Estimating cost-effectiveness from claims and registry data with measured and unmeasured confounders

Elizabeth A. Handorf, Daniel F. Heitjan, Justin E. Bekelman, Nandita Mitra

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


The analysis of observational data to determine the cost-effectiveness of medical treatments is complicated by the need to account for skewness, censoring, and the effects of measured and unmeasured confounders. We quantify cost-effectiveness as the Net Monetary Benefit (NMB), a linear combination of the treatment effects on cost and effectiveness that denominates utility in monetary terms. We propose a parametric estimation approach that describes cost with a Gamma generalized linear model and survival time (the canonical effectiveness variable) with a Weibull accelerated failure time model. To account for correlation between cost and survival, we propose a bootstrap procedure to compute confidence intervals for NMB. To examine sensitivity to unmeasured confounders, we derive simple approximate relationships between naïve parameters, assuming only measured confounders, and the values those parameters would take if there was further adjustment for a single unmeasured confounder with a specified distribution. A simulation study shows that the method returns accurate estimates for treatment effects on cost, survival, and NMB under the assumed model. We apply our method to compare two treatments for Stage II/III bladder cancer, concluding that the NMB is sensitive to hypothesized unmeasured confounders that represent smoking status and personal income.

Original languageEnglish (US)
Pages (from-to)2227-2242
Number of pages16
JournalStatistical Methods in Medical Research
Issue number7
StatePublished - Jul 1 2019


  • Economic analysis
  • cost-effectiveness analysis
  • observational studies
  • sensitivity analysis
  • unmeasured confounding

ASJC Scopus subject areas

  • Epidemiology
  • Statistics and Probability
  • Health Information Management


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