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A Note on Confidence Intervals in Cost-Effectiveness Analysis

Published online by Cambridge University Press:  10 March 2009

Magnus Tambour ,
Niklas Zethraeus  and
Magnus Johannesson
Magnus Tambour
Affiliation:
Stockholm School of Economics
Niklas Zethraeus
Affiliation:
Stockholm School of Economics
Magnus Johannesson
Affiliation:
Stockholm School of Economics
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Abstract

How to obtain confidence intervals for cost-effectiveness ratios is complicated by the statistical problems of obtaining a confidence interval for a ratio of random variables. Different approaches have been suggested in the literature, but no consensus has been reached. We propose an alternative simple solution to this problem. By multiplying the effectiveness units by the price per effectiveness unit, both costs and benefits can be expressed in monetary terms and standard statistical techniques can be used to estimate a confidence interval for net benefits. This approach avoids the ratio estimation problem and explicitly recognizes that the price per effectiveness unit has to be known to provide cost-effectiveness analysis with a useful decision rule.

Type
General Essays
Information
International Journal of Technology Assessment in Health Care , Volume 14 , Issue 3 , Summer 1998 , pp. 467 - 471
Copyright
Copyright © Cambridge University Press 1998

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References

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