EBK HEALTH ECONOMICS AND POLICY
7th Edition
ISBN: 9781337668279
Author: Henderson
Publisher: YUZU
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Question
Chapter 4, Problem 9QAP
(a)
To determine
The cost benefit table of alternative clinical programs and select the best alternative in terms of the incremental cost effectiveness ratio and the number of lives saved.
(b)
To determine
The means by which, the cost effectiveness ratio is different from the incremental cost effectiveness ratio.
(c)
To determine
The preferred option of an economist among cost effectiveness analysis and incremental cost effectiveness ratio.
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You have been recruited as an expert in health economics to recommend
what is the best therapy for a group of patients. In the image below you will
find the decision tree showing the probabilities for different health states
and outcomes for patients undergoing two possible treatments, No drug
therapy and Drug therapy. Based on the expected cost, which therapy
would you recommend as the least expensive? Explain how you arrived at
your recommendation and show your calculations the space provided.
No drug theraphy ?
Drug theraphy
?
HEALTH STATES
PROBABILITIES
Remain in Good Health
0.5
Develop disease A
0.2
Develop disease B
0.2
Die
0.1
Remain in Good Health
0.53
Develop disease A
0.16
Develop disease B
0.22
Die
0.09
OUTCOMES
(Costs)
$0
$400
$300
$200
SO
$800
$500
$0
In what sense is a cost-of-illness study a technique of economic evaluation? In what sense is it not? What is the primary motivation for doing a cost-of-illness study?
Consider two treatments. Treatment 1 saves one year of life at a cost of $10,000. Treatment 2 saves ten years of life at a cost of $1,000,000. Which treatment is more cost-effective? Why?
Chapter 4 Solutions
EBK HEALTH ECONOMICS AND POLICY
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