CONFIDENCE-INTERVALS FOR COST-EFFECTIVENESS RATIOS

The problem of variability in computed cost-effectiveness ratios (CERs ) is usually addressed by performing sensitivity analyses to determine the effects on these ratios of plausible ranges of values of input pa rameters. However, the sampling variation that exists in these estimat ed parameters can be utilized to obtain confidence intervals for cost- effectiveness ratios. As cost-effectiveness analysis becomes more wide ly used, new techniques need to be developed for establishing when a d ifference in strategies evaluated is meaningful. A first step is to es tablish the precision of the CER itself. The authors estimate the prec ision of a CER in the context of a statistical model in which the prim ary outcome is survival, with cost and effectiveness defined in terms of the underlying survival distribution (S). Effectiveness (alpha) is measured by life expectancy, restricted to a finite time horizon and d iscounted at a fixed rate r, alpha = integral e(-rt)S(t)dt. Cumulative cost (beta) per patient is regarded as resource utilization and incur red randomly over time depending on the survival experience of the pat ient, beta = integral e(-rt)S(t)dC(t), where C(t) is the total potenti al resources utilized up to time t. Average cost-effectiveness (ACE) o f a single strategy is beta/alpha, and when comparing two strategies, the CER is Delta beta/Delta alpha, the ratio of the incremental cost t o the difference in mean survival. Utilizing the sampling distribution of the Kaplan-Meier estimate of S yields standard errors and confiden ce intervals for ACE and CER. The technique is applied to survival dat a from 218 previously studied patients to assess 95% confidence interv als for the CER and ACE of the implantable cardioverter defibrillator as compared with electrophysiology-guided therapy.