Heterogeneity in Cost-Effectiveness Analysis: Methods to explore the value of subgroups and individualized care in a collectively funded health system

Cost-effectiveness analysis is increasingly being used to support decisions about the allocation of resources in health systems. However, decisions based on cost-effectiveness are usually made under imperfect and incomplete information. This thesis examines the value of understanding and characterizing heterogeneity for decision-making in healthcare. It proposes a methodological framework for a systematic cost-effectiveness subgroup analysis, providing guidance for identification and selection of subgroups. It suggests that the value of heterogeneity should be examined considering two dimensions: the value of making different decisions in different subgroups with current information (here termed static value); and the value of resolving parameter uncertainty conditional to a particular level of heterogeneity (here termed dynamic value). Finally, it provides empirical demonstration of such a framework through its implementation with a real case study.
The study of heterogeneity for decision-making led to an examination of the policy agenda for individualization of care. This thesis also presents a conceptual framework to address two aspects of the implementation of individualized decisions. First, the implementation of unrestricted choices for treatment responds to a positive value judgement, which is based on the expected health loss (or gain) associated to it. This chapter presents a novel analytical approach to estimating this magnitude, based on the characterization of the joint distribution of potential outcomes. Second, it is acknowledged that implementing individualized decisions also requires a normative judgement. This refers to a broader question in economic evaluation in health, which is the type of values that society seeks to maximise. Three categories are proposed here (paternalist, altruistic and welfarist) that define alternative normative positions. The positive and normative elements of this framework are illustrated with a real case study.
In conclusion, this thesis is a contribution to the development of methods for economic evaluation in healthcare, in particular, for understanding, characterizing and accounting for heterogeneity between members of the population.