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Methods for incorporating covariate adjustment, subgroup analysis and between-centre differences into cost-effectiveness evaluations

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  • Richard M. Nixon

    (MRC Biostatistics Unit, Institute of Public Health, Robinson Way, Cambridge, UK)

  • Simon G. Thompson

    (MRC Biostatistics Unit, Institute of Public Health, Robinson Way, Cambridge, UK)

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    Abstract

    Background: Overall assessments of cost-effectiveness are now commonplace in informing medical policy decision making. It is often important, however, also to investigate how cost-effectiveness varies between patient subgroups. Yet such analyses are rarely undertaken, because appropriate methods have not been sufficiently developed. Methods: We propose a coherent set of Bayesian methods to extend cost-effectiveness analyses to adjust for baseline covariates, to investigate differences between subgroups, and to allow for differences between centres in a multicentre study using a hierarchical model. These methods consider costs and effects jointly, and allow for the typically skewed distribution of cost data. The results are presented as inferences on the cost-effectiveness plane, and as cost-effectiveness acceptability curves. Results: In applying these methods to a randomised trial of case management of psychotic patients, we show that overall cost-effectiveness can be affected by ignoring the skewness of cost data, but that it may be difficult to gain substantial precision by adjusting for baseline covariates. While analyses of overall cost-effectiveness can mask important subgroup differences, crude differences between centres may provide an unrealistic indication of the true differences between them. Conclusions: The methods developed allow a flexible choice for the distributions used for cost data, and have a wide range of applicability - to both randomised trials and observational studies. Experience needs to be gained in applying these methods in practice, and using their results in decision making. Copyright © 2005 John Wiley & Sons, Ltd.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 14 (2005)
    Issue (Month): 12 ()
    Pages: 1217-1229

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    Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1217-1229

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Richard Grieve & Richard Nixon & Simon G. Thompson & Charles Normand, 2005. "Using multilevel models for assessing the variability of multinational resource use and cost data," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(2), pages 185-196.
    2. Tambour, Magnus & Zethraeus, Niklas & Johannesson, Magnus, 1997. "A Note on Confidence Intervals in Cost-Effectiveness Analysis," Working Paper Series in Economics and Finance 181, Stockholm School of Economics.
    3. Partha Deb & James F. Burgess, Jr., 2003. "A Quasi-experimental Comparison of Econometric Models for Health Care Expenditures," Economics Working Paper Archive at Hunter College, Hunter College Department of Economics 212, Hunter College Department of Economics.
    4. Anthony O'Hagan & John W. Stevens, 2001. "A framework for cost-effectiveness analysis from clinical trial data," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(4), pages 303-315.
    5. Willard G. Manning & John Mullahy, 1999. "Estimating Log Models: To Transform or Not to Transform?," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0246, National Bureau of Economic Research, Inc.
    6. Richard J. Willke & Henry A. Glick & Daniel Polsky & Kevin Schulman, 1998. "Estimating country-specific cost-effectiveness from multinational clinical trials," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 7(6), pages 481-493.
    7. Douglas Coyle & Martin J. Buxton & Bernie J. O'Brien, 2003. "Stratified cost-effectiveness analysis: a framework for establishing efficient limited use criteria," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 12(5), pages 421-427.
    8. Andrea Manca & Nigel Rice & Mark J. Sculpher & Andrew H. Briggs, 2005. "Assessing generalisability by location in trial-based cost-effectiveness analysis: the use of multilevel models," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(5), pages 471-485.
    9. Aaron A. Stinnett & John Mullahy, 1998. "Net Health Benefits: A New Framework for the Analysis of Uncertainty in Cost-Effectiveness Analysis," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0227, National Bureau of Economic Research, Inc.
    10. Andrew R. Willan & Andrew H. Briggs & Jeffrey S. Hoch, 2004. "Regression methods for covariate adjustment and subgroup analysis for non-censored cost-effectiveness data," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 13(5), pages 461-475.
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    Cited by:
    1. Moreno, E. & Girón, F.J. & Martínez, M.L. & Vázquez-Polo, F.J. & Negrín, M.A., 2013. "Optimal treatments in cost-effectiveness analysis in the presence of covariates: Improving patient subgroup definition," European Journal of Operational Research, Elsevier, Elsevier, vol. 226(1), pages 173-182.
    2. Gomes, M; & Grieve, R;, 2011. "Estimating the Effects of Friendship Networks on Health Behaviors of Adolescents," Health, Econometrics and Data Group (HEDG) Working Papers, HEDG, c/o Department of Economics, University of York 11/14, HEDG, c/o Department of Economics, University of York.
    3. Jeffrey Hoch & Carolyn Dewa, 2007. "Lessons from Trial-Based Cost-Effectiveness Analyses of Mental Health Interventions," PharmacoEconomics, Springer, Springer, vol. 25(10), pages 807-816, October.
    4. Moreno, Elías & Girón, F.J. & Vázquez-Polo, F.J. & Negrín, M.A., 2012. "Optimal healthcare decisions: The importance of the covariates in cost–effectiveness analysis," European Journal of Operational Research, Elsevier, Elsevier, vol. 218(2), pages 512-522.
    5. Zou, Guang Yong & Taleban, Julia & Huo, Cindy Y., 2009. "Confidence interval estimation for lognormal data with application to health economics," Computational Statistics & Data Analysis, Elsevier, Elsevier, vol. 53(11), pages 3755-3764, September.
    6. Thompson, Simon G. & Nixon, Richard M. & Grieve, Richard, 2006. "Addressing the issues that arise in analysing multicentre cost data, with application to a multinational study," Journal of Health Economics, Elsevier, Elsevier, vol. 25(6), pages 1015-1028, November.
    7. Andrew R. Willan & Matthew E. Kowgier, 2008. "Cost-effectiveness analysis of a multinational RCT with a binary measure of effectiveness and an interacting covariate," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(7), pages 777-791.

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