Sensitivity Analysis
What is...? series
Supported by sanofi-aventis
New title
Health economics
What is sensitivity analysis?
Matthew Taylor PhD MSc Senior Consultant, York Health Economics Consortium, University of York
G While economic models are a useful tool to aid decision-making in healthcare, there remain several types of uncertainty associated with this method of analysis. G One-way sensitivity analysis allows a reviewer to assess the impact that changes in a certain parameter will have on the model’s conclusions. G Sensitivity analysis can help the reviewer to determine which parameters are the key drivers of a model’s results. G By reporting extensive outputs from sensitivity analysis, modellers are able to consider a wide range of scenarios and, as such, can increase the level of confidence that a reviewer will have in the model. G Probabilistic sensitivity analysis provides a useful technique to quantify the level of confidence that a decision-maker has in the conclusions of an economic evaluation.
For further titles in the series, visit:
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Date of preparation: April 2009
1
NPR09/1109
What is sensitivity analysis?
What is sensitivity analysis?
Economic models
The vast expansion in the number of available healthcare technologies, coupled with constraints placed on healthcare budgets, has increased the importance of decision-making with regards to new and existing health technologies. One method to determine the value for money of an intervention is to develop a ‘cost-effectiveness model’, predicting the costs and health outcomes that are likely to be associated with various different interventions. Models are a useful tool for representing the detailed and complex ‘real world’ with a more simple and understandable structure. While models do not claim to necessarily create an exact replica of the real world, they can be useful in demonstrating the relationships and interactions between various different factors.
Supported by sanofi-aventis
New title
Health economics
What is sensitivity analysis?
Matthew Taylor PhD MSc Senior Consultant, York Health Economics Consortium, University of York
G While economic models are a useful tool to aid decision-making in healthcare, there remain several types of uncertainty associated with this method of analysis. G One-way sensitivity analysis allows a reviewer to assess the impact that changes in a certain parameter will have on the model’s conclusions. G Sensitivity analysis can help the reviewer to determine which parameters are the key drivers of a model’s results. G By reporting extensive outputs from sensitivity analysis, modellers are able to consider a wide range of scenarios and, as such, can increase the level of confidence that a reviewer will have in the model. G Probabilistic sensitivity analysis provides a useful technique to quantify the level of confidence that a decision-maker has in the conclusions of an economic evaluation.
For further titles in the series, visit:
www.whatisseries.co.uk
Date of preparation: April 2009
1
NPR09/1109
What is sensitivity analysis?
What is sensitivity analysis?
Economic models
The vast expansion in the number of available healthcare technologies, coupled with constraints placed on healthcare budgets, has increased the importance of decision-making with regards to new and existing health technologies. One method to determine the value for money of an intervention is to develop a ‘cost-effectiveness model’, predicting the costs and health outcomes that are likely to be associated with various different interventions. Models are a useful tool for representing the detailed and complex ‘real world’ with a more simple and understandable structure. While models do not claim to necessarily create an exact replica of the real world, they can be useful in demonstrating the relationships and interactions between various different factors.