CHAPTER 5

PROBABILITIES AND MODELS

OVERVIEW

IF COST-EFFECTIVENESS analysis were a building, probabilities would be its scaffolding. Probabilities indicate how likely subjects are to become ill, how likely subjects are to see a doctor, and so on. Therefore, they provide a framework for deciding how much an intervention will cost and how effective it will be.

A decision analysis model is essentially a series of values (such as costs or HRQL scores) bound together by a series of probabilities. In this chapter, you will get a general overview of probabilities and then begin the process of learning how they tie together to form a decision analysis model.

PROBABILITIES

So far, we've managed to get our research question in order and have created ...

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