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Parametric estimation of medical care costs under conditions of censoring

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  • Raikou, Maria
  • McGuire, Alistair

Abstract

This paper is concerned with a set of parametric estimators that attempt to provide consistent estimates of average medical care costs under conditions of censoring. The main finding is that incorporation of the inverse of the probability of an individual not being censored in the estimating equations is instrumental in deriving unbiased cost estimates. The success of the approach is dependent on the amount of available information on the cost history process. The value of this information increases as the degree of censoring increases.

Suggested Citation

  • Raikou, Maria & McGuire, Alistair, 2009. "Parametric estimation of medical care costs under conditions of censoring," LSE Research Online Documents on Economics 28857, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:28857
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    File URL: http://eprints.lse.ac.uk/28857/
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    References listed on IDEAS

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    1. Etzioni, Ruth D. & Feuer, Eric J. & Sullivan, Sean D. & Lin, Danyu & Hu, Chengcheng & Ramsey, Scott D., 1999. "On the use of survival analysis techniques to estimate medical care costs," Journal of Health Economics, Elsevier, vol. 18(3), pages 365-380, June.
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    3. Williams, Alan & Cookson, Richard, 2000. "Equity in health," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 35, pages 1863-1910, Elsevier.
    4. Raikou, M. & McGuire, A., 2004. "Estimating medical care costs under conditions of censoring," Journal of Health Economics, Elsevier, vol. 23(3), pages 443-470, May.
    5. Weinstein, Milton & Zeckhauser, Richard, 1973. "Critical ratios and efficient allocation," Journal of Public Economics, Elsevier, vol. 2(2), pages 147-157, April.
    6. Sloan,Frank A. (ed.), 1996. "Valuing Health Care," Cambridge Books, Cambridge University Press, number 9780521576468, January.
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    Cited by:

    1. Monnickendam, Giles & de Asmundis, Carlo, 2018. "Why the distribution matters: using discrete event simulation to demonstrate the impact of the distribution of procedure times on hospital operating room utilisation and average procedure cost," LSE Research Online Documents on Economics 86483, London School of Economics and Political Science, LSE Library.
    2. Maria Raikou & Alistair McGuire, 2012. "Estimating Costs for Economic Evaluation," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 43, Edward Elgar Publishing.

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    More about this item

    Keywords

    Cost of medical care; Censoring; Survival analysis; Regression analysis; Health care economic evaluation.;
    All these keywords.

    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General

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