Skip to main content

Advertisement

SpringerLink
Log in

Decision-analytical modelling in health-care economic evaluations

  • Original paper
  • Published:
The European Journal of Health Economics Aims and scope Submit manuscript

Abstract

Objective

Decision-analytical modelling is widely used in health-care economic evaluations, especially in situations where evaluators lack clinical trial data, and in circumstances where such evaluations factor into reimbursement pricing decisions. This paper aims to improve the understanding and use of modelling techniques in this context, with particular emphasis on Markov modelling.

Methods

We provide an overview, in this paper, of the principles and methodological details of decision-analytical modelling. We propose a common route for practicing modelling that accommodates any type of decision-analytical modelling techniques. We use the treatment of chronic hepatitis B as an example to indicate the process of development, presentation and analysis of the Markov model, and discuss the strengths, weaknesses and pitfalls of different approaches.

Conclusions

Good practice of modelling requires careful planning, conduct and analysis of the model, and needs input from modellers and users.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

References

  1. Sun, X., Orlewska, E., Li, Y.P., Cheng, G., Yang, H.: Methods for economic evaluation of marketed medicines II: Conducting primary economic evaluation. Chin J Evid Based Med 6, 218–223 (2006)

    Google Scholar 

  2. Commonwealth Department of Health Housing and Community Services: Guidelines for the Pharmaceutical Industry on Preparation of Submissions to the Pharmaceutical Benefits Advisory Committee. Including Major Submissions Involving Economic Analyses (draft). Canberra (2006)

  3. Food and Drug Administration: Principles for the Review of Pharmacoeconomic Promotion. Rockville: FDA (1995)

    Google Scholar 

  4. Brennan, A., Akehurst, R.: Modelling in health economic evaluation: What is its place? What is its value? Pharmacoeconomics 17(5), 445–459 (2000)

    Article  Google Scholar 

  5. Buxton, M.J., Drummond, M.F., Van Hout, B.A., Prince, R.L., Sheldon, T.A., Szucs, T., Vray, M.: Modelling in economic evaluation: an unavoidable fact of life. Health Econ 6, 217–227 (1997)

    Article  Google Scholar 

  6. Brennan, A., Akehurst, R.: Modelling in health economic evaluation. What is its place? What is its value? Pharmacoeconomics 17, 445–459 (2000)

    Article  Google Scholar 

  7. Sculpher, M., Drummond, M., Buxton, M.: The interactive use of economic evaluation as part of the process of health technology assessment. J Health Serv Res Policy 2, 26–30 (1997)

    Google Scholar 

  8. Chilcott, J.B., Brennan, A., Booth, A., Karnon, J., Tappenden, P.: The role of modelling in prioritising and planning clinical trials. Health Technol Assess 7, 1–125 (2003)

    Google Scholar 

  9. Karnon, J.: Alternative decision modelling techniques for the evaluation of health care technologies: Markov processes versus discrete event simulation. Health Econ 12, 837–848 (2003)

    Article  Google Scholar 

  10. Orlewska, E.: The cost-effectiveness of alternative therapeutic strategies for the management of chronic hepatitis B in Poland. Value Health 5, 405–421 (2002)

    Article  Google Scholar 

  11. Wright, J.L., Wessells, H., Nathens, A.B., Hollingworth, W.: What is the most cost-effective treatment for 1 to 2-cm bulbar urethral strictures: societal approach using decision analysis. Urology 67, 889–893 (2006)

    Article  Google Scholar 

  12. Chambers, M.G., Koch, P., Hutton, J.: Development of a decision-analytic model of stroke care in the United States and Europe. Value Health 5, 82–97 (2002)

    Google Scholar 

  13. Spiegelhalter, D.J., Abrams, K.R., Myles, J.P.: Bayesian Approaches to Clinical Trials and Health-Care Evaluation. London: Wiley (2004)

    Google Scholar 

  14. Breese, J.S.: Construction of belief and decision networks. Comput Intel 8, 624–647 (1992)

    Article  Google Scholar 

  15. Powell, C.: The Delphi technique: myths and realities. J Adv Nurs 41, 376–382 (2003)

    Article  Google Scholar 

  16. van Steenkiste, B.C., Jacobs, J.E., Verheijen, N.M., Levelink, J.H., Bottema B.J.A.M.: A Delphi technique as a method for selecting the content of an electronic patient record for asthma. Int J Med Inf 65, 7–16 (2002)

    Article  Google Scholar 

  17. Salomon, J.A., Murray, C.J.L.: A multi-method approach to measuring health-state valuations. Health Econ 13, 281–290 (2004)

    Google Scholar 

  18. Brazier, J., Deverill, M., Green, C., Harper, R., Booth, A.: A review of the use of health status measures in economic evaluation. Health Technol Assess 3 (9) (1999)

  19. Briggs, A., Sculpher, M., Buxton, M.: Uncertainty in the economic evaluation of health care technologies: the role of sensitivity analysis. Health Econ 3, 95–104 (1994)

    Article  Google Scholar 

  20. Briggs, H.A.: Handling uncertainty in cost-effectiveness models. Pharmacoeconomics 17, 479–500 (2000)

    Article  Google Scholar 

  21. Nuijten, M.J.C.: Incorporation of statistical uncertainty in health economic modelling studies using second-order Monte Carlo simulations. Pharmacoeconomics 22, 759–769 (2004)

