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

Author

Listed:
  • Douglas Coyle

    (Department of Medicine, University of Ottawa, and Ottawa Health Research Institute, Ottawa, ON, Canada)

  • Martin J. Buxton

    (Health Economics Research Group, Brunel University, Uxbridge, UK)

  • Bernie J. O'Brien

    (Department of Clinical Epidemiology and Biostatistics, McMaster University, and Centre for Evaluation of Medicines, St. Joseph's Hospital, Hamilton, ON, Canada)

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.
  • Handle: RePEc:wly:hlthec:v:12:y:2003:i:5:p:421-427
    DOI: 10.1002/hec.788
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    References listed on IDEAS

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    5. K. Claxton & P. J. Neumannn & S. S. Araki & M. C. Weinstein, "undated". "Bayesian Value-of-Information Analysis: An Application to a Policy Model of Alzheimer's Disease," Discussion Papers 00/39, Department of Economics, University of York.
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    Citations

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    Cited by:

    1. Elamin Elbasha & Jagpreet Chhatwal, 2015. "Characterizing Heterogeneity Bias in Cohort-Based Models," PharmacoEconomics, Springer, vol. 33(8), pages 857-865, August.
    2. Rosella Levaggi & Paolo Pertile, 2016. "Pricing policies when patients are heterogeneous: a welfare analysis," Working Papers 17/2016, University of Verona, Department of Economics.
    3. Gravelle, Hugh & Siciliani, Luigi, 2008. "Ramsey waits: Allocating public health service resources when there is rationing by waiting," Journal of Health Economics, Elsevier, vol. 27(5), pages 1143-1154, September.
    4. Jacco Thijssen, 2007. "Ramsey Waits: A Computational Study on General Equilibrium Pricing of Derivative Securities," Discussion Papers 07/16, Department of Economics, University of York.
    5. Janneke Grutters & Mark Sculpher & Andrew Briggs & Johan Severens & Math Candel & James Stahl & Dirk Ruysscher & Albert Boer & Bram Ramaekers & Manuela Joore, 2013. "Acknowledging Patient Heterogeneity in Economic Evaluation," PharmacoEconomics, Springer, vol. 31(2), pages 111-123, February.
    6. Hui Zhang & Gregory Zaric, 2015. "Using price–volume agreements to manage pharmaceutical leakage and off-label promotion," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(7), pages 747-761, September.
    7. Gregory S. Zaric, 2008. "Optimal drug pricing, limited use conditions and stratified net benefits for Markov models of disease progression," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1277-1294.
    8. George Laking & Joanne Lord & Alastair Fischer, 2006. "The economics of diagnosis," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1109-1120.
    9. repec:eee:socmed:v:198:y:2018:i:c:p:27-35 is not listed on IDEAS
    10. Richard M. Nixon & Simon G. Thompson, 2005. "Methods for incorporating covariate adjustment, subgroup analysis and between-centre differences into cost-effectiveness evaluations," Health Economics, John Wiley & Sons, Ltd., vol. 14(12), pages 1217-1229.
    11. Joanne Lord & George Laking & Alastair Fischer, 2006. "Non-linearity in the cost-effectiveness frontier," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 565-577.
    12. repec:kap:ijhcfe:v:17:y:2017:i:2:d:10.1007_s10754-016-9209-1 is not listed on IDEAS
    13. Laura Levaggi & Rosella Levaggi, 2016. "Welfare analysis of rationing in health care provision," Working papers 39, Società Italiana di Economia Pubblica.

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