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Methods for incorporating covariate adjustment, subgroup analysis and between-centre differences into cost-effectiveness evaluations

  • Richard M. Nixon

    (MRC Biostatistics Unit, Institute of Public Health, Robinson Way, Cambridge, UK)

  • Simon G. Thompson

    (MRC Biostatistics Unit, Institute of Public Health, Robinson Way, Cambridge, UK)

Registered author(s):

    Background: Overall assessments of cost-effectiveness are now commonplace in informing medical policy decision making. It is often important, however, also to investigate how cost-effectiveness varies between patient subgroups. Yet such analyses are rarely undertaken, because appropriate methods have not been sufficiently developed. Methods: We propose a coherent set of Bayesian methods to extend cost-effectiveness analyses to adjust for baseline covariates, to investigate differences between subgroups, and to allow for differences between centres in a multicentre study using a hierarchical model. These methods consider costs and effects jointly, and allow for the typically skewed distribution of cost data. The results are presented as inferences on the cost-effectiveness plane, and as cost-effectiveness acceptability curves. Results: In applying these methods to a randomised trial of case management of psychotic patients, we show that overall cost-effectiveness can be affected by ignoring the skewness of cost data, but that it may be difficult to gain substantial precision by adjusting for baseline covariates. While analyses of overall cost-effectiveness can mask important subgroup differences, crude differences between centres may provide an unrealistic indication of the true differences between them. Conclusions: The methods developed allow a flexible choice for the distributions used for cost data, and have a wide range of applicability - to both randomised trials and observational studies. Experience needs to be gained in applying these methods in practice, and using their results in decision making. Copyright © 2005 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1008
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    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 14 (2005)
    Issue (Month): 12 ()
    Pages: 1217-1229

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    Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1217-1229
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Manning, Willard G. & Mullahy, John, 2001. "Estimating log models: to transform or not to transform?," Journal of Health Economics, Elsevier, vol. 20(4), pages 461-494, July.
    2. 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.
    3. Richard Grieve & Richard Nixon & Simon G. Thompson & Charles Normand, 2005. "Using multilevel models for assessing the variability of multinational resource use and cost data," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 185-196.
    4. Anthony O'Hagan & John W. Stevens, 2001. "A framework for cost-effectiveness analysis from clinical trial data," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 303-315.
    5. Richard J. Willke & Henry A. Glick & Daniel Polsky & Kevin Schulman, 1998. "Estimating country-specific cost-effectiveness from multinational clinical trials," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 481-493.
    6. Partha Deb & James F. Burgess, Jr., 2003. "A Quasi-experimental Comparison of Econometric Models for Health Care Expenditures," Economics Working Paper Archive at Hunter College 212, Hunter College Department of Economics.
    7. Tambour, Magnus & Zethraeus, Niklas & Johannesson, Magnus, 1997. "A Note on Confidence Intervals in Cost-Effectiveness Analysis," SSE/EFI Working Paper Series in Economics and Finance 181, Stockholm School of Economics.
    8. Andrew R. Willan & Andrew H. Briggs & Jeffrey S. Hoch, 2004. "Regression methods for covariate adjustment and subgroup analysis for non-censored cost-effectiveness data," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 461-475.
    9. Andrea Manca & Nigel Rice & Mark J. Sculpher & Andrew H. Briggs, 2005. "Assessing generalisability by location in trial-based cost-effectiveness analysis: the use of multilevel models," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 471-485.
    10. Aaron A. Stinnett & John Mullahy, 1998. "Net Health Benefits: A New Framework for the Analysis of Uncertainty in Cost-Effectiveness Analysis," NBER Technical Working Papers 0227, National Bureau of Economic Research, Inc.
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