HLTH 6473 Module 5 Program Cost Analysis Example

$142 per Child Buckled Right: A Cost Analysis of a County Child Passenger Safety Program, With Fixed, Variable and Donated Costs

Student Name

American College of Education

HLTH6473: Finance and Fiscal Management in Public Health

Module 5 Assignment

Instructor Name

August 31, 2026

Introduction

Module 4 funded the county share of a composite central Indiana child passenger safety program in full, largely because its model rests on strong evidence and its county dollars protect matching funds. That decision assumed the program is a good use of money. This paper tests the assumption with a cost analysis. It identifies the program's full costs, including donated resources, separates fixed from variable costs, allocates costs to activities, calculates unit costs for the program's outputs and outcomes, estimates the cost of serving one more family and compares the program's cost with the cost of the injuries it aims to prevent.

Approach

Economic evaluation compares the costs and consequences of alternatives, and even a simple cost analysis should state its perspective, the costs included and the assumptions used (Drummond et al., 2015). This analysis takes two perspectives: the health department's, which counts only what the department pays, and a community perspective, which adds donated space and volunteer time. It uses the program's budget for the year and its service records: 700 seat checks, 390 seats distributed and the results recorded at each check. Cost concepts such as fixed and variable costs and the allocation of shared costs follow standard public sector financial management practice (Finkler et al., 2019).

Total Costs

From the department's perspective, the program costs $95,784 a year, including the 15% indirect rate. From the community perspective, donated resources add $19,000: the fire department's station bay, valued at $4,800 using the county's rate for comparable space; 520 hours of volunteer technician time, valued at $25 an hour, $13,000; and hospital meeting space for monthly events, $1,200. The full community cost is therefore $114,784.

Fixed and Variable Costs

Most of the program's costs are fixed in the short run, meaning they do not change with the number of families served. Personnel, certification, station equipment, evaluation infrastructure and indirect costs, about $71,000, would be spent whether the station checked 500 seats or 800. Variable costs rise with each family served: seats, which average $55.79 each across the three types, supplies and a share of outreach and mileage. Because fixed costs dominate, the program's unit costs fall as it serves more families, which makes underused capacity the most expensive problem it could have.

Costs by Activity

Coordinator and aide time logs were used to allocate personnel and indirect costs among activities. Seat checks, including station operation and technician scheduling, account for about 45% of staff time; seat distribution, including eligibility screening, education and paperwork, 35%; outreach, 12%; and evaluation and reporting, 8%. Adding seat purchases to distribution, the program spends roughly $36,000 on checks, $50,000 on distribution, $6,000 on outreach and $4,000 on evaluation and reporting, rounded.

Unit Costs

Dividing the department's cost of $95,784 by the 700 checks gives $136.83 per check. Of the 700 seats checked, errors were found in 74%, or 518, all of which were corrected at the check, giving a cost of $184.91 per error corrected. At the end of each check, 96% of children, 672, left in a seat installed and used correctly, for a cost of $142.54 per child leaving correctly restrained, the figure in the title. From the community perspective, including donated resources, the cost per child leaving correctly restrained is $170.81. Seat distribution alone, counting only the $50,000 attributed to it, costs about $128 per seat delivered with education.

Marginal Cost of One More Family

The marginal cost, the cost of serving one additional family within existing capacity, is much lower than the average. Serving one more family who needs a seat adds the seat, about $56, a few dollars of supplies and roughly 30 minutes of staff or volunteer time, for a marginal cost near $70. Serving one more family who needs only a check adds almost nothing if the station has open appointments. This distinction matters for the funding strategy in Module 3: a sponsor's $62 gift genuinely pays for one more child's seat, while a gift of the same amount cannot buy a share of the program's fixed costs.

Comparing Cost With Consequences

The program's aim is to prevent injuries. Correctly used child safety seats reduce the need for hospitalization among young children in crashes by 69% and reduce the risk of death by about 70% for infants and 47% to 54% for toddlers (Zaza et al., 2001). The county's hospitals report that the average cost of an inpatient stay for a child injured in a motor vehicle crash was about $28,000 in the most recent year, based on the hospitals' cost-to-charge ratios. At that figure, the program's annual cost of $95,784 equals the cost of about 3.4 such hospitalizations. If correcting errors and supplying seats prevents three or four child hospitalizations a year in the county, the program pays for itself in hospital costs alone, before counting deaths prevented, lasting disability avoided and families' own losses.

Using the Results

The analysis suggests three practical steps. First, fill the station: last year about one appointment in five went unused, and because fixed costs dominate, each additional family checked in an otherwise empty slot lowers the average cost per child with almost no added spending. The bilingual aide's outreach and referrals from pediatric offices are the most direct ways to fill those slots. Second, protect volunteer capacity: donated technician time is worth $13,000 a year, and replacing it with paid staff would raise the program's cost by more than a tenth, so recruiting and recertifying volunteers is a financial priority, not only a staffing one. Third, report unit costs to funders: hospital and health plan partners can relate a cost of about $143 per child correctly restrained to their own costs, which makes the case in Module 3 more concrete than a total budget figure can.

Sensitivity and Limits

These figures depend on assumptions. If volunteer time is valued at $35 rather than $25 an hour, community cost rises by $5,200. If seat prices rise 15%, the department's cost rises by about $3,300. The break-even comparison is the most uncertain part: the program does not know how many of the children it serves will be in crashes, and correcting a misused seat likely prevents less injury than putting an unrestrained child into a seat. The analysis also counts correct use at the end of a check, not over time; the six-month rechecks planned in Module 2 will show how much of that correctness lasts, and cost per child still correctly restrained at six months will be higher.

Conclusion

Taken as a whole, the program costs about $137 per check and $143 per child leaving correctly restrained from the department's perspective, with fixed costs dominating and a marginal cost near $70 for each additional family receiving a seat. Its annual cost equals roughly three to four child crash hospitalizations, a plausible level of benefit for a program built on strong evidence. The analysis supports the decision in Module 4, points to filling unused station capacity as the cheapest way to improve value and identifies the six-month recheck data as the most important evidence still missing. Module 6 builds these findings into a financial plan.

References

Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the economic evaluation of health care programmes (4th ed.). Oxford University Press.

Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2019). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.

Zaza, S., Sleet, D. A., Thompson, R. S., Sosin, D. M., & Bolen, J. C. (2001). Reviews of evidence regarding interventions to increase use of child safety seats. American Journal of Preventive Medicine, 21(4 Suppl.), 31-47. https://doi.org/10.1016/S0749-3797(01)00377-4