Hospital has the following treatment options to reduce the incidence of Ventilator-Associated Pneumonia: For Treatment X (status quo), it would cost 50,000 with 40 percent effectiveness, For Treatment Y, it would cost 100,000 with 85 percent effectiveness, For Treatment Z, it would cost 75,000 with 65 percent effectiveness, and For Treatment V, it would cost 80,000 with 68 percent effectiveness.a) Is there any treatment option that is not economically rational? Explain.b) If hospital’s willing to pay is $1000, which treatment option it would choose? Explain.c) With technical innovation, suppose Treatment V increased its effectiveness to 75 percent, would your answer to question (a) above change?

Economic investigations in the medical field include the distribution of resources and utilization…

Answered: Hospital has the following treatment…

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter5: Demand For Health And Medical Care

Section: Chapter Questions

Problem 9QAP

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Hospital has the following treatment options to reduce the incidence of Ventilator-Associated Pneumonia: For Treatment X (status quo), it would cost 50,000 with 40 percent effectiveness, For Treatment Y, it would cost 100,000 with 85 percent effectiveness, For Treatment Z, it would cost 75,000 with 65 percent effectiveness, and For Treatment V, it would cost 80,000 with 68 percent effectiveness.

a) Is there any treatment option that is not economically rational? Explain.

b) If hospital’s willing to pay is $1000, which treatment option it would choose? Explain.

c) With technical innovation, suppose Treatment V increased its effectiveness to 75 percent, would your answer to question (a) above change?

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