Signature
CBI_T = sum_(t=1)^T BI_t
| Inputs | Definition | Unit |
|---|---|---|
BI_t | Change in expenditure during period t attributable to adoption | currency per budget period |
CBI_T | Total change in expenditure across periods 1 through T | currency over the planning horizon |
|---|
TFinal period included in the budget planning horizon (number of periods)
Function
Budget-change function
Maps reference- and adoption-scenario expenditure to periodic and cumulative changes in spending for a specified budget holder.
Try this function
Implementations
Excel
Calculate cumulative budget impact
Excel sums the periodic budget-impact range across the planning horizon.
=SUM(PeriodicBudgetImpact)
Assumptions
Complete period coverage
Every reporting period from 1 through T is included exactly once.
Consistent monetary basis across budget periods
Periodic impacts use a consistent currency and nominal-or-real convention before they are added.
Undiscounted planning cash flows
Periodic budget impacts are normally reported as undiscounted cash flows unless the budget holder explicitly requires an additional present-value view.
Worked examples
Three-year cumulative budget impact
Annual budget impacts are £900,000, £1,200,000 and £1,500,000. The cumulative three-year budget impact is £3,600,000.
T = 3; BI_t = [900000,1200000,1500000]; CBI_T = 3600000
Common errors
Discounting away the annual cash-flow view
Replacing undiscounted period-specific expenditure with a single discounted total can obscure the amounts the budget holder expects to pay in each financial period.
Sources
ISPOR report for cumulative budget impact
Sullivan SD, Mauskopf JA, Augustovski F, Jaime Caro J, Lee KM, Minchin M, et al. Budget impact analysis: principles of good practice. Report of the ISPOR 2012 Budget Impact Analysis Good Practice II Task Force. Value in Health. 2014;17(1):5-14.
Canonical Identity
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