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Stratified cost‐effectiveness analysis: a framework for establishing efficient limited use criteria

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  • Douglas Coyle
  • Martin J. Buxton
  • Bernie J. O'Brien

Abstract

The cost‐effectiveness of new health care technologies is conditional upon who receives what therapy and under what circumstances. Understanding this heterogeneity in cost‐effectiveness, health care payers often limit reimbursement of therapies to a more restrictive sub‐group of patients than that indicated in a product's licensing. Such limits may be based upon clinical or demographic criteria that are prognostic of costs, outcomes or both. However, there is little guidance on how to estimate and interpret stratified cost‐effectiveness analysis. In this paper we present a framework for estimating the benefits from stratification that permits consideration of both the opportunity cost resulting from a lack of adherence with criteria and the efficiency loss associated with incorporating equity concerns. Copyright © 2003 John Wiley & Sons, Ltd.

Suggested Citation

  • 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., vol. 12(5), pages 421-427, May.
    • Handle: RePEc:wly:hlthec:v:12:y:2003:i:5:p:421-427
    DOI: 10.1002/hec.788
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