Annex A. Cost Benefit Analysis Model Characteristics
One of the main characteristics in the CBA is that the costs and benefits of the model should be identified and measured compared to the counterfactual model, that is, the case where Barnahus is not implemented, and children continue accessing current services. Below, the detailed costs and benefits as well as the assumptions about the counterfactual scenario are discussed in detail.
All figures in the modelling were inflation-adjusted and represent constant 2022 (real) values. If inflation is higher or lower than expected, real prices remain unaffected.
The costs included in the CBA model are calculated based on data provided by the Ministry of Welfare in Latvia. The assumptions are based on international literature as well as inputs provided during the fact-finding mission and the data collection exercise.
Project management
Under scenario 1, where the Barnahus model operates until the year 2024, the project management costs are equal to EUR 76 000 (2021), EUR 65 000 (2022), EUR 51 000 (2023) and EUR 16 000 (2024). Under scenarios 2-4, where one of the main assumptions is that Barnahus operates for 20 years, from 2024 and beyond, the project management costs of Barnahus are estimated to be equal to EUR 16 000 per year.
Assumption on the counterfactual model: Under current services, it is assumed that each agency will have its own project management-related costs. However, under Barnahus, there will be an extra cost due to the need to coordinate different agencies in an integrated way. Thus, the project management costs are considered in full (100%) in the model.
Training of personnel
The costs of training specialists were estimated to be around EUR 65 000 in 2021, EUR 30 000 in 2022, and zero in 2023 and 2024. Under scenario 1, it is assumed that training-related costs will occur only during 2021 and 2022. Under scenarios 2 and 3, it is assumed that the Barnahus model will operate for 20 years with a constant number of staff. Although the number of staff will not change over the years, newcomers might replace employees that leave Barnahus. Additionally, there might be a need for Barnahus staff to receive additional training over the years. Thus, under scenarios 2 and 3, it is assumed that one-quarter of the 2022 costs on training Barnahus personnel will occur every year from 2023 and beyond.
Under scenario 4, it is assumed that 160 children will be supported by Barnahus, and the number of staff will need to triple compared to the initial number of staff. In particular, during the first operational year of Barnahus, it is assumed that 40 children will access the services. During the second operational year of Barnahus (and over), it is assumed that 160 children will access Barnahus and will be treated by three times as many staff members compared to the first operational year. Following this assumption, the training costs were also tripled. From 2024 and after, it is also assumed that one-quarter of the total training costs of Barnahus staff will occur every year, as in scenarios 1 and 3.
Assumption compared to the counterfactual model: Based on the information collected by sector experts during the fact-finding mission, police officers who interview the children attend 40 hours of training courses to be able to handle cases of abuse. It is assumed that 70% of training costs would not have been incurred under current services, i.e., under the counterfactual scenario.
Awareness raising campaigns
According to data provided by the Ministry of Welfare, the cost of awareness raising campaigns was estimated to be around EUR 10 000 in 2021, EUR 27 000 in 2022, and zero onwards.
Assumption compared to the counterfactual model: It is assumed that no costs related to awareness raising campaigns would have been incurred in the absence of the Barnahus model. So, all these costs are included in the CBA model.
Premises upgraded according to the European Barnahus Quality Standards
According to the Ministry of Welfare data, around EUR 540 000 was provided in 2021 to cover costs of adapting the Barnahus facilities’ renovation plans, supervision of reconstruction of facilities, and renovation of facilities. In 2022, around EUR 500 000 were provided to fully cover the supervision and renovation costs, as well as furnishing and equipment. According to the Latvian counterparts, there was a need for an additional EUR 620 000 to cover the increased costs for constructing the Barnahus facilities.
Assumption compared to the counterfactual model: All costs relating to constructing and setting up the Barnahus facilities are included in the model. Any costs relating to renting the premises or other daily expenditures, such as transportation costs, would have been incurred anyway in the absence of the Barnahus model, so they are not included in the CBA model.
Multidisciplinary interagency services
The model includes costs related to the development of the national legislative framework in co-operation with experts (EUR 18 000 split in 2021 and 2022) as well as any costs relating to running Barnahus. In particular, the model includes the salaries of a Barnahus coordinator (around EUR 25 000 per annum), administrator (around EUR 20 000 per annum), and costs relating to supervision for Barnahus staff (around EUR 5 000 per annum) as provided by the Ministry of Welfare.
Assumption compared to the counterfactual model: All costs relating to running Barnahus are taken into account in the model.
Efficiency gains
The annual cost of interviews was calculated based on the annual income of the staff participating in the interview process. In particular, the total cost of interviews per year was calculated as the sum of the annual income of a psychologist (around EUR 20 000 per annum), the annual income of a social worker (around EUR 20 000 per annum), the contract value of three forensic experts for one year (around EUR 50 000), as well as the contract value of one (mobile) exploratory interview expert for one year (around EUR 30 000 per annum).
