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Estimating uncertainty ranges for costs by the bootstrap procedure combined with probabilistic sensitivity analysis

Author

Listed:
  • Joanne Lord

    (Department of Public Health Sciences, St. George's Hospital Medical School, London, UK)

  • Maxwell A. Asante

    (Department of Gastroenterology, St. George's Hospital Medical School, London, UK)

Abstract

When an economic evaluation incorporates patient-level data, there are two types of uncertainty over the results: uncertainty due to variation in the sampled data, and uncertainty over the choice of modelling parameters and assumptions. Previously statistical methods have been used to estimate the extent of the former, and sensitivity analysis to estimate the extent of the latter. Ideally interval estimates for economic variables should reflect both types of uncertainty. This paper describes a method for combining bootstrapping with probabilistic sensitivity analysis to estimate a total 'uncertainty range' for incremental costs. The approach is illustrated using cost data from a randomized controlled trial of endoscopy for Helicobactor pylori negative young dyspeptic patients. The trial failed to demonstrate any clinical benefit from endoscopy, which was on average £395 more costly. The combined 95% uncertainty range for incremental costs (−£236 to £931) was wider than 95% intervals estimated by either probabilistic sensitivity analysis (£43 to £592) or the non-parametric bootstrap method (−£95 to £667) alone. The method can easily be extended to the calculation of uncertainty ranges for incremental cost-effectiveness ratios. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Joanne Lord & Maxwell A. Asante, 1999. "Estimating uncertainty ranges for costs by the bootstrap procedure combined with probabilistic sensitivity analysis," Health Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 323-333.
  • Handle: RePEc:wly:hlthec:v:8:y:1999:i:4:p:323-333
    DOI: 10.1002/(SICI)1099-1050(199906)8:4<323::AID-HEC431>3.0.CO;2-0
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    References listed on IDEAS

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    1. 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.
    2. Andrew H. Briggs & David E. Wonderling & Christopher Z. Mooney, 1997. "Pulling cost-effectiveness analysis up by its bootstraps: A non-parametric approach to confidence interval estimation," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 327-340.
    3. Andrew Briggs & Mark Sculpher, 1995. "Sensitivity analysis in economic evaluation: A review of published studies," Health Economics, John Wiley & Sons, Ltd., vol. 4(5), pages 355-371, September.
    4. Nigel Rice & Andrew Jones, 1997. "Multilevel models and health economics," Health Economics, John Wiley & Sons, Ltd., vol. 6(6), pages 561-575.
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    Cited by:

    1. Pinto-Prades, Jose Luis & Loomes, Graham & Brey, Raul, 2009. "Trying to estimate a monetary value for the QALY," Journal of Health Economics, Elsevier, vol. 28(3), pages 553-562, May.
    2. A. E. Ades & Karl Claxton & Mark Sculpher, 2006. "Evidence synthesis, parameter correlation and probabilistic sensitivity analysis," Health Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 373-381.
    3. Karnon, Jonathan, 2002. "Planning the efficient allocation of research funds: an adapted application of a non-parametric Bayesian value of information analysis," Health Policy, Elsevier, vol. 61(3), pages 329-347, September.
    4. Raymond C.W. Hutubessy & Rob M.P.M. Baltussen & David B. Evans & Jan J. Barendregt & Christopher J.L. Murray, 2001. "Stochastic league tables: communicating cost-effectiveness results to decision-makers," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 473-477.
    5. Jose Luis Pinto & Raul Brey & Graham Loomes, 2009. "Trying to estimate a monetary value for qualy," Economic Working Papers at Centro de Estudios Andaluces E2009/03, Centro de Estudios Andaluces.
    6. French, Michael T. & McCollister, Kathryn E. & Sacks, Stanley & McKendrick, Karen & De Leon, George, 2002. "Benefit-cost analysis of a modified therapeutic community for mentally ill chemical abusers," Evaluation and Program Planning, Elsevier, vol. 25(2), pages 137-148, May.
    7. David J. Vanness & W. Ray Kim, 2002. "Bayesian estimation, simulation and uncertainty analysis: the cost-effectiveness of ganciclovir prophylaxis in liver transplantation," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 551-566.
    8. Jonathan Karnon, 2003. "Alternative decision modelling techniques for the evaluation of health care technologies: Markov processes versus discrete event simulation," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 837-848.

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