Question

In: Economics

What does insurance do to a CEF? Group of answer choices nothing shifts it to the...

What does insurance do to a CEF?

Group of answer choices

nothing

shifts it to the right

shifts it down

shifts it to the left

all of the choices are possible

Solutions

Expert Solution

The cost-effectiveness frontier is the line connecting successive points on a cost-effectiveness plane which each represent the effect and cost associated with different treatment alternatives. The gradient of a line segment represents the ICER of the treatment comparison between the two alternatives represented by that segment. The cost-effectiveness frontier consists of the set of points corresponding to treatment alternatives that are considered to be cost-effective at different values of the cost-effectiveness threshold. The steeper the gradient between successive points on the frontier, the higher is the ICER between these treatment alternatives and the more expensive alternative would be considered cost-effective only when a high value of the cost-effectiveness threshold is assumed. Points not lying on the cost-effectiveness frontier (usually above and to the left of the frontier) represent treatment alternatives that are not considered cost-effective (compared with a relevant alternative lying on the frontier) at any value of the cost-effectiveness threshold.Hence due to insurance sucessfull points will shift rightwards.

(A) part is a correct answer


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