In economic models that use Markov-type processes, it is generally recommended that a ‘half-cycle correction’ be built into the analysis, to account for the fact that events and transitions can occur at any point during the cycle, not necessarily at the start or end of each cycle. For example, if we know that 100 people are alive at month ten, and that 90 people are alive at month eleven, we do not necessarily know at what point those 10 patients died between months ten and eleven. In such cases, it is usual to assume that the event occurred at the mid-point of the cycle. However, for many health events, the implications of the event may not actually become apparent until the next cycle. For instance the increased costs associated with disease progression may not occur until progression is clinically confirmed, which may only happen at regular routine follow-up visits (i.e. at the start or end of a cycle). Likewise, if packs of medicine are prescribed on a monthly basis, then a monthly cost to the healthcare system would occur in full, no matter what point the person died within the cycle. Therefore, it is usually recommended that half cycle correction is applied carefully, and only to those aspects where the timing of the event and its consequences are not known.
How to cite: Half-Cycle Correction [online]. (2016). York; York Health Economics Consortium; 2016. http://www.yhec.co.uk/glossary/half-cycle-correction/