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The Value of Heterogeneity for Cost-Effectiveness Subgroup Analysis

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  • Manuel A. Espinoza
  • Andrea Manca
  • Karl Claxton
  • Mark J. Sculpher

Abstract

This article develops a general framework to guide the use of subgroup cost-effectiveness analysis for decision making in a collectively funded health system. In doing so, it addresses 2 key policy questions, namely, the identification and selection of subgroups, while distinguishing 2 sources of potential value associated with heterogeneity. These are 1) the value of revealing the factors associated with heterogeneity in costs and outcomes using existing evidence (static value) and 2) the value of acquiring further subgroup-related evidence to resolve the uncertainty given the current understanding of heterogeneity (dynamic value). Consideration of these 2 sources of value can guide subgroup-specific treatment decisions and inform whether further research should be conducted to resolve uncertainty to explain variability in costs and outcomes. We apply the proposed methods to a cost-effectiveness analysis for the management of patients with acute coronary syndrome. This study presents the expected net benefits under current and perfect information when subgroups are defined based on the use and combination of 6 binary covariates. The results of the case study confirm the theoretical expectations. As more subgroups are considered, the marginal net benefit gains obtained under the current information show diminishing marginal returns, and the expected value of perfect information shows a decreasing trend. We present a suggested algorithm that synthesizes the results to guide policy.

Suggested Citation

  • Manuel A. Espinoza & Andrea Manca & Karl Claxton & Mark J. Sculpher, 2014. "The Value of Heterogeneity for Cost-Effectiveness Subgroup Analysis," Medical Decision Making, , vol. 34(8), pages 951-964, November.
    • Handle: RePEc:sae:medema:v:34:y:2014:i:8:p:951-964
    DOI: 10.1177/0272989X14538705
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    References listed on IDEAS

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    7. Karl Claxton & John Posnett, 1996. "An economic approach to clinical trial design and research priority‐setting," Health Economics, John Wiley & Sons, Ltd., vol. 5(6), pages 513-524, November.
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    2. Wolf Rogowski & Katherine Payne & Petra Schnell-Inderst & Andrea Manca & Ursula Rochau & Beate Jahn & Oguzhan Alagoz & Reiner Leidl & Uwe Siebert, 2015. "Concepts of ‘Personalization’ in Personalized Medicine: Implications for Economic Evaluation," PharmacoEconomics, Springer, vol. 33(1), pages 49-59, January.

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