Economic Evaluation for Health Care Strategies Using Decision-Analytic Modeling
Economic evaluation in health and medicine is an internationally thriving activity that is increasingly used to inform health decision making and allocate scarce health resources. Decision analysis has been defined as a systematic approach to decision making under variability and uncertainty; specifically, decision analysis is a tool that uses an explicit and quantitative structure to describe and analyze complicated decisions in public health and medical care. In the context of economic evaluation, a decision-analytic approach using computational modeling applies mathematical relationships to define a series of possible consequences that would flow from a set of alternative strategies under evaluation. Based on the input parameters into the model, the likelihood of each consequence is expressed in terms of probabilities, and each consequence has a cost and an outcome. The expected cost and expected outcome can be calculated and compared among the strategies being assessed. This presentation will provide an introduction to the concepts of economic evaluation in health care, discuss the decision-analytic simulation modeling techniques including decision analysis trees and state-transition (Markov) models, and describe a research project assessing the cost-effectiveness of implementing a diabetes care model in a military population.