The most commonly cited drawback to using the internal rate of return to evaluate deterministic cash flow streams is the possibility of multiple conflicting internal rates, or no internal rate at all. We claim, however, that contrary to current consensus, multiple or nonexistent internal rates are not contradictory, meaningless or invalid as rates of… (More)
OBJECTIVE To quantify the trade-off between the expected increased short- and long-term costs and the expected increase in quality-adjusted life expectancy (QALE) associated with total hip arthroplasty (THA) for persons with functionally significant hip osteoarthritis. DESIGN A cost-effectiveness study was performed from the societal perspective by… (More)
Formulas are derived for the variance of sample means associated with finite state Markov processes. Results are presented to illustrate the use of the formulas for example processes. The formulas can be used to evaluate proposed statistical methods for estimating the variance of a sample mean obtained from simulation experiments.
In this paper we present a review of stochastic trees, a convenient modeling approach for medical treatment decision analyses. Stochastic trees are a generalization of decision trees that incorporate useful features from continuous-time Markov chains. We also discuss StoTree, a freely available software tool for the formulation and solution of stochastic… (More)
Suppose you must choose between two pieces of information A and B. In the absence of cost, you would prefer to obtain A rather than B, and in fact would be willing to take more risk to obtain A than B. Nevertheless, you would pay more money for B than for A. Are your preferences consistent with expected utility? The answer is yes; they may very well be. We… (More)
Methods for evaluating health quality are central to medical decision analyses. The most important such method is the quality-adjusted life year (or QALY), in which a patient's length of life is given weight proportional to quality of health. QALYs have become ubiquitous in medical cost-effectiveness as a measure of preference for health outcomes. However,… (More)