Application of two-part models and Cholesky decomposition to incorporate covariate-adjusted utilities in probabilistic cost-effectiveness models

This study aimed to explain a joint statistical procedure (two-part models and Cholesky decomposition) to incorporate second-order uncertainty from covariate adjusted mean utility functions in probabilistic cost-effectiveness models. First, two-part models were applied to obtain parameters for the utility function. Second, a new set of correlated parameters for each simulation was obtained by Cholesky decomposition. The procedure was applied to...