A flexible two-part random effects model for correlated medical costs.

@article{Liu2010AFT,
  title={A flexible two-part random effects model for correlated medical costs.},
  author={Lei Liu and Robert L. Strawderman and Mark E. Cowen and Ya-chen Tina Shih},
  journal={Journal of health economics},
  year={2010},
  volume={29 1},
  pages={110-23}
}
In this paper, we propose a flexible "two-part" random effects model (Olsen and Schafer, 2001; Tooze et al., 2002) for correlated medical cost data. Typically, medical cost data are right-skewed, involve a substantial proportion of zero values, and may exhibit heteroscedasticity. In many cases, such data are also obtained in hierarchical form, e.g., on patients served by the same physician. The proposed model specification therefore consists of two generalized linear mixed models (GLMM), linked… CONTINUE READING

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