A model is a simplified representation of the real world that is useful in supporting decision-making. In economic evaluation of healthcare interventions modelling synthesizes clinical, epidemiological and economical evidence from appropriate (and different) sources into an evaluation framework to derive an estimate for a specific outcome, for example an incremental cost-effectiveness ratio. A model is based on a specific design/structure, a range of modelling assumptions, and a set of input parameters. Common designs are decision trees, cohort Markov models, micro-simulations and (less frequently) discrete event simulations. Uncertainty surrounding a point estimate of the model outcome can be investigated by conducting sensitivity analysis, based on an understanding of uncertainty in the input parameters tin the model and associated with the model structure.
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