Bootstrap confidence intervals for medical costs with censored observations

Medical costs data with administratively censored observations often arise in cost-effectiveness studies of treatments for life-threatening diseases. Mean of medical costs incurred from the start of a treatment until death or a certain time point after the implementation of treatment is frequently of interest. In many situations, due to the skewed nature of the cost distribution and non-uniform rate of cost accumulation over time, the currently available normal approximation confidence interval has poor coverage accuracy. In this paper, we propose a bootstrap confidence interval for the mean of medical costs with censored observations. In simulation studies, we show that the proposed bootstrap confidence interval had much better coverage accuracy than the normal approximation one when medical costs had a skewed distribution. When there is light censoring on medical costs (less than or equal to,25 per cent), we found that the bootstrap confidence interval based on the simple weighted estimator is preferred due to its simplicity and good coverage accuracy. For heavily censored cost data (censoring rate greater than or equal to30 per cent) with larger sample sizes (n greater than or equal to 200), the bootstrap confidence intervals based on the partitioned estimator has superior performance in terms of both efficiency and coverage accuracy. We also illustrate the use of our methods in a real example. Copyright (C) 2004 John Wiley Sons, Ltd.