RACE607: CLINICAL ECONOMICS
MODULE V: UNCERTAINTY ANALYSIS AND TORNADO DIAGRAM
DR.ORALUCK PATTANAPRATEEP
Doctor of Philosophy Program in Clinical Epidemiology and Master of Science Program in Medical Epidemiology
Doctor of Philosophy and Master of Science Program in Data Science for Health Care
Section for Clinical Epidemiology and Biostatistics, Faculty of Medicine, Ramathibodi Hospital, Mahidol University
www.ceb-rama.org
Contents Objectives ...... 1
References ...... 1
I. Uncertainty analysis ...... 2
Type of analysis ...... 2
- Tornado diagram ...... 2
II. Using TreePlan® to build a Tornado diagram in a MS Excel® worksheet ...... 4
III. Using TreeAge Pro® to build a Tornado diagram ...... 6
Objectives
Students should be able to:
1. Explain types of uncertainty analysis commonly used in economic evaluation 2. Develop a Tornado diagram and analyze its uncertainty
References
1. Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, and Torrance GW. Methods for the economic evaluation of health care programmes (4th edition). Oxford university press, New York, 2015. 2. Drummond MF and McGuire A. Economic Evaluation in Health Care. Oxford university press, New York, 2001. 3. TreeAge Software, Inc. TreeAge Pro 2016 user’s manual, 2016.
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I. Uncertainty analysis
Uncertainty occurs because many estimates are used in the model. There are various sources including methodological, structural, parameter, and stochastic uncertainties.
Methodological uncertainty reflects uncertainty regarding the analytic methods used within an economic evaluation. For example, uncertainty relating to the discount rate, the method used for the valuation of resources or health outcomes.
Structural uncertainty reflects uncertainty concerning the structure and assumptions used in a model. For example, the method used to extrapolate results beyond the period of measurement.
Parameter uncertainty reflects uncertainty surrounding parameters within a model. For example, the utility associated with a health state.
Stochastic uncertainty reflects uncertainty within a population.
Type of analysis
Sensitivity analysis is the method used to investigate the impact of uncertainty upon costs, consequences, and decisions. Commonly used techniques include one-way and multi-way analysis. These involve substituting different values for one or more of the parameters, assumptions, or methods used in the analysis.
Tornado diagram is a method of one-way analysis and Monte Carlo simulation (Module 7) is a method of multi-way analysis.
- Tornado diagram
A tornado diagram is a series of one-way sensitivities analyzed in a single graph. First, a range of possible values of each variable is assigned. A horizontal bar is then generated, where each bar reflects the values of the main study or interested result. The widest bar is at the top and indicates that the related variable is most critical in terms of its large potential effect on the main study result (figure 1). The middle line in the diagram shows the baseline result.
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Figure 1: an example of a Tornado diagram
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II. Using TreePlan® to build a Tornado diagram in a MS Excel® worksheet
SensIt for sensitivity analysis
SensIt performs what-if model by changing one variable at a time, and plot many type of chart, however in this module, we are interested in only Tornado charts.
Before using the SensIt add in, we must prepare one or more inputs and an output. Each input have to set low, base and high value.
Then, press Ctrl + Shift + S for pop up window to link value to worksheet, and press OK to run the sensitivity analysis.
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Each Percent Swing^2 value indicates how the difference between the expected value and the certain equivalent is affected by the uncertainty of a specific input variable.
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III. Using TreeAge Pro® to build a Tornado diagram
1. Sensitivity analysis
Tornado diagram can be performed by select Analysis Sensitivity analysis Tornado diagram from the menu bar.
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