Periodic budget impact

Signature

BI_t = E_A,t - E_R,t

• E_A,t Total expenditure expected during period t when the intervention is adopted (currency per budget period)
• E_R,t Total expenditure expected during period t without adoption (the same currency and budget period as E_A,t)

Function

Budget-change function

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Implementations

• Excel

  Calculate periodic budget impact

  Excel subtracts reference-scenario expenditure from adoption-scenario expenditure for each period.

  =AdoptionExpenditure-ReferenceExpenditure

Assumptions

• Comparable scenarios

  Reference and adoption scenarios cover the same budget holder population and reporting period.

• Adoption-driven differences

  The scenarios differ only where adoption is expected to change population flows treatment mix resource use prices or implementation.

• Consistent monetary basis

  Both scenarios use the same currency, price year and nominal-or-real convention.

• Budget-relevant expenditure

  Costs and savings are included only when they affect the stated budget holder during the specified period.

Worked examples

• Year-one expenditure increase

  Reference-scenario expenditure is £21,000,000 and adoption-scenario expenditure is £21,900,000. The year-one budget impact is a £900,000 expenditure increase.

  BI_1 = 21900000 - 21000000 = 900000

Common errors

• Using unchanged current practice as the reference automatically

  The reference scenario should represent the expected future without adoption and may include changes in population treatment patterns prices and clinical practice.

Sources

• ISPOR budget impact good-practice report

  Sullivan SD, Mauskopf JA, Augustovski F, et al. Budget impact analysis—principles of good practice. Value in Health. 2014;17(1):5–14.

  View source →

Canonical Identity