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.
Learning Objectives: At the conclusion of the session, the participant (learner) in this session will be able to: 1) Describe how to do a cost-effectiveness analysis using a single regression equation.
Keywords: Economic Analysis, Statistics
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: N/A
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.