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The use of probabilistic analysis as a means for analyzing uncertainty within economic analysis has grown in popularity in recent years as it has been recognized as the most complete method for propagating uncertainty with respect to input parameters in terms of uncertainty about outcomes of interest. The World Health Organization (WHO) in a series of recent reports and publications have recognized the role of probabilistic analysis in what they term generalized cost-effectiveness analysis. However, there are fundamental problems with the analysis and the interpretation of such analysis as proposed by WHO. This study highlights three specific points for concern and offers constructive criticism by recommending more appropriate approaches. [ABSTRACT FROM AUTHOR]

The cost-effectiveness of new health care technologies is conditional upon who receives what therapy and under what circumstances. Understanding this heterogeneity in cost-effectiveness, health care payers often limit reimbursement of therapies to a more restrictive sub-group of patients than that indicated in a product's licensing. Such limits may be based upon clinical or demographic criteria that are prognostic of costs, outcomes or both. However, there is little guidance on how to estimate and interpret stratified cost-effectiveness analysis. In this paper we present a framework for estimating the benefits from stratification that permits consideration of both the opportunity cost resulting from a lack of adherence with criteria and the efficiency loss associated with incorporating equity concerns. Copyright © 2003 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]