Program in Population Health Sciences, Research Institute, Hospital for Sick Children, 555 University Avenue, Toronto, ON, Canada M5G 1X8. willana@mcmaster.ca
A system of seemingly unrelated regression equations is proposed for prognostic factor adjustment and subgroup analysis when comparing two groups in a cost-effectiveness analysis with censored data. Because of the induced dependent censoring on costs and quality-adjusted survival, inverse probability weighting is employed for parameter estimation. The method is illustrated with data from two recent examples using both survival time and quality-adjusted survival time as the measures of effectiveness.