Scale of interest versus scale of estimation: comparing alternative estimators for the incremental costs of a comorbidity

Health Economics
Anirban BasuPaul J Rathouz

Abstract

We investigate how the scale of estimation in risk-adjustment models for health-care costs affects the covariate effect, where the scale of interest for the covariate effect may be different from the scale of estimation. As an illustrative example, we use claims data to estimate the incremental costs associated with heart failure within one year subsequent to myocardial infarction. Here, the scale of interest for the effect of heart failure on costs is additive. However, traditional methods for modeling costs use predetermined scale of estimation - for example, ordinary least squares (OLS) regression assumes an additive scale while log-transformed OLS and generalized linear models with log-link assume a multiplicative scale of estimation. We compare these models with a new flexible model that lets the data determine the appropriate scale of estimation. We use a variety of goodness-of-fit measures along with a modified Copas test to assess robustness, lack of fit, and over-fitting properties of the alternative estimators. Biases up to 19% in the scale of interest are observed due to the misrepresentation of the scale of estimation. The new flexible model is found to appropriately represent the scale of estimation and less suscep...Continue Reading

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Citations

May 18, 2012·BMC Medical Research Methodology·John L MoranUNKNOWN ANZICS Centre for Outcome and Resource Evaluation (CORE) of the Australian and New Zealand Intensive Care Society (ANZICS)
Jul 6, 2012·Applied Health Economics and Health Policy·Linnea A Polgreen, John M Brooks
Dec 27, 2011·Health Services & Outcomes Research Methodology·Anirban BasuWillard G Manning
Aug 28, 2010·Health Economics·Borislava MihaylovaSimon G Thompson
Nov 19, 2011·Health Services Research·Pinar Karaca-MandicBryan Dowd
Oct 25, 2016·Journal of the Royal Statistical Society. Series A, (Statistics in Society)·Andrew M JonesNigel Rice
Sep 13, 2015·Research in Social & Administrative Pharmacy : RSAP·Insun ChoiDong-Churl Suh
Apr 11, 2015·Alzheimer's & Dementia : the Journal of the Alzheimer's Association·Cynthia L LeibsonRonald C Petersen
Mar 10, 2017·Expert Review of Pharmacoeconomics & Outcomes Research·Anirban BasuChristopher F Bell
Jan 27, 2015·Statistical Methods in Medical Research·Nicholas Mitsakakis, George Tomlinson
Mar 27, 2018·Health Economics·Sungchul Park, Anirban Basu
Jun 19, 2009·Medical Care·Anirban Basu, Willard G Manning
Dec 21, 2017·BMC Medical Research Methodology·Christoph F Kurz
Mar 9, 2018·BMC Health Services Research·Karine MoschettiBruno Gravier
Nov 23, 2016·Yonsei Medical Journal·Chongwon ChangDong Churl Suh
Mar 1, 2012·Journal of Occupational and Environmental Medicine·James P MoriartyJames M Naessens
Jul 22, 2018·Health Economics·Kai YeungSean D Sullivan
May 16, 2019·Journal of Obesity & Metabolic Syndrome·Seung-Mi LeeDong-Churl Suh
Jul 8, 2018·Canadian Journal of Public Health = Revue Canadienne De Santé Publique·Maureen AndersonCordell Neudorf
May 12, 2020·Value in Health : the Journal of the International Society for Pharmacoeconomics and Outcomes Research·Cynthia LeibsonSlavica Katusic
Sep 6, 2021·Alzheimer's & Dementia : the Journal of the Alzheimer's Association·Kirsten Hall LongCynthia Leibson

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