Multiple regression of cost data: use of generalised linear models
Abstract
Objective: Choosing an appropriate method for regression analyses of cost data is problematic because it must focus on population means while taking into account the typically skewed distribution of the data. In this paper we illustrate the use of generalised linear models for regression analysis of cost data. Methods: We consider generalised linear models with either an identity link function (providing additive covariate effects) or log link function (providing multiplicative effects), and with gaussian (normal), overdispersed poisson, gamma, or inverse gaussian distributions. These are applied to estimate the treatment effects in two randomised trials adjusted for baseline covariates. Criteria for choosing an appropriate model are presented. Results: In both examples considered, the gaussian model fits poorly and other distributions are to be preferred. When there are variables of prognostic importance in the model, using different distributions can materially affect the estimates obtained; it may also be possible to discriminate between additive and multiplicative covariate effects. Conclusions: Generalised linear models are attractive for the regression of cost data because they provide parametric methods of analysis where a variety of non-normal distributions can be specified and the way covariates act can be altered. Unlike the use of data transformation in ordinary least-squares regression, generalised linear models make inferences about the mean cost directly.
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Cost data and QALYs will be analysed using generalised linear models to account for non-normal distributions.
“Cost data and QALYs will be analysed using generalised linear models to account for non-normal distributions.83”
From Development, evaluation and implementation of a digital behavioural health treatment for chronic pain: study protocol of the multiphase DAHLIA project (2022) · cites this paper as [83]
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“• The fit of models estimated through a maximum likelihood method can be assessed using loglikelihood based fit statistics, for example, the Akaike Information Criterion or the Bayesian Information Criterion (Barber and Thompson, 2004; Jackson et al., 2011).”
MethodHealthcare Use, Social Burden and Costs of Children With and Without ADHD in Flanders, Belgium
Ridder, A. D., & Graeve, D. D. (2006) · Clinical Drug Investigation · doi:10.2165/00044011-200626020-00003 · Cited by 51 · see citing works
Changes in health care costs before and after smoking cessation
Fishman, P. A., Thompson, E., Merikle, E. P., & Curry, S. J. (2006) · Nicotine & Tobacco Research · doi:10.1080/14622200600670314 · Cited by 51 · see citing works
METHODS FOR COVARIATE ADJUSTMENT IN COST‐EFFECTIVENESS ANALYSIS THAT USE CLUSTER RANDOMISED TRIALS
Gomes, M., Grieve, R., Nixon, R. M., Ng, E. S. W., Carpenter, J. R., & Thompson, S. G. (2012) · Health Economics · doi:10.1002/hec.2812 · Cited by 50 · see citing works
Self-citationMazumdar, M., Lin, J.-Y., Zhang, W., Li, L., Liu, M., Dharmarajan, K., Sanderson, M., Isola, L., & Hu, L.-Y. (2020) · BMC Health Services Research · doi:10.1186/s12913-020-05148-y · Cited by 40 · see citing works
“Gamma GLM is often used in practice to capture these features [6, 7].”
MethodConducting Trial-Based Economic Evaluations Using R: A Tutorial
Ben, Â. J., van Dongen, J. M., Alili, M. E., Eßer, J., Broulíková, H. M., & Bosmans, J. E. (2023) · PharmacoEconomics · doi:10.1007/s40273-023-01301-7 · Cited by 48 · see citing works
“gamma, Gaussian) can be specified [61].”
Stroupe, K. T., Teal, E., Tu, W., Weiner, M., & Murray, M. D. (2006) · Pharmacotherapy The Journal of Human Pharmacology and Drug Therapy · doi:10.1592/phco.26.6.779 · Cited by 48 · see citing works
“Deyo-Charlson Comorbidity Index score 0 6145 (60) 1380 (28) 1 3132 (30) 1687 (34) 2 648 (6) 955 (20) 3 209 (2) 440 (9) > 3 175 (2) 435 (9)”
Kreif, N., Grieve, R., Radice, R., & Sekhon, J. S. (2013) · Health Services and Outcomes Research Methodology · doi:10.1007/s10742-013-0109-2 · Cited by 48 · see citing works
“2.1 Regression adjustment Incremental cost, effectiveness and cost-effectiveness can be modelled with simple generalised linear models (GLM) (Barber and Thompson 2004), two-part models (Buntin and Zaslavsky 2004; Basu 2011), semi-parametric methods such as extended estimating equations (Basu and…”
BackgroundMethodInfluentialRauf, A. A., Long, K. H., Gajic, O., Anderson, S. S., Swaminathan, L., & Albright, R. C. (2008) · Journal of Intensive Care Medicine · doi:10.1177/0885066608315743 · Cited by 48 · see citing works
“Generalized linear modeling techniques were used to assess costs and LOS to account for the nonnegative and typically skewed nature of these economic endpoints.(22) Cost models assumed a logarithmic link function and a γ or Poisson distribution based on the modified Park test recommended by Manning and Mullahy.”
