Statistical models for the analysis of skewed healthcare cost data: a simulation study

Amal Malehi (), Fatemeh Pourmotahari () and Kambiz Angali ()

Health Economics Review, 2015, vol. 5, issue 1, 1-16

Abstract: Skewed data is the main issue in statistical models in healthcare costs. Data transformation is a conventional method to decrease skewness, but there are some disadvantages. Some recent studies have employed generalized linear models (GLMs) and Cox proportional hazard regression as alternative estimators. The aim of this study was to investigate how well these alternative estimators perform in terms of bias and precision when the data are skewed. The primary outcome was an estimation of population means of healthcare costs and the secondary outcome was the impact of a covariate on healthcare cost. Alternative estimators, such as ordinary least squares (OLS) for Ln(y) or Log(y), Gamma, Weibull and Cox proportional hazard regression models, were compared using Monte Carlo simulation under different situations, which were generated from skewed distributions. We found that there was not one best model across all generated conditions. However, GLMs, especially the Gamma regression model, behaved well in the estimation of population means of healthcare costs. The results showed that the Cox proportional hazard model exhibited a poor estimation of population means of healthcare costs and the β 1 even under proportional hazard data. Approximately results are consistent by increasing the sample size. However, increasing the sample size could improve the performance of the OLS-based model. Copyright Malehi et al.; licensee Springer. 2015

Keywords: Skewed data; Generalized linear models (GLMs); Cox proportional hazard regression; Ordinary least squares (OLS) model; Transformation; Healthcare cost; Monte Carlo simulation (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (10)

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DOI: 10.1186/s13561-015-0045-7

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