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Activity Number:
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29
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Type:
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Contributed
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Date/Time:
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Sunday, August 3, 2008 : 2:00 PM to 3:50 PM
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Sponsor:
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Section on Health Policy Statistics
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| Abstract - #301983 |
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Title:
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Estimation of Net Present Value of Total Health Care Costs
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Author(s):
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Lin Liu*+ and Joseph C. Gardiner and Zhehui Luo and Charles Given
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Companies:
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Eli Lilly and Company and Michigan State University and RTI International and Michigan State University
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Address:
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, Indianapolis, IN, 46285,
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Keywords:
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Markov Model ; Transition Intensity ; Health States
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Abstract:
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In follow-up studies of health care costs, patients may transit between health states and incur costs at different rates while sojourning in these states. We propose a method for estimating total health care costs that combines a Markov model for transitions between states and a longitudinal regression model for costs. In our model costs emanate from two streams, during sojourn in health states and in transition between states. We estimate net present value (NPV) for costs incurred over a fixed period and derive the asymptotic properties of the estimator. The method is applied to a data set on cancer patients to obtain NPV estimates of total health care cost by cancer stage. Resampling methods provide standard errors. Simulation studies demonstrate that the estimator performs well and can be applied in moderately large data sets with health care costs assessed over time.
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