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Managing structural uncertainty in health economic decision models

Thursday 8 March 2012, 1.30PM to 2.30pm

Speaker(s): Mark Strong, School of Health and Related Research, University of Sheffield

Abstract: It was George Box who famously wrote ‘Essentially, all models are wrong’. Given our limited understanding of the highly complex world in which we live this statement seems entirely reasonable. Why then, in the context of health economic decision modelling, do we often act as if our models are right even if we know that they are wrong?

Imagine we have built a model to predict the costs and health effects of a new treatment, in comparison with an existing treatment. The model will be used by NICE to inform the decision as to whether to recommend the new treatment for use in the NHS.

The inputs to the model are uncertain, and we quantify the effect of this input uncertainty on the model output using Monte Carlo methods. We may even quantify the value of obtaining more precise estimates of the inputs. We present our results to NICE as a fait accompli.

But, if we believe George Box then surely we should consider that our model output, our uncertainty analysis, and our estimates of the value of information are all ‘wrong’ because they are generated by a model that is ‘wrong’! The challenge is to quantify how wrong, and then determine the value of improving the model.

This seminar will explore the problem of structural uncertainty in health economic decision models, along with some suggested approaches to managing this uncertainty.  

Location: Alcuin A019/020

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