Cost and cost-effectiveness studies are increasingly being used to guide practical policy decisions in many parts of the world. This tendency has received additional impetus in low income countries with international attention focused on how best to achieve the health-related millennium development goals (MDGs). The numerous resulting studies explore the impact of different mixes of interventions on health as well as the resource requirements to scale them up to the extent necessary to achieve the goals [1–4].
Costing and cost-effectiveness studies have, however, frequently included only the costs incurred at the point of delivery to beneficiaries, omitting those incurred at other levels of the system. These additional costs have been defined elsewhere as programme costs and we use that terminology in this paper . They include the costs of establishing and running a programme at national, provincial or district administrative levels, for activities such as planning and supervision, advertising and media, and training.
In some published studies it is not clear whether programme costs have been included. Where they are included it has been common to assume that they are an arbitrary proportion of total costs – commonly 10% – although at other times programme costs estimated from other countries have been converted to the local setting at official or purchasing power parity (PPP) exchange rates . The few studies that have attempted to estimate programme costs directly have shown that they vary by intervention and can range from a relatively low to a substantial proportion of total costs [7, 6]. The total exclusion of programme costs, or inaccurate estimation methods, can misrepresents the resources required to implement or maintain health interventions and biases comparative assessment of their cost-effectiveness.
In its CHOICE project , WHO seeks to assist countries to set priorities by making publicly available region- and country-specific estimates of the costs, effectiveness, and cost-effectiveness of a large set of interventions, analysed in a standardized and comparable way . The project was developed in response to the recognition by countries that it is not feasible for each of them, particularly those with limited capacity, to perform full analyses of the cost-effectiveness of all possible ways of spending scarce health resources in their settings. Subsequently, WHO-CHOICE has also provided assistance to global and country efforts to estimate the resources required to scale up health interventions, including those aimed at achieving the millennium development goals . In this work, WHO has sought to include programme costs as accurately as possible and in a standardized way, in addition to the costs incurred in providing services directly to patients – e.g. for pharmaceuticals, investigatory tests, outpatient visits and hospital stays.
An ingredients approach to costing has been used where the physical quantities of the necessary inputs are multiplied by their unit prices to obtain total costs. To facilitate this work, data have been collected on the unit costs or prices of the different types of inputs and activities used in key interventions for as many countries as possible. This has revealed that unit costs vary considerably both within and across countries. For this reason, the common practice in cost-effectiveness studies of basing cost estimates on a single observation of the cost of an input – for example, the price of labour, transportation or renting an office – can lead to misleading results . This has already been illustrated by Adam et al.  for hospitals where the cost per inpatient day was shown to vary by an order of magnitude across hospitals within the same country. If an analyst were to use the unit cost estimated for a hospital that happens to be an outlier, high or low, the results would be biased either against or towards hospital-based interventions. Moreover, it would not be possible to know the direction or extent of any possible bias.
For this reason, we have tried to explore alternative ways of obtaining average unit costs for cost-effectiveness analysis aimed particularly at countries where there are limited data points available from accurate costing studies. Clearly the first and best solution would be to base costs on a representative sample of observations for all possible inputs and activities, but rarely do analysts have access to these data or the funds to generate them, even in the richest countries.
Results for inpatient days and outpatient visits to hospitals have already been published  and those for department-specific hospital stays and labour costs are under review [10, 12–14]. This paper describes models focusing on two "non-traded" inputs to programme costs – media and advertising for health promotion, and utilities such as water and electricity that are essential ingredients of most health programmes. Media can be a very small or a very large component of costs, at the limit approaching 100% of costs for mass media campaigns for health promotion, for example. Utilities, on the other hand, are almost always present but rarely constitute a large part of costs.
There are three objectives. The first, and overall, objective is to develop a method that can be used to estimate the average cost of an input for countries with limited data points. The two non-traded inputs that are the focus of this paper are used to illustrate the method, not because they are the most important non-traded inputs for all interventions.
The remaining two objectives are specific to these two inputs. The second objective is to understand the determinants of variations in the unit costs of these inputs across and within countries. The third is to use the estimated relationships to impute an average cost for each country, taking into account the observed variation, uncertainty, and the levels of the other determinants. It is postulated that this average cost is likely to be a more appropriate unit price to use in an economic analysis than a single observation that might well be an outlier.
The paper has, therefore, two audiences. The first consists of analysts who conduct or interpret costing and cost-effectiveness studies. The second comprises researchers and policy makers seeking to understand the methods that have been used in the WHO-CHOICE project.
The paper is organized as follows. For each of the two inputs (media and utilities) the methods and results are presented in turn, including the imputed prices using the best-fit model for a selected number of countries. We conclude with an overall discussion of the potential uses of these results for policy.