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Optimal sequential sampling rules for the economic evaluation of health technologies


Author Info

  • Paolo Pertile
  • Martin Forster
  • Davide La Torre


Referring to the literature on optimal stopping under sequential sampling developed by Chernoff and collaborators, we solve a dynamic model of the economic evaluation of a new health technology, deriving optimal rules for technology adoption, research abandonment and continuation as functions of sample size. The model extends the existing literature to the case where an adoption decision can be deferred and involves a degree of irreversibility. We explore the model's applicability in a case study of the economic evaluation of Drug Eluting Stents (DES), deriving dynamic adoption and abandonment thresholds which are a function of the model's economic parameters. A key result is that referring to a single cost-effectiveness threshold may be sub-optimal.

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Bibliographic Info

Paper provided by Department of Economics, University of York in its series Discussion Papers with number 10/24.

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Date of creation: Dec 2010
Date of revision:
Handle: RePEc:yor:yorken:10/24

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Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
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Related research

Keywords: Cost-effectiveness analysis; Sequential sampling; Dynamic programming;

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Cited by:
  1. Daniele Bregantini, 2014. "Don’t Stop ’Til You Get Enough: a quickest detection approach to HTA," Discussion Papers 14/04, Department of Economics, University of York.


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