Term: Standard Costs
Last Updated: 2010-05-05
An average cost (versus micro-cost or user-specific cost) per service provided. Also described as a recommended (standard) cost for any given service (Jacobs et al., 1999). Standard costs are used in economic evaluation studies to ensure that the study results do not vary with costing methods used (i.e. everyone will be using the same standard costs).
In Finlayson et al. (2010), standard costing is done for hospital care, personal care homes, and home care where an average cost for services is determined based on total expenditures divided by the total units of service (e.g., days). This average cost is then applied to each individual case. For example, PCH costs for an individual are determined by the average cost per day multiplied by the number of days the person was a PCH resident.