Analysis of Health Economic Data

  • John R. Cook
  • George W. Carides
  • Erik J. Dasbach


The purpose of this chapter is to demonstrate the application of S-Plus in the analysis of health economic data. We have divided the chapter into two major sections. The first section is intended to provide the reader with a background on the field of pharmacoeconomic evaluation. In this section, we review the significance and relevancy of this type of analysis for health policy decisions as well as discuss the features which make this type of analysis unique with respect to other types of evaluation problems. In the remainder of the chapter, we demonstrate, via a case study, how we used S-Plus in a pharmacoeconomic analysis. This analysis is based on a clinical study comparing the safety and efficacy of two drugs in patients with heart failure.


Incremental Cost Emergency Room Visit Pharmacoeconomic Evaluation Residual Lifetime Life Table Data 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bang, H., and Tsiatis, A.A. (2000). Estimating medical costs with censored data. Biometrika 87, 329–343.MathSciNetzbMATHCrossRefGoogle Scholar
  2. Box, G.E.P. and Jenkins, G.M. (1976). Time Series Analysis: Forecasting and Control. Revised edition. Holden-Day, San Francisco, CA.Google Scholar
  3. Box G.E.P. and Pierce, D.A. (1970). Distribution of residual autocorrelation in autoregressive-integrated moving average time series models. Journal of the American Statistical Association 80, 580–619.MathSciNetGoogle Scholar
  4. Carides, G.W. and Heyse, J.F. (1996). Nonparametric estimation of the parameters of cost distributions in the presence of right-censoring. Proceedings of the Biopharmaceutical Section. American Statistical Association Annual Meetings 1996, pp. 186–191.Google Scholar
  5. Carides G.W., Heyse, J.F., and Iglewicz, B. (2000). A regression-based method for estimating mean treatment cost in the presence of right-censoring. Biostatistics 1, 299–313.zbMATHCrossRefGoogle Scholar
  6. Chaudhary, M.A. and Stearns, S.C. (1996). Estimating confidence intervals for cost effectiveness ratios: An example from a randomized trial. Statistics in Medicine 15, 1447–1458.CrossRefGoogle Scholar
  7. Commonwealth of Australia. (1995). Guidelines for the pharmaceutical industry on preparation of submissions to the Pharmaceutical Benefits Advisory Committee: Including economic analyses. Department of Health and Community Services, Canberra, Australia.Google Scholar
  8. Cook, J.R. and Heyse, J.F. (2000). Use of an angular transformation for ratio estimation in cost-effectiveness analysis. Statistics in Medicine 19, 2989–3003.CrossRefGoogle Scholar
  9. Copley-Merriman, C. and Lair, T.J. (1994). Valuation of medical resource units collected in health economic studies. Clinical Therapeutics 16, 553–568.Google Scholar
  10. Dasbach, E.J., Rich, M.W., Segal, R., Gerth, W.C., Carides, G.W., Cook, J.R., Murray, J.F., Snavely, D.B., and Pitt, B. (1999). The cost-effectiveness of losartan versus captopril in patients with symptomatic heart failure. Cardiology 91, 189–194.CrossRefGoogle Scholar
  11. Desgagne, A., Castilloux, A.M., Angers, J.F., and LeLorier, J. (1998). The use of the bootstrap statistical method for the pharmacoeconomic cost analysis of skewed data. PharmacoEconomics 13, 487–497.CrossRefGoogle Scholar
  12. Drummond, M.F. and Davies, L.M. (1991). Economic analysis alongside clinical trials: Revisiting the methodological principles. International Journal of Technology Assessment in Health Care 7, 561–573.CrossRefGoogle Scholar
