Accounting for Uncertainty in Health Economic Modelling

Uncertainty is always present in health economic models as they aim to simplify real-world scenarios. Therefore, it is important to account for the impact this has on the results when generating health economic evidence.

Uncertainty in health economic modelling can arise from a number of sources:

Parameters: specifically surrounding the input values due to sampling variation or choice of inputs.
Methodology: uncertainty stemming from decisions made when building an evaluation for example the model time horizon or evaluation perspective.
Model structure: uncertainty is introduced when making necessary assumptions to underlie the model. For example, the number and type of health states to include in a Markov model.

Best Practices

Align with internationally recognised standards.

Sensitivity analyses allow us to deal with uncertainty in evaluations, as recommended by the NICE reference case. There are two types of sensitivity analyses, deterministic sensitivity analysis and probabilistic. The deterministic approach varies the inputs of individual parameters in the model either one at a time (one-way sensitivity analysis) or more than one at a time (multi-way sensitivity analysis). Results of the one-way deterministic sensitivity analysis are presented in a tornado plot, providing an overall visual representation of which parameters the results of the model are most affected by. The probabilistic approach assigns distributions to individual parameters, the model is run then ~N times e.g. 1000, each time a different input value for the parameter is pulled at random from its assigned distribution. Hardian builds models and validates them according to academic best practice guidance.

Case Study

How Hardian solves the problem.

Testing for uncertainty is a key stage of every health economic modelling project at Hardian, typically conducted towards the end of the projects. All our modelling work comes with a final phase of uncertainty and sensitivity analysis, giving you piece of mind that your economic value proposition is robust to variation.

Your health economics team

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