective cost, cost- effectiveness, cost-benefit, and cost-utility analyses. A fourth presentation explores adjustments that evaluators and economists need to make when collaborating on evaluations that include costs.