  13. Drummond, M.F. and Jefferson, T.O., on behalf of the BMJ Economic Evaluation Working Party (1996). Guidelines for authors and peer reviewers of economic submissions to the BMJ. British Medical Journal 313, 275–283.CrossRefGoogle Scholar
  14. Drummond, M.F. and O’Brien, B.J. (1993). Clinical importance, statistical significance and the assessment of economic and quality of life outcomes. Health Economics 2, 205–212.CrossRefGoogle Scholar
  15. Drummond, M.F., O’Brien, B.J., Stoddart, G.L., and Torrance, G.W. (1997). Methods for Economic Evaluation of Health Care Programmes, 2“1 ed., Oxford University Press, Oxford, UK.Google Scholar
  16. Efron, B. and Tibshirani, R.J. (1993). An Introduction to the Bootstrap. Chapman and Hall, New York.zbMATHGoogle Scholar
  17. Fenn, P., McGuire, A., Phillips, V., Backhouse, M., and Jones, D. (1995). The analysis of censored treatment cost data in economic evaluation. Medical Care 33, 851–863.CrossRefGoogle Scholar
  18. Fieller, E.C. (1954). Some problems in interval estimation. Journal of the Royal Statistical Society Series B 16, 175–185.MathSciNetzbMATHGoogle Scholar
  19. Food and Drug Administration. (1995). Comparing treatments: Safety, effectiveness and cost-effectiveness. Masur Auditorium, National Institutes of Health, Bethesda, MD, March 23–24.Google Scholar
  20. Glick, H. (1995). Strategies for economic assessment during the development of new drugs. Drug Information Journal 29, 1391–1403.CrossRefGoogle Scholar
  21. Gold, M.R., Siegel, J.E., Russell, L.B., and Weinstein, M.C., eds. (1996). Cost- Effectiveness in Health and Medicine. Oxford University Press, New York.Google Scholar
  22. Goldman, L., Gordon, D.J., Rifkind, B.M., Hulley, S.B., Detsky, A.S., Goodman, D.W., Kinosian, B., and Weinstein, M.C. (1992). Cost and health implications of cholesterol lowering. Circulation 85 (5), 1960–1968.CrossRefGoogle Scholar
  23. Haddix, A.C., Teutsch, S.M., Shaffer, P.A., and Dunet, D.O., eds. (1996). Prevention Effectiveness: A Guide to Decision Analysis and Economic Evaluation. Oxford University Press, New York.Google Scholar
  24. Haeussler, E.F. and Paul, R. (1993). Introductory Mathematical Analysis for Business, Economics, and the Life and Social Sciences, 7th ed. Prentice Hall, Englewood Cliffs, NJ, pp. 581–582.zbMATHGoogle Scholar
  25. Heyse, J.F., Cook, J.R., and Drummond, M.F. (2000). Statistical considerations in pharmacoeconomic evaluations. In: Chow, S.C., ed., Encyclopedia of Biopharmaceutical Statistics. Marcel Dekker, New York.Google Scholar
  26. Kassirer, J.P. and Angell, M. (1994). Editorial: The Journal’s policy on cost- effectiveness analysis. New England Journal of Medicine 331, 669–670.CrossRefGoogle Scholar
  27. Lawless, J.F. (1982). Statistical Models and Methods for Lifetime Data. Wiley, New York, p. 26.zbMATHGoogle Scholar
  28. Lin, D.Y., Fewer, E.J., Etzioni, R., and Wax, Y. (1997). Estimating medical costs from incomplete follow-up data. Biometrics 53, 113–128.Google Scholar
  29. Ljung, G.M. and Box, G.E.P. (1978). On a measure of lack of fit in time series models. Biometrika 65, 297–303.zbMATHCrossRefGoogle Scholar
  30. Manning, W.G., Fryback, D.G., and Weinstein, M.C. (1996). Reflecting uncertainty in cost-effectiveness analysis. In: Gold, M.R., Siegel, J.E., Russell, L.B., and Weinstein, M.C., eds., Cost-Effectiveness in Health and Medicine. Oxford University Press, New York, Chap. 8, pp. 247–275.Google Scholar
