Something old, something new, something borrowed, something blue: A framework for the marriage of health econometrics and cost-effectiveness analysis

Jeffrey S Hoch, Andrew H. Briggs, Andrew R. Willan

Research output: Contribution to journalArticle

305 Scopus citations

Abstract

Economic evaluation is often seen as a branch of health economics divorced from mainstream econometric techniques. Instead, it is perceived as relying on statistical methods for clinical trials. Furthermore, the statistic of interest in cost-effectiveness analysis, the incremental cost-effectiveness ratio is not amenable to regression-based methods, hence the traditional reliance on comparing aggregate measures across the arms of a clinical trial. In this paper, we explore the potential for health economists undertaking cost-effectiveness analysis to exploit the plethora of established econometric techniques through the use of the net-benefit framework - a recently suggested reformulation of the cost-effectiveness problem that avoids the reliance on cost-effectiveness ratios and their associated statistical problems. This allows the formulation of the cost-effectiveness problem within a standard regression type framework. We provide an example with empirical data to illustrate how a regression type framework can enhance the net-benefit method. We go on to suggest that practical advantages of the net-benefit regression approach include being able to use established econometric techniques, adjust for imperfect randomisation, and identify important subgroups in order to estimate the marginal cost-effectiveness of an intervention.

Original languageEnglish (US)
Pages (from-to)415-430
Number of pages16
JournalHealth Economics
Volume11
Issue number5
DOIs
StatePublished - 2002
Externally publishedYes

Keywords

  • Cost-effectiveness acceptability curve
  • Cost-effectiveness analysis using regression
  • Econometrics
  • Economic evaluation
  • Net-benefit framework

ASJC Scopus subject areas

  • Nursing(all)
  • Economics and Econometrics
  • Health(social science)
  • Health Professions(all)

Fingerprint Dive into the research topics of 'Something old, something new, something borrowed, something blue: A framework for the marriage of health econometrics and cost-effectiveness analysis'. Together they form a unique fingerprint.

  • Cite this