Longitudinal analysis of censored medical cost data

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Longitudinal analysis of censored medical cost data

Author Info

Onur Başer (Thomson-Medstat, Ann Arbor, USA)
Joseph C. Gardiner (Division of Biostatistics, Department of Epidemiology, Michigan State University, USA)
Cathy J. Bradley (Department of Health Administration, Virginia Commonwealth University, Richmond, USA)
Hüseyin Yüce (Department of Mathematics, Florida International University, USA)
Charles Given (Department of Family Practice, Michigan State University, USA)

Abstract

This paper applies the inverse probability weighted (IPW) least-squares method to estimate the effects of treatment on total medical cost, subject to censoring, in a panel-data setting. IPW pooled ordinary-least squares (POLS) and IPW random effects (RE) models are used. Because total medical cost might not be independent of survival time under administrative censoring, unweighted POLS and RE cannot be used with censored data, to assess the effects of certain explanatory variables. Even under the violation of this independency, IPW estimation gives consistent asymptotic normal coefficients with easily computable standard errors. A traditional and robust form of the Hausman test can be used to compare weighted and unweighted least squares estimators. The methods are applied to a sample of 201 Medicare beneficiaries diagnosed with lung cancer between 1994 and 1997. Copyright © 2006 John Wiley & Sons, Ltd.

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

Volume (Year): 15 (2006)
Issue (Month): 5 ()
Pages: 513-525
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Handle: RePEc:wly:hlthec:v:15:y:2006:i:5:p:513-525

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

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Other versions:
- Horowitz, J.L. & Manski, C.F., 1995. "Censoring of Outcomes and Regressors Due to Survey Nonresponse: Identification and estimation Using Weights and Imputations," Working Papers 95-12, University of Iowa, Department of Economics.
- Joel L. Horowitz & Charles F. Manski, 1996. "Censoring of Outcomes and Regressors Due To Survey Nonresponse: Identification and Estimation Using Weights and Imputations," Econometrics 9602007, EconWPA, revised 06 Mar 1996. [Downloadable!]
Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
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Other versions:
- Willard G. Manning & Anirban Basu & John Mullahy, 2003. "Generalized Modeling Approaches to Risk Adjustment of Skewed Outcomes Data," NBER Technical Working Papers 0293, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Other versions:
- Willard G. Manning & John Mullahy, 1999. "Estimating Log Models: To Transform or Not to Transform?," NBER Technical Working Papers 0246, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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