MethodPoremski, D., Distasio, J., Hwang, S. W., & Latimer, E. A. (2015) · The Canadian Journal of Psychiatry · doi:10.1177/070674371506000902 · Cited by 47 · see citing works
The economic burden of complications during percutaneous coronary intervention
Jacobson, K. M., Long, K. H., McMurtry, E., Naessens, J. M., & Rihal, C. S. (2007) · BMJ Quality & Safety · doi:10.1136/qshc.2006.019331 · Cited by 47 · see citing works
Esposti, L. D., Esposti, D., Buda, Saragoni, & Sturani, A. (2013) · ClinicoEconomics and Outcomes Research · doi:10.2147/ceor.s41846 · Cited by 46 · see citing works
“A generalized linear model with an identity link function and a gamma distribution was used to estimate the association between health care costs and level of glycemic control.(21) To control for confounding, we included in the model factors including age, gender, Charlson comorbidity index, coexisting illnesses (such…”
Direct medical cost associated with diabetic retinopathy severity in type 2 diabetes in Singapore
Zhang, X., Low, S. K., Neelam, K., Wang, J., Ang, K., Yeo, D., Yip, C. C., Subramaniam, T., Sum, C. F., & Lim, S. C. (2017) · PLoS ONE · doi:10.1371/journal.pone.0180949 · Cited by 47 · see citing works
Breitfelder, A., Wenig, C. M., Wolfenstetter, S. B., Rzehak, P., Menn, P., John, J., Leidl, R., Bauer, C. P., Koletzko, S., Röder, S. W., et al. (2011) · Economics & Human Biology · doi:10.1016/j.ehb.2011.02.001 · Cited by 45 · see citing works
Trends in Mortality and Medical Spending in Patients Hospitalized for Community-Acquired Pneumonia
Ruhnke, G. W., Perraillon, M. C., Kitch, B. T., & Cutler, D. (2010) · Medical Care · doi:10.1097/mlr.0b013e3181f38006 · Cited by 45 · see citing works
“We also performed 2 generalized linear model (GLM) regressions to analyze cost trends, both of which specified cost as the dependent variable, using a gamma distribution and log-link function.(20) Because of a nonrandom pattern of residuals in the highest-cost 1% of hospitalizations, this 1% was eliminated from the an…”
MethodBrabyn, S., Araya, R., Barkham, M., Bower, P., Cooper, C., Duarte, A., Kessler, D., Knowles, S. E., Lovell, K., Littlewood, E., et al. (2016) · Health Technology Assessment · doi:10.3310/hta20890 · Cited by 36 · see citing works
“The regression model applied for the incremental analysis of costs in the base case was a generalised linear model.(34) This type of model was preferred to an OLS model, as cost data tend to be heavily skewed and follow a non-normal distribution, which leads to violations of the OLS assumptions.”
MethodDEEP Study: Indirect and Out-of-pocket Costs of Persistent Orofacial Pain
Breckons, M., Shen, J., Bunga, J. J., Vale, L. D., & Durham, J. (2018) · Journal of Dental Research · doi:10.1177/0022034518773310 · Cited by 45 · see citing works
“As appropriate for cost data with a skewed distribution (Barber and Thompson 2004), generalized linear models (GLMs) with a log-link function were used to examine the relationship between dichotomized GCPS status and out-of-pocket costs and indirect costs, controlling for demographic and socioeconomic factors, includi…”
MethodLeininger, B. D., McDonough, C. M., Evans, R., Tosteson, T. D., Tosteson, A. N. A., & Brønfort, G. (2016) · The Spine Journal · doi:10.1016/j.spinee.2016.06.014 · Cited by 44 · see citing works
“Generalized estimating equations specifying a poisson distribution and identity link were used to estimate mean costs over the year.[40, 41] Separate models were performed to estimate cost rates for medication use (one week) and lost productivity (one month).”
