The design and analysis of stochastic cost-effectiveness studies for the evaluation of health care interventions
AbstractMany clinical trials are in progress which involve the collection of patient-level data on both the health outcome and resource use consequences of the health care interventions under evaluation. The overall aim of many such evaluations will be to undertake a cost-effectiveness analysis, which will often result in a cost-effectiveness ratio summarising the value for money of the intervention in question. In this paper, we explore the issues surrounding the design and analysis of such studies. At the design stage of an analysis, we propose an improved sample size formula for cost-effectiveness analysis that allows for covariance between cost and effect differences. This approach is based on the 'net benefits' approach to the analysis of uncertainty in cost-effectiveness analysis. At the analysis stage of an evaluation, we explore the differences and similarities of the 'net benefit' approach to analysing cost-effectiveness information and the traditional approach based on cost-effectiveness ratios. Despite the apparent differences, we show that the two approaches are exactly equivalent when it comes to estimating the probability that the intervention is cost-effective under alternative values of the ceiling cost-effectiveness ratio appropriate for decision-making purposes.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 234.
Length: 24 pages
Date of creation: 27 Apr 1998
Date of revision:
Publication status: Published in Drug Information Journal, 2001, pages 1455-1468.
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Cost-effectiveness; Economic evaluation; Sample size;
Find related papers by JEL classification:
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- I10 - Health, Education, and Welfare - - Health - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-05-13 (All new papers)
- NEP-ECM-1998-05-13 (Econometrics)
- NEP-EXP-1998-05-13 (Experimental Economics)
- NEP-HEA-1998-05-13 (Health Economics)
- NEP-PBE-1998-05-13 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Johannesson, Magnus & Weinstein, Milton C., 1993. "On the decision rules of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 12(4), pages 459-467, December.
- Peter Wakker & Marc P. Klaassen, 1995. "Confidence intervals for cost/effectiveness ratios," Health Economics, John Wiley & Sons, Ltd., vol. 4(5), pages 373-381, 09.
- Andrew H. Briggs & David E. Wonderling & Christopher Z. Mooney, 1997. "Pulling cost-effectiveness analysis up by its bootstraps: A non-parametric approach to confidence interval estimation," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 327-340.
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