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Incorporating model uncertainty in cost-effectiveness analysis: A Bayesian model averaging approach


  • Negri­n, Miguel A.
  • Vázquez-Polo, Francisco-José


Recently, several authors have proposed the use of linear regression models in cost-effectiveness analysis. In this paper, by modelling costs and outcomes using patient and Health Centre covariates, we seek to identify the part of the cost or outcome difference that is not attributable to the treatment itself, but to the patients' condition or to characteristics of the Centres. Selection of the covariates to be included as predictors of effectiveness and cost is usually assumed by the researcher. This behaviour ignores the uncertainty associated with model selection and leads to underestimation of the uncertainty about quantities of interest. We propose the use of Bayesian model averaging as a mechanism to account for such uncertainty about the model. Data from a clinical trial are used to analyze the effect of incorporating model uncertainty, by comparing two highly active antiretroviral treatments applied to asymptomatic HIV patients. The joint posterior density of incremental effectiveness and cost and cost-effectiveness acceptability curves are proposed as decision-making measures.

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  • Negri­n, Miguel A. & Vázquez-Polo, Francisco-José, 2008. "Incorporating model uncertainty in cost-effectiveness analysis: A Bayesian model averaging approach," Journal of Health Economics, Elsevier, vol. 27(5), pages 1250-1259, September.
  • Handle: RePEc:eee:jhecon:v:27:y:2008:i:5:p:1250-1259

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    References listed on IDEAS

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    Cited by:

    1. Tommi Härkänen & Timo Maljanen & Olavi Lindfors & Esa Virtala & Paul Knekt, 2013. "Confounding and missing data in cost-effectiveness analysis: comparing different methods," Health Economics Review, Springer, vol. 3(1), pages 1-11, December.
    2. Andrew Briggs, 2012. "Statistical Methods for Cost-effectiveness Analysis Alongside Clinical Trials," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 50 Edward Elgar Publishing.

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