In search of power and significance: issues in the design and analysis of stochastic cost-effectiveness studies in health care

B. J. O'Brien, M. F. Drummond, R. J. Labelle, A. Willan

Research output: Contribution to journalArticlepeer-review


Application of techniques such as cost-effectiveness analysis (CEA) is growing rapidly in health care. There are two general approaches to analysis: deterministic models based upon assumptions and secondary analysis of retrospective data, and prospective stochastic analyses in which the design of a clinical experiment such as randomised controlled trial is adapted to collect patient-specific data on costs and effects. An important methodological difference between these two approaches is in the quantification and analysis of uncertainty. Whereas the traditional CEA model utilizes sensitivity analysis, the mean-variance data on costs and effects from a prospective trial presents the opportunity to analyze cost-effectiveness using conventional inferential statistical methods. In this study we explored some of the implications of moving economic appraisal away from deterministic models and toward the experimental paradigm. Our specific focus was on the feasibility and desirability of constructing statistical tests of economic hypotheses and estimation of cost-effectiveness ratios with associated 95% confidence intervals. We show how relevant variances can be estimated for this task and discuss the implications for the design and analysis of prospective economic studies.
Original languageUndefined/Unknown
Pages (from-to)150-163
Number of pages14
JournalMedical Care
Issue number2
Publication statusPublished - 1994

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