  31. Mauskopf, J., Schulman, K., Bell, L., and Glick, H. (1996). A strategy for collecting pharmacoeconomic data during Phase IUIII clinical trials. PharmacoEconomics 3, 264–277.CrossRefGoogle Scholar
  32. Mullahy, J. and Manning, W. (1994). Statistical issues in cost-effectiveness analyses. In: Sloan, F., ed., Valuing Healthcare Costs, Benefits, and Effectiveness of Pharmaceuticals and Other Medical Technologies. Cambridge University Press, New York, Chap. 8, pp. 149–241.Google Scholar
  33. National Center for Health Statistics. (1996). Vital Statistics of the United States, 1992, Vol. II, Sec. 6, life tables. Public Health Service, Washington, C.Google Scholar
  34. O’Brien, B.J. and Drummond, M.F. (1994). Statistical versus quantitative significance in the socioeconomic evaluation of medicines. PharmacoEconomics 5, 389–398.CrossRefGoogle Scholar
  35. O’Brien, B.J., Drummond, M.F., LaBelle, R.J., and William, A. (1994). In search of power and significance: Issues in the design and analysis of stochastic cost-effectiveness studies in health care. Medical Care 32, 150–163.CrossRefGoogle Scholar
  36. Ontario Ministry of Health. (1994). Ontario guidelines for economic analysis of pharmaceutical products. Ministry of Health, Toronto, Canada.Google Scholar
  37. Pitt, B., Poole-Wilson, P.A., Segal, R., et al., on behalf of the ELITE II Investigators. (2000). Effect of losartan compared with captopril on mortality in patients with symptomatic heart failure: randomised trial — the Losartan Heart Failure Survival Study–ELITE II. Lancet 355, 582–1587.Google Scholar
  38. Pitt, B., Segal, R., and Martinez, F.A. (1997). Randomised trial of losartan versus captopril in patients over 65 with heart failure (Evaluation of Losartan in the Elderly Study, ELITE). Lancet 349, 747–752.CrossRefGoogle Scholar
  39. Polsky, D., Glick, H.A., Willke, R., and Schulman, R. (1997). Confidence intervals for cost-effectiveness ratios: A comparison of four methods. Health Economics 6, 243–252.CrossRefGoogle Scholar
  40. Schulman, K.A., Llana, T., and Yabroff, K.R. (1996). Economic assessment within the clinical development program. Medical Care 34, DS89–DS95.Google Scholar
  41. Siegel, J.E., Torrance, G.W., Russell, L.B., Luce, B.R., Weinstein, M.C., Gold, M.R., and the members of the Panel on Cost-Effectiveness in Health and Medicine (1997). Guidelines for pharmacoeconomic studies: Recommendations from the panel on cost effectiveness in health and medicine. PharmacoEconomics 11, 159–168.CrossRefGoogle Scholar
  42. Tengs, T.O., Adams, M.E., and Pliskin, J.S. (1995). Five-hundred life-saving interventions and their cost-effectiveness. Risk Analysis 15, 369–390.CrossRefGoogle Scholar
  43. U.S. Department of Health and Human Services. (1997). Health Care Financing Review Statistical Supplement. U.S. Department of Health and Human Services Health Care Financing Administration. Office of Research and Demonstrations, Baltimore, MD, p. 93, Table 33.Google Scholar
  44. Van Hout, B.A., Maiwenn, J.A., Gordon, G.S., and Rutten, F.F.H. (1994). Costs, effects and C/E-ratios alongside a clinical trial. Health Economics 3, 309–319.CrossRefGoogle Scholar
  45. Venables, W.N. and Ripley, B.D. (1999). Modern Applied Statistics with S-PLUS. Third edition. Springer-Verlag, New York.zbMATHGoogle Scholar
  46. Wakker, P. and Klaassen, M.P. (1995). Confidence intervals for ost/effectiveness ratios. Health Economics 4, 373–381.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • John R. Cook
    • 1
  • George W. Carides
    • 1
  • Erik J. Dasbach
    • 1
  1. 1.Merck Research LaboratoriesBlue BellUSA

Personalised recommendations