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11:21
Methodology for Establishing a Community-Wide Life Laboratory for Capturing Unobtrusive and Continuous Remote Activity and Health Data
Published on: July 27, 2018
Using cost-effectiveness estimates from survey data to guide commissioning: an application to home care
Julien Forder1, Juliette Malley, Ann-Marie Towers
1University of Kent, Personal Social Services Research Unit (PSSRU), Canterbury, UK; London School of Economics, Personal Social Services Research Unit (PSSRU), London, UK.
Health Economics
|September 17, 2013
Summary
This study introduces a pragmatic method to estimate the cost-effectiveness of care services using survey data. The approach addresses challenges in determining patient quality of life without services, aiding healthcare economic evaluations.
Area of Science:
- Health Economics
- Health Services Research
- Econometrics
Background:
- Estimating the incremental cost-effectiveness of care services is crucial for resource allocation.
- A key challenge is determining the counterfactual quality of life without specific service provision.
- Existing methods may struggle with endogeneity bias due to unobserved factors influencing both service use and outcomes.
Purpose of the Study:
- To describe and trial a pragmatic production function method for estimating the incremental cost-effectiveness of care services from survey data.
- To address the challenge of estimating the counterfactual patient quality of life.
- To mitigate endogeneity bias using instrumental variable estimation.
Main Methods:
- A production function approach was developed to differentiate the impact of service use on quality of life from other factors.
- Instrumental variable (IV) estimation was employed to address potential endogeneity bias.
- The method was applied to survey data from older adults receiving home care as a proof of concept.
Main Results:
- A quality-of-life production function was successfully estimated using survey data.
- The estimated function exhibited expected forms and robust diagnostic indicators.
- The study demonstrated the practical feasibility of the production function method for cost-effectiveness analysis.
Conclusions:
- The described production function method offers a pragmatic approach to estimating the incremental cost-effectiveness of care services.
- While practical advantages exist, the method presents computational complexity and risks of misspecification and bias, especially with IV estimation.
- A recommended strategy involves using this method for preliminary estimates, followed by a full trial if warranted.
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