Under the different scenarios, the interview cost per child was calculated using the total cost of interviews per year and the number of children accessing Barnahus per year. Under scenarios 1 and 2, assuming that 40 children will access Barnahus annually, the interview cost per child was calculated at around EUR 3 000. Under scenario 3, assuming that 80 children will access Barnahus per year and will be treated by the same number of Barnahus staff as under scenarios 1 and 2, the interview cost per child was calculated at around EUR 1,500. Under scenario 4, the model assumes that 160 children will access Barnahus per year, and they will be treated by the triple number of staff compared to the staff assumed in all other scenarios. In this case, the interview cost per child was calculated at around EUR 2,500.
As one of the targets of Barnahus is to minimise the number of interviews of children and re-traumatisation, the model assumes that under Barnahus there will be one forensic interview per case, compared to two interviews per case assumed for current services (the counterfactual scenario). Additionally, due to the data available, the model assumes that the interview cost per child is the same under Barnahus and the counterfactual scenario, with differences between the two scenarios coming solely from the different number of interviews per child. The annual efficiency gains due to fewer interviews under Barnahus are calculated as the annual interview cost under current services minus the annual interview costs under Barnahus.
Treatment
The annual cost of treatment was calculated based on the annual income of the staff participating in the treatment process. In particular, the total cost of treatment sessions per year was calculated as the sum of the annual income of a psychologist (around EUR 20 000 per annum), and the annual income of a social worker (around EUR 20 000 per annum).
Under the different scenarios, the treatment cost per child was calculated using the total cost of treatment per year and the number of children accessing Barnahus per year. Under scenarios 1 and 2, assuming that 40 children will access Barnahus annually, the treatment cost per child was calculated at around EUR 1 000. Under scenario 3, assuming that 80 children will access Barnahus per year and will be treated by the same number of Barnahus staff as under scenarios 1 and 2, the interview cost per child was calculated at around EUR 550. Under scenario 4, the model assumes that 160 children will access Barnahus every year, and they will be treated by the triple number of staff compared to the staff assumed in all other scenarios. The treatment cost per child was calculated at around EUR 800.
The model assumes that the treatment cost per session under Barnahus equals the treatment cost under current services. A second assumption is that the child would receive 1.5 times the number of treatment sessions under the traditional pathway compared to the number of treatment sessions that children would receive under the counterfactual pathway. The annual efficiency gains due to fewer treatment sessions under Barnahus are equal to the annual treatment costs under current services minus the treatment costs under Barnahus.
Social benefits
Additional value of renovated premises
Following standard practice, the model considers the additional value of the renovated premises as part of the benefits generated due to introducing the Barnahus model in Latvia. The additional value equals the benefits accrued to the hospital from using the renovated premises. The model assumes that the additional value of the renovated premises equals the total renovation cost and is spread over 10 years. Since the renovation takes place during the first two years (that is, 2021 and 2022), the renovated premises will be used in 2023 and after. The model assumes that the additional value of the premises equals around EUR 165 000 per year, and these benefits materialise over a 10-year period, between 2023 to 2032.
Reduced adverse outcomes for children
Due to a lack of quantitative evidence on the impact of Barnahus on children, the model is based on international evidence on the benefits of similar programmes (such as the CAC model). The model assumes that Barnahus would help reduce children’s adverse outcomes by 10%.
Based on an (Alma Economics, n.d.[1]) study, prepared for the Independent Review of Children’s Social Care, the weighted average of the cost of adverse outcomes per child in need over their lifetime (aged 1-81 years old) is estimated to be around GBP 7 000 per child per year. Due to the absence of evidence on the impact of the Barnahus or similar programmes in Latvia, the model adapts this UK estimate to the Latvian context. This estimate is adapted based on the differences in the respective countries’ GDP per capita as a proxy for likely cost differences. In particular, as the estimate is calculated as a 2020 real value, the model uses GDP per capita in the UK in 2020 (around USD 41 000) (World Bank, n.d.[2]) as well as GDP per capita in Latvia in 2020 (around USD 18 000). (World Bank, n.d.[3]) Thus, the weighted average of the costs of adverse outcomes per child in need over their lifetime in the Latvian context is estimated to be around GBP 3 160 per year (i.e., around EUR 3,825 per year in 2020 real values). Using the Consumer Price Index (CPI) in Latvia, (Country Economy, n.d.[4]) the weighted average of the cost of adverse outcomes for children is estimated to be around EUR 5 000 per year in 2022 real values.
Thus, based on the assumption that Barnahus helps reduce children’s adverse outcomes by 10% and the cost of adverse outcomes for children is around EUR 5 000 per year, the model estimates that Barnahus would help reduce children’s adverse outcomes by around EUR 500 per child per year over their lifetime.
References
[1] Alma Economics (n.d.), , http://www.almaeconomics.com.
[4] Country Economy (n.d.), Latvia CPI Consumer Price Index, https://countryeconomy.com/countries-cpi/latvia.
[3] World Bank (n.d.), GDP per capita (current US$) – Latvia, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=LV.
[2] World Bank (n.d.), GDP per capita (current US$) – United Kingdom, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=GB.