Statistical determination of cost‐effectiveness frontier based on net health benefits

Eugene M. Laska, Morris Meisner, Carole Siegel and Joseph Wanderling

Health Economics, 2002, vol. 11, issue 3, 249-264

Abstract: Statistical methods are given for producing a cost‐effectiveness frontier for an arbitrary number of programs. In the deterministic case, the net health benefit (NHB) decision rule is optimal; the rule funds the program with the largest positive NHB at each λ, the amount a decision‐maker is willing to pay for an additional unit of effectiveness. For bivariate normally distributed cost and effectiveness variables and a specified λ, a statistical procedure is presented, based on the method of constrained multiple comparisons with the best (CMCB), for determining the program with the largest NHB. A one‐tailed t test is used to determine if the NHB is positive. To obtain a statistical frontier in the λ‐NHB plane, we develop a method to produce the region in which each program has the largest NHB, by pivoting a CMCB confidence interval. A one‐sided version of Fieller's theorem is used to determine the region where the NHB of each program is positive. At each λ, the pointwise error rate is bounded by a prespecified α. Upper bounds on the familywise error rate, the probability of an error at any value of λ, are given. The methods are applied to a hypothetical clinical trial of antipsychotic agents. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1002/hec.659

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:11:y:2002:i:3:p:249-264

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().