MethodCost and cost-effectiveness of cardiac surgery in elderly patients
Gelsomino, S., Lorusso, R., Livi, U., Masullo, G., Lucà, F., Maessen, J. G., & Gensini, G. F. (2011) · Journal of Thoracic and Cardiovascular Surgery · doi:10.1016/j.jtcvs.2011.02.013 · Cited by 43 · see citing works
Shah, S. S., Hall, M., Newland, J. G., Brogan, T. V., Farris, R. W. D., Williams, D. J., Larsen, G. Y., Fine, B. R., Levin, J. E., Wagener, J. S., et al. (2011) · Journal of Hospital Medicine · doi:10.1002/jhm.872 · Cited by 43 · see citing works
Moore, P. V., Bennett, K., & Normand, C. E. M. (2017) · Social Science & Medicine · doi:10.1016/j.socscimed.2017.04.038 · Cited by 43 · see citing works
“…þ X35 t¼1 gtMtD The use of a log link function in the GLM means the coefficients act multiplicatively on the mean, by taking the exponential they can be expressed as the percentage increase in the mean monthly medication expenditure per unit increase in the covariate (Barber and Thompson, 2004).”
MethodDakin, H., & Gray, A. M. (2017) · Statistics in Medicine · doi:10.1002/sim.7322 · Cited by 43 · see citing works
“6 Transforming costs and QALYs prior to analysis means that coefficients, statistical inference and predictions are on the transformed scale and are not applicable to the natural scale [3,31,34].”
BackgroundDuval, S., Long, K. H., Roy, S. S., Oldenburg, N. C., Harr, K., Fee, R. M., Sharma, R. R., Alesci, N. L., & Hirsch, A. T. (2015) · Journal of the American College of Cardiology · doi:10.1016/j.jacc.2015.06.1349 · Cited by 42 · see citing works
“Generalized linear modeling assessed the impact of smoking status on total costs (27), and used a logarithmic link function with a gamma distribution on the basis of the modified Park test (28).”
MethodGamma shape mixtures for heavy-tailed distributions
Venturini, S., Dominici, F., & Parmigiani, G. (2008) · The Annals of Applied Statistics · doi:10.1214/07-aoas156 · Cited by 42 · see citing works
“(2002), Buntin and Zaslavsky (2004), Barber and Thompson (2004), Manning and Mullahy (2005), Powers et al. (2005), Dodd et al.”
Alili, M. E., van Dongen, J. M., Eßer, J., Heymans, M. W., van Tulder, M. W., & Bosmans, J. E. (2022) · Health Economics · doi:10.1002/hec.4603 · Cited by 41 · see citing works
“Regression-based adjustment (e.g. OLS regression, seemingly unrelated regression, a generalized linear model) Barber and Thompson (2004); Gabrio et al.”
BackgroundMethodInfluentialPetta, S., Ting, J., Saragoni, S., Esposti, L. D., Shreay, S., Petroni, M. L., & Marchesini, G. (2020) · Nutrition Metabolism and Cardiovascular Diseases · doi:10.1016/j.numecd.2020.02.016 · Cited by 41 · see citing works
Aspvall, K., Sampaio, F., Lenhard, F., Melin, K., Norlin, L., Serlachius, E., Mataix-Cols, D., & Andersson, E. (2021) · JAMA Network Open · doi:10.1001/jamanetworkopen.2021.18516 · Cited by 39 · see citing works
Wenig, C. M. (2010) · The European Journal of Health Economics · doi:10.1007/s10198-010-0278-7 · Cited by 39 · see citing works
“The effect of independent variables on total costs was analysed using a generalised linear mixed regression model (GLIMMIX procedure, SAS), assuming a log-link function and a gamma distribution of the response variable [ 38 , 39].”
MethodÖksüz, E., Malhan, S., Gönen, M. S., Kutlubay, Z., Keskindemirci, Y., & Tabak, F. (2021) · Health Economics Review · doi:10.1186/s13561-021-00338-8 · Cited by 39 · see citing works
Hümmert, M. W., Schöppe, L. M., Bellmann-Strobl, J., Siebert, N., Paul, F., Duchow, A., Pellkofer, H., Kümpfel, T., Havla, J., Jarius, S., et al. (2022) · Neurology · doi:10.1212/wnl.0000000000200052 · Cited by 39 · see citing works
“Due to this point and the right-skewness of our cost data, we calculated our 95% CIs of the means with SPSS bootstrap function.(27,28) Because of the explorative character of the study, we did not correct for multiple testing.”
