### Abstract

Estimation of the incremental cost-effectiveness ratio (ICER) is difficult for several reasons: treatments that decrease both cost and effectiveness and treatments that increase both cost and effectiveness can yield identical values of the ICER; the ICER is a discontinuous function of the mean difference in effectiveness; and the standard estimate of the ICER is a ratio. To address these difficulties, we have developed a Bayesian methodology that involves computing posterior probabilities for the four quadrants and separate interval estimates of ICER for the quadrants of interest. We compute these quantities by simulating draws from the posterior distribution of the cost and effectiveness parameters and tabulating the appropriate posterior probabilities and quantiles. We demonstrate the method by re-analysing three previously published clinical trials.

Original language | English (US) |
---|---|

Pages (from-to) | 191-201 |

Number of pages | 11 |

Journal | Health Economics |

Volume | 8 |

Issue number | 3 |

DOIs | |

State | Published - May 1 1999 |

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### Keywords

- Bayesian inference
- Clinical trials
- Confidence intervals
- Cost-effectiveness ratios
- Net health benefit

### ASJC Scopus subject areas

- Nursing(all)
- Economics and Econometrics
- Health(social science)
- Health Professions(all)

### Cite this

*Health Economics*,

*8*(3), 191-201. https://doi.org/10.1002/(SICI)1099-1050(199905)8:3<191::AID-HEC409>3.0.CO;2-R

**Bayesian estimation of cost-effectiveness ratios from clinical trials.** / Heitjan, Daniel F.; Moskowitz, Alan J.; Whang, William.

Research output: Contribution to journal › Review article

*Health Economics*, vol. 8, no. 3, pp. 191-201. https://doi.org/10.1002/(SICI)1099-1050(199905)8:3<191::AID-HEC409>3.0.CO;2-R

}

TY - JOUR

T1 - Bayesian estimation of cost-effectiveness ratios from clinical trials

AU - Heitjan, Daniel F.

AU - Moskowitz, Alan J.

AU - Whang, William

PY - 1999/5/1

Y1 - 1999/5/1

N2 - Estimation of the incremental cost-effectiveness ratio (ICER) is difficult for several reasons: treatments that decrease both cost and effectiveness and treatments that increase both cost and effectiveness can yield identical values of the ICER; the ICER is a discontinuous function of the mean difference in effectiveness; and the standard estimate of the ICER is a ratio. To address these difficulties, we have developed a Bayesian methodology that involves computing posterior probabilities for the four quadrants and separate interval estimates of ICER for the quadrants of interest. We compute these quantities by simulating draws from the posterior distribution of the cost and effectiveness parameters and tabulating the appropriate posterior probabilities and quantiles. We demonstrate the method by re-analysing three previously published clinical trials.

AB - Estimation of the incremental cost-effectiveness ratio (ICER) is difficult for several reasons: treatments that decrease both cost and effectiveness and treatments that increase both cost and effectiveness can yield identical values of the ICER; the ICER is a discontinuous function of the mean difference in effectiveness; and the standard estimate of the ICER is a ratio. To address these difficulties, we have developed a Bayesian methodology that involves computing posterior probabilities for the four quadrants and separate interval estimates of ICER for the quadrants of interest. We compute these quantities by simulating draws from the posterior distribution of the cost and effectiveness parameters and tabulating the appropriate posterior probabilities and quantiles. We demonstrate the method by re-analysing three previously published clinical trials.

KW - Bayesian inference

KW - Clinical trials

KW - Confidence intervals

KW - Cost-effectiveness ratios

KW - Net health benefit

UR - http://www.scopus.com/inward/record.url?scp=0032943122&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0032943122&partnerID=8YFLogxK

U2 - 10.1002/(SICI)1099-1050(199905)8:3<191::AID-HEC409>3.0.CO;2-R

DO - 10.1002/(SICI)1099-1050(199905)8:3<191::AID-HEC409>3.0.CO;2-R

M3 - Review article

VL - 8

SP - 191

EP - 201

JO - Health Economics (United Kingdom)

JF - Health Economics (United Kingdom)

SN - 1057-9230

IS - 3

ER -