On Estimating Medical Cost and Incremental Cost‐Effectiveness Ratios with Censored Data

Abstract

Summary. Medical cost estimation is very important to health care organizations and health policy makers. We consider cost‐effectiveness analysis for competing treatments in a staggered‐entry, survival‐analysis‐based clinical trial. We propose a method for estimating mean medical cost over patients in such settings. The proposed estimator is shown to be consistent and asymptotically normal, and its asymptotic variance can be obtained. In addition, we propose a method for estimating the incremental cost‐effectiveness ratio and for obtaining a confidence interval for it. Simulation experiments are conducted to evaluate our proposed methods. Finally, we apply our methods to a clinical trial comparing the cost effectiveness of implanted cardiac defibrillators with conventional therapy for individuals at high risk for ventricular arrhythmias.