Power and Sample Size in Cost- Effectiveness Analysis

Abstract

For resource allocation under a constrained budget, optimal decision rules for mutually exclusive programs require that the treatment with the highest incremental cost-effec tiveness ratio (ICER) below a willingness-to-pay (WTP) criterion be funded. This is equivalent to determining the treatment with the smallest net health cost. The designer of a cost-effectiveness study needs to select a sample size so that the power to reject the null hypothesis, the equality of the net health costs of two treatments, is high. A recently published formula derived under normal distribution theory overstates sample- size requirements. Using net health costs, the authors present simple methods for power analysis based on conventional normal and on nonparametric statistical theory. Key words: cost-effectiveness analysis; power; sample size; cost-effectiveness ratios; net health costs; net health benefits; statistical analysis. (Med Decis Making 1999;19: 339-343)