Bayesian Methods in Health Economics

3

Statistical cost-effectiveness analysis

3.1 Introduction

In the last ten years, health economic evaluations have built on more advanced

statistical decision-theoretic foundations, effectively becoming a branch of ap-

plied statistics (Briggs et al., 2006; Willan and Briggs, 2006), increasingly often

under a Bayesian statistical approach (O’Hagan and Stevens, 2001; O’Hagan

et al., 2001; Parmigiani, 2002b; Spiegelhalter and Best, 2003; Spiegelhalter

et al., 2004).

As suggested by Spiegelhalter et al. (2004), this can be ascribed to the

fact that “the subjective interpretation of probability is essential, since the

expressions of uncertainty required fo