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Inference for the Cost-Effectiveness Acceptability Curve and Cost-Effectiveness Ratio

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  • Anthony O’Hagan
  • John Stevens
  • Jacques Montmartin

Abstract

The aim of this article is to consider Bayesian and frequentist inference methods for measures of incremental cost effectiveness in data obtained via a clinical trial. The most useful measure is the cost-effectiveness (C/E) acceptability curve. Recent publications on Bayesian estimation have assumed a normal posterior distribution, which ignores uncertainty in estimated variances, and suggest unnecessarily complicated methods of computation. We present a simple Bayesian computation for the C/E acceptability curve and a simple frequentist analogue. Our approach takes account of errors in estimated variances, resulting in calculations that are based on distributions rather than normal distributions. If inference is required about theC/E ratio,we argue that the standard frequentist procedures give unreliable or misleading inferences, and present instead a Bayesian interval. Copyright Adis International Limited 2000

Suggested Citation

  • Anthony O’Hagan & John Stevens & Jacques Montmartin, 2000. "Inference for the Cost-Effectiveness Acceptability Curve and Cost-Effectiveness Ratio," PharmacoEconomics, Springer, vol. 17(4), pages 339-349, April.
    • Handle: RePEc:spr:pharme:v:17:y:2000:i:4:p:339-349
    DOI: 10.2165/00019053-200017040-00004
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    References listed on IDEAS

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    Cited by:

    1. Simon Eckermann & Andrew Willan, 2011. "Presenting Evidence and Summary Measures to Best Inform Societal Decisions When Comparing Multiple Strategies," PharmacoEconomics, Springer, vol. 29(7), pages 563-577, July.
    2. Yeow Meng Thum, 2003. "Measuring Progress Toward a Goal," Sociological Methods & Research, , vol. 32(2), pages 153-207, November.
    3. Anthony O'Hagan & Matt Stevenson & Jason Madan, 2007. "Monte Carlo probabilistic sensitivity analysis for patient level simulation models: efficient estimation of mean and variance using ANOVA," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1009-1023.
    4. Caterina Conigliani, 2008. "A bayesian model averaging approach with non-informative priors for cost-effectiveness analyses in health economics," Departmental Working Papers of Economics - University 'Roma Tre' 0094, Department of Economics - University Roma Tre.
    5. Niklas Zethraeus & Magnus Johannesson & Bengt Jönsson & Mickael Löthgren & Magnus Tambour, 2003. "Advantages of Using the Net-Benefit Approach for Analysing Uncertainty in Economic Evaluation Studies," PharmacoEconomics, Springer, vol. 21(1), pages 39-48, January.
    6. Dirk Müller & Eleanor Pullenayegum & Afschin Gandjour, 2015. "Impact of small study bias on cost-effectiveness acceptability curves and value of information analyses," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(2), pages 219-223, March.
    7. Jack Dowie, 2004. "Why cost‐effectiveness should trump (clinical) effectiveness: the ethical economics of the South West quadrant," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 453-459, May.
    8. Mohan V. Bala & Gary A. Zarkin & Josephine Mauskopf, 2008. "Presenting results of probabilistic sensitivity analysis: the incremental benefit curve," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 435-440, March.
    9. C. Armero & G. García‐Donato & A. López‐Quílez, 2010. "Bayesian methods in cost–effectiveness studies: objectivity, computation and other relevant aspects," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 629-643, June.
    10. Caterina Conigliani & Andrea Tancredi, 2006. "Comparing parametric and semi-parametric approaches for bayesian cost-effectiveness analyses in health economics," Departmental Working Papers of Economics - University 'Roma Tre' 0064, Department of Economics - University Roma Tre.
    11. Caterina Conigliani & Andrea Tancredi, 2009. "A Bayesian model averaging approach for cost‐effectiveness analyses," Health Economics, John Wiley & Sons, Ltd., vol. 18(7), pages 807-821, July.

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