Presentation (CTI)

OBJECTIVES: Within economic models, it is common practice to include a half-cycle correction to account for events and transitions that could occur at any point during each model cycle. The process assumes that instead of the transition/event happening at the beginning or the end of the cycle, they occur in the middle of the cycle. However, the importance of half cycle correction is not widely discussed, and building this step in increases the risk of errors in the model.
METHODS: We developed a simple 4-state Markov model to evaluate the impact of applying half-cycle correction in health economic evaluations. Key parameters such as transition probabilities, costs, and utilities were varied across different scenarios. We also altered cycle lengths to assess how these changes influence the magnitude of half-cycle correction effects on the results. Model outputs with and without half-cycle correction were compared across all scenarios to quantify its importance in producing cost-effectiveness results.
RESULTS: Applying the half-cycle correction had minimal impact on model outcomes when using standard monthly or quarterly cycle lengths and varying a range of parameters. Meaningful differences to the conclusion of the results only appeared when cycle lengths were extended to much longer cycle lengths. However, these differences likely indicate that the model was misspecified, rather than supporting the use of the half-cycle correction. Overall, the correction had little practical effect for informing the results of the model with respect to cost-effectiveness.
CONCLUSIONS: We suggest that its routine use of half-cycle correction in health economic modelling should be reconsidered, given the limited impact on results and the potential for errors in its application. Incorrectly applying the correction to parts of the model where it is not appropriate, or implementing the formulas incorrectly, can introduce substantial errors, with little benefit provided from half cycle correction.