    Article  Google Scholar 

  22. Philips, Z., Ginnelly, L., Sculpher, M., Claxton, K., Golder, S., Riemsma, R.: Review of guidelines for good practice in decision-analytic modelling in health technology assessment. Health Technol Assess 8(36) (2004)

  23. Sonnenberg, F.A., Roberts, M.S., Tsevat, J., Wong, J.B., Barry, M., Ken, D.: Toward a peer review process for medical decision analysis models. Med Care 32, JS52–JS64 (1994)

    Article  Google Scholar 

  24. Briggs, A., Sculpher, M.: An introduction to Markov modelling for economic evaluation. Pharmacoeconomics. 13, 397–409 (1998)

    Article  Google Scholar 

  25. Shamir, R., Hernell, O., Leshno, M.: Cost-effectiveness analysis of screening for celiac disease in the adult population. Med Decis Making 26, 282–293 (2006)

    Article  Google Scholar 

  26. CDC Diabetes Cost-effectiveness Group: Cost-effectiveness of intensive glycemic control, intensified hypertension control, and serum cholesterol level reduction for type 2 diabetes. JAMA 87, 2542–2551 (2002)

    Article  Google Scholar 

  27. Canadian Coordinating Office for Health Technology Assessment: Guidelines for economic evaluation of pharmaceuticals: Canada, 3rd edn. Ottawa: Canadian Agency for Drugs and Technologies in Health (2006)

  28. Weistein, M.C., O’Brien, B., Hornberger, J., Jackson, J., Johannesson, M., McCabe, C.: Principles of good practice for decision analytic modeling in health-care evaluation: Report of the ISPOR task force on good research practices-modeling studies. Value Health 6, 9–17 (2003)

    Article  Google Scholar 

  29. Manca, A., Rice, N., Sculpher, M.J., Briggs, A.H.: Assessing generalisability by location in trial-based cost-effectiveness analysis: the use of multilevel models. Health Econ 14, 471–485 (2005)

    Google Scholar 

  30. Pharoah, P.D., Hollingworth, W.: Cost effectiveness of lowering cholesterol concentration with statins in patients with and without pre-existing coronary heart disease: life table method applied to health authority population. BMJ 312, 1443–1448 (1996)

    Google Scholar 

  31. Nuijten, M.J.C., Hardens, M.: Measuring sensitivity in pharmacoeconomic studies: an integration of point-sensitivity and range sensitivity. Pharmacoeconomics 12, 555–564 (1997)

    Article  Google Scholar 

  32. Heitjan, D.F., Li, H.: Bayesian estimation of cost-effectiveness: an importance-sampling approach. Health Econ 13, 191–198 (2004)

    Article  Google Scholar 

  33. Vanness, D.J., Kim, W.R.: Bayesian estimation, simulation and uncertainty analysis: the cost-effectiveness of ganciclovir prophylaxis in liver transplantation. Health Econ 11, 551–566 (2002)

    Article  Google Scholar 

  34. Briggs, A.H., Gray, A.M.: Handling uncertainty when performing economic evaluation of healthcare interventions. Health Technol Assess 3(2) (1999)

  35. Stinnett, A.A., Mullahy, J.: Net health benefits: a new framework for the analysis of uncertainty in cost effectiveness analysis. Med Decis Making 18(Suppl 2), S65–S80 (1998)

    Google Scholar 

  36. Gafni, A., Birch, S.: Guidelines for the adoption of new technologies: a prescription for uncontrolled growth in expenditures and how to avoid the problem. Can Med Assoc J 148, 913–917 (1993)

    Google Scholar 

  37. Fenwick, E., Marshall, D.A., Levy, A.R., Nichol, G.: Using and interpreting cost-effectiveness acceptability curves: An example using data from a trial of management strategies for atrial fibrillation. BMC Health Serv Res 6, 52 (2006)

    Article  Google Scholar 

  38. Sendi, P.P., Briggs, A.H.: Affordability and cost-effectiveness: Decision-making on the cost-effectiveness plane. Health Econ 10, 675–680 (2001)

    Article  Google Scholar 

  39. Bala, M.V., Mauskopf, J.A.: Optimal assignment of treatments to health states using a Markov decision model: an introduction to basic concepts. Pharmacoeconomics 24, 345–354 (2006)

    Article  Google Scholar 

Download references

Acknowledgements

We are grateful to two anonymous reviewers for the helpful comments. We also thank Mike Clarke from the University of Oxford for kind provision of a place for Sun to conduct work on this paper.

Author information

Authors and Affiliations

  1. Department of Clinical Epidemiology and Biostatistics, McMaster University, 1200 Main Street West, HSC 2C7, L8N 3Z5, Hamilton, ON, Canada

    Xin Sun

  2. Chinese Evidence-Based Medicine Center, West China Hospital, Sichuan University, Chengdu, China

    Xin Sun

  3. College of Law and Medical School, Australian National University, Canberra, Australia

    Thomas Faunce

Authors
  1. Xin Sun
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Thomas Faunce
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Xin Sun.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Sun, X., Faunce, T. Decision-analytical modelling in health-care economic evaluations. Eur J Health Econ 9, 313–323 (2008). https://doi.org/10.1007/s10198-007-0078-x

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10198-007-0078-x

Keywords

Search

Navigation