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A note on confidence intervals in cost-effectiveness analysis

M Tambour¹, N Zethraeus, M Johannesson

¹Stockholm School of Economics.

International Journal of Technology Assessment in Health Care

|October 22, 1998

Summary

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Calculating confidence intervals for cost-effectiveness ratios is complex. This study proposes a simple method by converting costs and benefits into monetary terms, allowing standard statistical techniques for reliable confidence interval estimation.

Area of Science:

Health Economics
Biostatistics
Decision Science

Background:

Estimating confidence intervals for cost-effectiveness ratios presents statistical challenges due to the ratio of random variables.
Existing methods lack consensus, complicating reliable uncertainty assessment in economic evaluations.

Purpose of the Study:

To propose a simplified and statistically sound method for calculating confidence intervals for cost-effectiveness ratios.
To provide a practical approach for decision-making in health economic evaluations.

Main Methods:

Transforming effectiveness units into monetary values using the price per effectiveness unit.
Applying standard statistical techniques to estimate confidence intervals for net monetary benefits.

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Main Results:

The proposed method avoids the complexities of ratio estimation for confidence intervals.
It allows for the direct application of established statistical methods to net benefits.

Conclusions:

This approach offers a straightforward solution for obtaining confidence intervals in cost-effectiveness analysis.
It emphasizes the importance of the price per effectiveness unit for actionable decision rules.