### Abstract

Objectives: We explore the policy implications of probabilistic sensitivity analysis in cost-effectiveness analysis by applying simulation methods to a decision model. Methods: We present the multiway sensitivity analysis results of a study of the cost-effectiveness of vaccination against pneumococcal bacteremia in the elderly. We then execute a probabilistic sensitivity analysis of the cost-effectiveness ratio by specifying posterior distributions for the uncertain parameters in our decision analysis model. In order to estimate probability intervals, we rank the numerical values of the simulated incremental cost-effectiveness ratios (ICERs) to take into account preferences along the cost-effectiveness plane. Results: The 95% probability intervals for the ICER were generally much narrower than the difference between the best case and worst case results from a multiway sensitivity analysis. Although the multiway sensitivity analysis had indicated that, in the worst case, vaccination in the 85 and older age group was not acceptable from a policy standpoint, probabilistic methods indicated that the cost- effectiveness of vaccination was below $50,000 per quality-adjusted life-year in greater than 92% of the simulations and below $100,000 in greater than 95% of the simulations. Conclusions: Probabilistic methods can supplement multiway sensitivity analyses to provide a more comprehensive picture of the uncertainty associated with cost-effectiveness ratios and thereby inform policy decisions.

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

Pages (from-to) | 563-572 |

Number of pages | 10 |

Journal | International Journal of Technology Assessment in Health Care |

Volume | 15 |

Issue number | 3 |

State | Published - Jun 1 1999 |

### Fingerprint

### Keywords

- Cost-effectiveness analysis
- Decision analysis
- Pneumococcal disease
- Simulation

### ASJC Scopus subject areas

- Medicine (miscellaneous)
- Health Informatics
- Health Information Management
- Nursing(all)

### Cite this

*International Journal of Technology Assessment in Health Care*,

*15*(3), 563-572.

**Probabilistic sensitivity analysis in cost-effectiveness : An application from a study of vaccination against pneumococcal bacteremia in the elderly.** / Whang, William; Sisk, Jane E.; Heitjan, Daniel F.; Moskowitz, Alan J.

Research output: Contribution to journal › Article

*International Journal of Technology Assessment in Health Care*, vol. 15, no. 3, pp. 563-572.

}

TY - JOUR

T1 - Probabilistic sensitivity analysis in cost-effectiveness

T2 - An application from a study of vaccination against pneumococcal bacteremia in the elderly

AU - Whang, William

AU - Sisk, Jane E.

AU - Heitjan, Daniel F.

AU - Moskowitz, Alan J.

PY - 1999/6/1

Y1 - 1999/6/1

N2 - Objectives: We explore the policy implications of probabilistic sensitivity analysis in cost-effectiveness analysis by applying simulation methods to a decision model. Methods: We present the multiway sensitivity analysis results of a study of the cost-effectiveness of vaccination against pneumococcal bacteremia in the elderly. We then execute a probabilistic sensitivity analysis of the cost-effectiveness ratio by specifying posterior distributions for the uncertain parameters in our decision analysis model. In order to estimate probability intervals, we rank the numerical values of the simulated incremental cost-effectiveness ratios (ICERs) to take into account preferences along the cost-effectiveness plane. Results: The 95% probability intervals for the ICER were generally much narrower than the difference between the best case and worst case results from a multiway sensitivity analysis. Although the multiway sensitivity analysis had indicated that, in the worst case, vaccination in the 85 and older age group was not acceptable from a policy standpoint, probabilistic methods indicated that the cost- effectiveness of vaccination was below $50,000 per quality-adjusted life-year in greater than 92% of the simulations and below $100,000 in greater than 95% of the simulations. Conclusions: Probabilistic methods can supplement multiway sensitivity analyses to provide a more comprehensive picture of the uncertainty associated with cost-effectiveness ratios and thereby inform policy decisions.

AB - Objectives: We explore the policy implications of probabilistic sensitivity analysis in cost-effectiveness analysis by applying simulation methods to a decision model. Methods: We present the multiway sensitivity analysis results of a study of the cost-effectiveness of vaccination against pneumococcal bacteremia in the elderly. We then execute a probabilistic sensitivity analysis of the cost-effectiveness ratio by specifying posterior distributions for the uncertain parameters in our decision analysis model. In order to estimate probability intervals, we rank the numerical values of the simulated incremental cost-effectiveness ratios (ICERs) to take into account preferences along the cost-effectiveness plane. Results: The 95% probability intervals for the ICER were generally much narrower than the difference between the best case and worst case results from a multiway sensitivity analysis. Although the multiway sensitivity analysis had indicated that, in the worst case, vaccination in the 85 and older age group was not acceptable from a policy standpoint, probabilistic methods indicated that the cost- effectiveness of vaccination was below $50,000 per quality-adjusted life-year in greater than 92% of the simulations and below $100,000 in greater than 95% of the simulations. Conclusions: Probabilistic methods can supplement multiway sensitivity analyses to provide a more comprehensive picture of the uncertainty associated with cost-effectiveness ratios and thereby inform policy decisions.

KW - Cost-effectiveness analysis

KW - Decision analysis

KW - Pneumococcal disease

KW - Simulation

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UR - http://www.scopus.com/inward/citedby.url?scp=0032848757&partnerID=8YFLogxK

M3 - Article

C2 - 10874382

AN - SCOPUS:0032848757

VL - 15

SP - 563

EP - 572

JO - International Journal of Technology Assessment in Health Care

JF - International Journal of Technology Assessment in Health Care

SN - 0266-4623

IS - 3

ER -