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

Author

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  • 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)

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1217-1229
    DOI: 10.1002/hec.1008
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    References listed on IDEAS

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    Cited by:

    1. Thompson, Simon G. & Nixon, Richard M. & Grieve, Richard, 2006. "Addressing the issues that arise in analysing multicentre cost data, with application to a multinational study," Journal of Health Economics, Elsevier, vol. 25(6), pages 1015-1028, November.
    2. Moreno, E. & Girón, F.J. & Martínez, M.L. & Vázquez-Polo, F.J. & Negrín, M.A., 2013. "Optimal treatments in cost-effectiveness analysis in the presence of covariates: Improving patient subgroup definition," European Journal of Operational Research, Elsevier, vol. 226(1), pages 173-182.
    3. Moreno, Elías & Girón, F.J. & Vázquez-Polo, F.J. & Negrín, M.A., 2012. "Optimal healthcare decisions: The importance of the covariates in cost–effectiveness analysis," European Journal of Operational Research, Elsevier, vol. 218(2), pages 512-522.
    4. Jeffrey Hoch & Carolyn Dewa, 2007. "Lessons from Trial-Based Cost-Effectiveness Analyses of Mental Health Interventions," PharmacoEconomics, Springer, vol. 25(10), pages 807-816, October.
    5. Zou, Guang Yong & Taleban, Julia & Huo, Cindy Y., 2009. "Confidence interval estimation for lognormal data with application to health economics," Computational Statistics & Data Analysis, Elsevier, vol. 53(11), pages 3755-3764, September.
    6. Andrew R. Willan & Matthew E. Kowgier, 2008. "Cost-effectiveness analysis of a multinational RCT with a binary measure of effectiveness and an interacting covariate," Health Economics, John Wiley & Sons, Ltd., vol. 17(7), pages 777-791.
    7. Peter Makai & Willemijn Looman & Eddy Adang & René Melis & Elly Stolk & Isabelle Fabbricotti, 2015. "Cost-effectiveness of integrated care in frail elderly using the ICECAP-O and EQ-5D: does choice of instrument matter?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(4), pages 437-450, May.
    8. Gomes, M & Grieve, R, 2011. "Estimating the Effects of Friendship Networks on Health Behaviors of Adolescents," Health, Econometrics and Data Group (HEDG) Working Papers 11/14, HEDG, c/o Department of Economics, University of York.

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