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    Methods for estimating subgroup effects in cost-effectiveness analyses that use observational data

    Kreif, N. and Grieve, R. and Radice, Rosalba and Ramsahai, R. and Sadique, Z. and Sekhon, J.S. (2012) Methods for estimating subgroup effects in cost-effectiveness analyses that use observational data. Medical Decision Making 32 (6), pp. 750-763. ISSN 0272-989X.

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    Decision makers require cost-effectiveness estimates for patient subgroups. In nonrandomized studies, propensity score (PS) matching and inverse probability of treatment weighting (IPTW) can address overt selection bias, but only if they balance observed covariates between treatment groups. Genetic matching (GM) matches on the PS and individual covariates using an automated search algorithm to directly balance baseline covariates. This article compares these methods for estimating subgroup effects in cost-effectiveness analyses (CEA). The motivating case study is a CEA of a pharmaceutical intervention, drotrecogin alfa (DrotAA), for patient subgroups with severe sepsis (n = 2726). Here, GM reported better covariate balance than PS matching and IPTW. For the subgroup at a high level of baseline risk, the probability that DrotAA was cost-effective ranged from 30% (IPTW) to 90% (PS matching and GM), at a threshold of £20 000 per quality-adjusted life-year. We then compared the methods in a simulation study, in which initially the PS was correctly specified and then misspecified, for example, by ignoring the subgroup-specific treatment assignment. Relative performance was assessed as bias and root mean squared error (RMSE) in the estimated incremental net benefits. When the PS was correctly specified and inverse probability weights were stable, each method performed well; IPTW reported the lowest RMSE. When the subgroup-specific treatment assignment was ignored, PS matching and IPTW reported covariate imbalance and bias; GM reported better balance, less bias, and more precise estimates. We conclude that if the PS is correctly specified and the weights for IPTW are stable, each method can provide unbiased cost-effectiveness estimates. However, unlike IPTW and PS matching, GM is relatively robust to PS misspecification.


    Item Type: Article
    Keyword(s) / Subject(s): statistical methods, econometric methods, cost-effectiveness, analysis, observational data, subgroup analysis, propensity scores
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Sarah Hall
    Date Deposited: 15 Apr 2014 14:31
    Last Modified: 02 Aug 2023 17:10


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