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A taxonomy of model structures for economic evaluation of health technologies


  • Alan Brennan

    (School of Health and Related Research (ScHARR), University of Sheffield, Sheffield, UK)

  • Stephen E. Chick

    (Health Management Institute, INSEAD, Technology and Operations Management Area, Fontainebleau, France)

  • Ruth Davies

    (Operational Research and Systems, Warwick Business School, University of Warwick, Coventry, UK)


Models for the economic evaluation of health technologies provide valuable information to decision makers. The choice of model structure is rarely discussed in published studies and can affect the results produced. Many papers describe good modelling practice, but few describe how to choose from the many types of available models. This paper develops a new taxonomy of model structures. The horizontal axis of the taxonomy describes assumptions about the role of expected values, randomness, the heterogeneity of entities, and the degree of non-Markovian structure. Commonly used aggregate models, including decision trees and Markov models require large population numbers, homogeneous sub-groups and linear interactions. Individual models are more flexible, but may require replications with different random numbers to estimate expected values. The vertical axis of the taxonomy describes potential interactions between the individual actors, as well as how the interactions occur through time. Models using interactions, such as system dynamics, some Markov models, and discrete event simulation are fairly uncommon in the health economics but are necessary for modelling infectious diseases and systems with constrained resources. The paper provides guidance for choosing a model, based on key requirements, including output requirements, the population size, and system complexity. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Alan Brennan & Stephen E. Chick & Ruth Davies, 2006. "A taxonomy of model structures for economic evaluation of health technologies," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1295-1310.
  • Handle: RePEc:wly:hlthec:v:15:y:2006:i:12:p:1295-1310
    DOI: 10.1002/hec.1148

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    References listed on IDEAS

    1. Davies, Ruth & Roderick, Paul & Raftery, James, 2003. "The evaluation of disease prevention and treatment using simulation models," European Journal of Operational Research, Elsevier, vol. 150(1), pages 53-66, October.
    2. Karl Claxton & Mark Sculpher & Chris McCabe & Andrew Briggs & Ron Akehurst & Martin Buxton & John Brazier & Tony O'Hagan, 2005. "Probabilistic sensitivity analysis for NICE technology assessment: not an optional extra," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 339-347.
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