35.1 Upstream payoffs prior to Markov Nodes

Complex models may have a series of nodes that occur prior to Markov nodes. In such models, you can assign value at these upstream nodes by entering upstream payoffs. Without upstream payoffs, you would need to enter those values in the initial rewards in the Markov model (possibly for several health states).

We will use the Healthcare Example model Markov-UpstreamPayoffs.trex to illustrate this technique. This model already contains the appropriate Tree Preferences settings and Upstream Payoff entries.

Upstream payoffs are more frequently used in Decision Trees. This technique is described in further detail in the section Entering Upstream Payoffs Along Patient Pathways.

Setting Up the Model for Upstream Payoff Entry

Turn on the upstream payoff entry option via Tree Preferences.

• Open Tree Preferences.

• Navigate to Calculation > Payoffs.

• Check the box to “Allow payoffs prior to terminal nodes”.

Entering Upstream Payoffs

The Markov-UpstreamPayoffs.trex model utilizes this option to accumulate the Surgery treatment costs at the node in the model where it occurs.

The model shows the cost of surgery beneath the appropriate node in the pathway prior to the Markov node.

Analysis with Upstream Payoffs

When you analyze the model, the surgery cost payoff entry is automatically applied to any scenario that passes through this node. In this case, it passes on both to the Markov model and to the terminal node. Below shows the model rolled back.

You will also see the surgery cost incorporated into the initial rewards for every state in Markov Cohort reports as in the figure below.