Unlocking the Power of Numbers in Health Economics and Outcomes Research
Learn about the quantitative challenges that are present in HEOR research and how statistics can be used to address these issues.
In health economics and outcomes research, the availability of data is a critical challenge, given obtaining appropriate data, particularly for long-term outcomes and cost statistics, can be difficult. Furthermore, the quality and consistency of data from different sources may change, making it impossible to confirm the results credibility. Complex designs and procedures are frequently used in HEOR studies to answer unique research questions. Choosing the right study design, such as observational studies, randomized controlled trials, or modeling approaches, necessitates significant thought.
The selection of proper statistical methodologies, sample sizes, and endpoints introduces additional obstacles that can have an impact on the validity of the results. Economic modeling is critical in HEOR because it estimates long-term costs, results, and cost-effectiveness. Developing robust economic models, on the other hand, necessitates making assumptions and simplifications that may create uncertainty and bias. Transparency in modeling assumptions and testing model outputs with real-world data is critical but difficult. To address these quantitative issues in HEOR, economists, statisticians, epidemiologists, doctors, and other relevant professionals must collaborate together. To improve the rigor and trustworthiness of HEOR research, it also demands continual methodological breakthroughs, data standardization efforts, and robust statistical studies.
Addressing the Challenges Through Statistics
Quantitative challenges in health economics and outcomes research can be effectively addressed through the use of statistics. Statistics can offer important insights into many facets of healthcare, including patient outcomes, treatment efficacy, and cost-effectiveness, through analyzing and interpreting data.
In order to better inform decisions and enhance healthcare delivery, researchers might use statistical approaches to find patterns, trends, and links in massive datasets. Statistics are essential to the advancement of health economics and outcomes research, whether they are used to assess the effects of a new treatment or the efficacy of a healthcare intervention. When it comes to tackling the quantitative issues that are present in health economics and outcomes research (HEOR), statistical methods are absolutely essential.
Researchers are able to conduct complicated data analyses, evaluate the effects of treatments, and make well-informed judgments with the help of these tools. Statistical methods such as regression analysis, survival analysis, propensity score matching, and Bayesian modeling are helpful in determining associations, controlling for confounders, and estimating treatment effects. Other statistical methods include survival analysis and Bayesian modeling.
In addition, advanced modeling techniques such as cost-effectiveness analysis and decision trees help make it easier to conduct economic analyses and make judgments regarding resource allocation. HEOR studies have the potential to improve the accuracy, reliability, and generalizability of their findings by making use of powerful statistical tools. This will ultimately lead to an improvement in healthcare policy and practice.
Below we explore two of the methods which are pivotal in evaluating the impact of healthcare interventions from an economic perspective.
Markov chains can be an excellent technique when creating cost-effectiveness models. Markov chains can provide light on how different variables affect the total cost of a system by simulating the changes between various states over time. A Markov chain, for instance, can assist in estimating the long-term cost of treating a particular disease by simulating the transition of patients between various health stages.
In Figure 1, we have a comparison of a disease transition probability diagram with and without any treatment intervention. Initially, we can observe that the probability of transition from stage 1 to stage 2 is 0.3, from stage 2 to stage 3 is 0.4, and so on. However, when treatment is introduced after stage 1, we can observe the transition probability from stage 1 to stage 2 reduce to 0.1 and if treatment is continued through stage 2 it reduces transition probability to stage 3 to 0.1 as well thereby affirming the efficacy of the treatment/drug. Hence, we can conclude that the treatment helped reduce the probability of disease progression to its latest stage by 1/3rd and potentially improved the quality-adjusted life year (QALY) of the patient thereby helping us estimate reduction in treatment cost.
Figure 1: Markov process based transition diagram
Additionally, the timing of interventions or the choice of treatment choices are two more decisions linked to resource allocation that can be optimized using Markov chains. Markov chains can help to increase the accuracy and reliability of cost-effectiveness models, which will ultimately result in better decision-making in healthcare and other industries by giving a more thorough understanding of the elements that affect cost-effectiveness.
Bayesian inference can be helpful when evaluating the value of healthcare interventions from a financial perspective. Bayesian inference allows researchers to more accurately predict outcomes and evaluate the efficacy and cost-effectiveness of possible interventions by factoring in prior knowledge and information. This method can be especially helpful when data is scarce or insufficient since it allows researchers to fill in the blanks with what they already know. Researchers can enhance the precision and reliability of their cost-effectiveness assessments by employing Bayesian inference, which in turn leads to improved healthcare decision-making and better patient outcomes. Typically, Bayes' theorem is presented as below:
Bayesian inference is a statistical method that has been gaining popularity in the healthcare industry for evaluating the effectiveness of interventions. Bayesian inference enables a more precise estimation of the likelihood of success for a certain treatment or intervention by taking into account prior information and updatingis a teaching professor at Northeastern University in Boston, teaching classes that make up the Master's program in Data Science. His research in multi-robot systems and reinforcement learning has been published in the top leading journals and conferences in AI. He is also a top writer on the Medium social platform, where he frequently publishes articles on Data Science and Machine Learning. it with fresh evidence.
For example, in a study on the effectiveness of a new drug, Bayesian Inference can take into account not only the raw data but also prior knowledge about the drug's mechanism of action, potential side effects, and interactions with other drugs. This approach can provide more informative and accurate estimates of the drug's efficacy and safety, which can help guide clinical decision-making.
The study of genetic data to find probable illness risk factors is another application of Bayesian inference in healthcare. Bayesian Inference can assist in identifying new targets for intervention and enhancing our comprehension of the underlying mechanisms of disease by combining prior knowledge about the genetic and environmental factors that affect disease risk.
Another example is in the evaluation of healthcare policies and interventions. By incorporating prior data on the effectiveness of similar policies and interventions, policymakers can make more informed decisions about which policies to implement and which to avoid. Overall, Bayesian inference is a powerful tool for evaluating healthcare interventions, allowing for more accurate and informed decision-making.
Additionally, predictive modeling such as linear regression is one of the various ways Bayesian inference may be used in healthcare. Bayesian Inference can assist in making predictions about a patient's health outcomes that are more accurate by taking into account their medical history, symptoms, and other risk factors.
Overall, Bayesian inference is an effective technique for assessing healthcare interventions and can help patients have better results and make better clinical decisions by giving more precise and detailed predictions about the outcomes of their health.
Mayukh Maitra is a Data Scientist at Walmart working in the media mix modeling space with more than 5 years of industry experience. From building Markov process based outcomes research models for healthcare to performing genetic algorithm based media mix modeling, I've been involved in not only making an impact in the lives of people but also taking businesses to the next level through meaningful insights. Prior to joining Walmart, I've had the opportunity to work as a Data Science Manager in GroupM in the ad tech space, Senior Associate of Decision Science in Axtria working in the domain of health economics and outcomes research, and as a Technology Analyst in ZS Associates. In addition to my professional roles, I’ve been part of jury and technical committee for multiple peer reviewed conferences, have had the opportunity to judge multiple tech awards and hackathons as well.