Techniques for estimating health care costs with censored data: an overview for the health services researcher

OBJECTIVE The aim of this study was to review statistical techniques for estimating the mean population cost using health care cost data that, because of the inability to achieve complete follow-up until death, are right censored. The target audience is health service researchers without an advanced statistical background. METHODS Data were sourced from longitudinal heart failure costs from Ontario, Canada, and administrative databases were used for estimating costs. The dataset consisted of 43,888 patients, with follow-up periods ranging from 1 to 1538 days (mean 576 days). The study was designed so that mean health care costs over 1080 days of follow-up were calculated using naïve estimators such as full-sample and uncensored case estimators. Reweighted estimators - specifically, the inverse probability weighted estimator - were calculated, as was phase-based costing. Costs were adjusted to 2008 Canadian dollars using the Bank of Canada consumer price index (http://www.bankofcanada.ca/en/cpi.html). RESULTS Over the restricted follow-up of 1080 days, 32% of patients were censored. The full-sample estimator was found to underestimate mean cost ($30,420) compared with the reweighted estimators ($36,490). The phase-based costing estimate of $37,237 was similar to that of the simple reweighted estimator. CONCLUSION The authors recommend against the use of full-sample or uncensored case estimators when censored data are present. In the presence of heavy censoring, phase-based costing is an attractive alternative approach.