How much does a costing study cost? What drives the price

“How much will it cost?” is usually the first question when an organisation needs a costing study — for a budget, a grant proposal or a scale-up plan. There is no single answer, because the effort a costing study takes depends on a small number of scoping choices. Knowing what they are helps you commission a study that fits your budget and still answers your question.

The six things that drive the price

1. The question. A unit cost for one service in one programme is a much smaller job than a costed national strategy or a benefit package covering dozens of services. The clearer and narrower the question, the lower the cost.

2. The number of sites. Each facility or district visited adds data collection, travel and analysis. Many studies cost a purposive or random sample of sites rather than all of them; the sampling choice should match how the results will be used.

3. Primary data collection versus existing data. Using existing financial records, programme reports and procurement data is quicker and cheaper. Time-and-motion observation, facility surveys or patient interviews add accuracy but also add time and cost.

4. The perspective. A provider or programme perspective counts the costs of delivering the service. A societal perspective also counts patients’ and families’ costs, such as travel and lost income, which usually means a patient survey.

5. The methods. Bottom-up (ingredients) costing is more detailed than a top-down allocation of total expenditure, and needs more data. Many studies combine both. Our guide to the ingredients approach explains the difference.

6. The deliverables. A short technical note and a workbook take less time than a full report, a policy brief, a validation workshop and a journal article.

Ways to keep the cost down

• Start from existing data. Ask what financial, programme and procurement records already exist before planning new data collection.
• Sample sites deliberately. A well-chosen sample can give a defensible unit cost for far less than a census of facilities.
• Agree the perspective early. Only include patient costs if your decision needs them.
• Reuse tools. A documented costing workbook, like our free programme costing template, can be updated next year instead of starting again.
• Phase the work. A rapid costing now, with a more detailed study later if the decision needs it.

Questions to answer before asking for a quote

1. What decision will the unit cost inform, and by when?
2. Which services or activities are included?
3. Which sites, and how many?
4. What data already exist, and who holds them?
5. Whose costs should be counted?
6. What do you need to receive at the end?

With answers to these, a provider can give you a written proposal with a clear scope, timeline and price — and you can compare proposals on the same basis.

Our Rapid Costing Study package is designed for the common case of one service or programme costed from existing data. For a checklist to use when commissioning or reviewing any costing study, see our costing study checklist.