MethodRhinovirus infection and healthcare utilisation in prematurely born infants
Drysdale, S. B., Alcazar‐Paris, M., Wilson, T. M., Smith, M. H., Zuckerman, M. A., Broughton, S. J., Rafferty, G. F., Peacock, J. L., Johnston, S. L., & Greenough, A. (2013) · European Respiratory Journal · doi:10.1183/09031936.00109012 · Cited by 39 · see citing works
GAMMA SHAPE MIXTURES FOR HEAVY-TAILED DISTRIBUTIONS
Venturini, S., Dominici, F., & Parmigiani, G. (2006) · Collection of Biostatistics Research Archive · Cited by 39 · see citing works
Li, Z., Pan, Z., Zhang, L., He, R., Jiang, S., Xu, C., Lu, F., Zhang, P., & Li, B. (2019) · BMJ Open · doi:10.1136/bmjopen-2018-026309 · Cited by 37 · see citing works
“Generalised linear models were used to evaluate the mechanism of the effect of independent variables on the EOL cost because the EOL data were severely positively skewed.(40) 41 Four regression models were conducted for patients with different lengths of survival, the EOL costs were the outcome variables, and the inde…”
MethodEustache, J., Latimer, E. A., Liberman, A. S., Charlebois, P., Stein, B., Fiore, J. F., Feldman, L. S., & Lee, L. (2021) · Diseases of the Colon & Rectum · doi:10.1097/dcr.0000000000002187 · Cited by 37 · see citing works
Economic Analysis of Ticagrelor Therapy From a U.S. Perspective
Cowper, P. A., Pan, W., Anstrom, K. J., Kaul, P., Wallentin, L. C., Davidson-Ray, L. D., Nikolic, E., Janzon, M., Levin, L., Cannon, C. P., et al. (2015) · Journal of the American College of Cardiology · doi:10.1016/j.jacc.2014.11.034 · Cited by 36 · see citing works
“A generalized linear model for hospitalization cost was specified with an identity link and a gamma distribution function (11).”
MethodHealthcare utilization and costs of Veterans screened and assessed for traumatic brain injury
Stroupe, K. T., Smith, B., Hogan, T. P., Andre, J. R. S., Pape, T., Steiner, M. L., Proescher, E., Huo, Z., & Evans, C. T. (2013) · The Journal of Rehabilitation Research and Development · doi:10.1682/jrrd.2012.06.0107 · Cited by 36 · see citing works
“To examine the association of the three TBI screening groups and two TBI evaluation results groups with total direct healthcare costs after controlling for other factors, we used generalized linear models (GLMs) [18].”
Method
- Authors
- Barber, J., & Thompson, S.
- Affiliations
- University College London (GB)
- MRC Biostatistics Unit (GB)
- Venue
- Journal of Health Services Research & Policy
- Publisher
- SAGE Publications
- Published
- 2004-10-02
- Volume
- 9
- Issue
- 4
- Pages
- 197-204
- ISSN
- 1355-8196 (ISSN-L)
- 1758-1060
- OpenAlex
- W1996146145
- Cited by
- 404
- References
- 20
- Citations by year
- 2026: 11 · 2025: 11 · 2024: 17 · 2023: 18 · 2022: 27 · 2021: 29 · 2020: 32 · 2019: 29 · 2018: 32 · 2017: 28 · 2016: 28 · 2015: 23 · 2014: 22 · 2013: 17 · 2012: 20
- FWCI
- 7.09
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Health Services Research & Policy (publishedVersion)
- PubMed (publishedVersion)
- UCL Discovery (University College London) (submittedVersion)
- Topics
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods and Bayesian Inference
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods in Clinical Trials
- Keywords
- cost data, generalized linear models, skewed distributions, gamma distribution, inverse Gaussian distribution, log link function, treatment effects, baseline covariate adjustment, model selection criteria
- MeSH terms
- Costs and Cost Analysis, United Kingdom, Health Services Research, Normal Distribution, Linear Models
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