A computer program for estimating the re-transformed mean in heteroscedastic two-part models

The population of health care costs is typically skewed, heteroscedastic, and may include zero costs. Without proper accounting for these special distributional features, resulting prediction may be biased, and wrong inferences about the distribution of patients' health care costs may be made. Welsh and Zhou [A.H. Welsh, X.H. Zhou, Estimating the retransformed mean in a heteroscedastic two-part model, J. Stat. Plan. Inference 136 (2006) 860-881] proposed a semi-parametric regression model, which addressed these special features. In this paper we developed a software program to implement this statistical method, which would provide better prediction of health care costs for clinical researchers. Our program computed two mean estimators, their asymptotical standard deviation, confidence interval, and optional bootstrap confidence interval. Our program included user-friendly interactive mode and more efficient and flexible batch mode. It was written in free statistical computing language R and could be run on a wide variety of platforms.