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Methods for Handling Unobserved Covariates in a Bayesian Update of a Cost-effectiveness Model

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  • Benjamin Thorpe
  • Orlagh Carroll
  • Linda Sharples

Abstract

Health economic decision models often involve a wide-ranging and complicated synthesis of evidence from a number of sources, making design and implementation of such models resource-heavy. When new data become available and reassessment of treatment recommendations is warranted, it may be more efficient to perform a Bayesian update of an existing model than to construct a new model. If the existing model depends on many, possibly correlated, covariates, then an update may produce biased estimates of model parameters if some of these covariates are completely absent from the new data. Motivated by the need to update a cost-effectiveness analysis comparing diagnostic strategies for coronary heart disease, this study develops methods to overcome this obstacle by either introducing additional data or using results from previous studies. We outline a framework to handle unobserved covariates, and use our motivating example to illustrate both the flexibility of the proposed methods and some potential difficulties in applying them.

Suggested Citation

  • Benjamin Thorpe & Orlagh Carroll & Linda Sharples, 2018. "Methods for Handling Unobserved Covariates in a Bayesian Update of a Cost-effectiveness Model," Medical Decision Making, , vol. 38(2), pages 150-162, February.
    • Handle: RePEc:sae:medema:v:38:y:2018:i:2:p:150-162
    DOI: 10.1177/0272989X17736780
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    References listed on IDEAS

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    1. 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, April.
    2. Rita Faria & Manuel Gomes & David Epstein & Ian White, 2014. "A Guide to Handling Missing Data in Cost-Effectiveness Analysis Conducted Within Randomised Controlled Trials," PharmacoEconomics, Springer, vol. 32(12), pages 1157-1170, December.
    3. 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, April.
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