Bayesian Methods in Health Economics

Health economic evaluation in practice 183

to be relevant and therefore these four states are considered to be fully repre-

sentative of the clinical pathways that the patients can experience.

The arrows connecting two nodes (i.e. clinical states) indicate that it is

possible to move from the node where the arrow originates to the one which is

reached by it. For example, patients who at time j are in the state In health ,

can either remain healthy, move to the state Disease, or die (i.e. move to

Death), at the next time point (j +1).

These movements are controlled by a corresponding transition probability,

defined for each pair of states (s, s



) by the random quantity λ

ss



. The absence

of an arrow connecting two nodes encodes the assumption that pa