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Estimation of copula-based models for lifetime medical costs

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  • Xiao Zhao
  • Xian Zhou

Abstract

Medical cost data are recorded through medical care and the cost is always related to some sojourn in the health status of the patient. The total medical cost accumulated in the entire lifetime of a life is of great interest to the health insurance industry and government policy makers. In this paper, we develop a new method to assess the lifetime medical cost up to the death time by incorporating the dynamics of change in the health status of the patient based on incomplete data. A copula model is proposed to fit the cost lifetime medical data subject to a terminal event (death). A two-stage estimation procedure is applied to draw the statistical inference of the marginals and the copula parameters. The asymptotic properties of the estimators are established, and a simulation is performed to evaluate the proposed model and estimation methods. Copyright The Institute of Statistical Mathematics, Tokyo 2015

Suggested Citation

  • Xiao Zhao & Xian Zhou, 2015. "Estimation of copula-based models for lifetime medical costs," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 67(5), pages 897-915, October.
    • Handle: RePEc:spr:aistmt:v:67:y:2015:i:5:p:897-915
    DOI: 10.1007/s10463-014-0477-6
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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. Joe, Harry, 2005. "Asymptotic efficiency of the two-stage estimation method for copula-based models," Journal of Multivariate Analysis, Elsevier, vol. 94(2), pages 401-419, June.
    4. Hofert, Marius, 2008. "Sampling Archimedean copulas," Computational Statistics & Data Analysis, Elsevier, vol. 52(12), pages 5163-5174, August.
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