Question

The State of Florida refused to expand Medicaid included in the Affordable Care Act (ACA).   Hence, the U.S. Department of Health and Human Services (DHHS) gave a stimulus grant of $100,000 to the Florida Department of Children and Families to spend on healthcare services. DCF is required to allocate the money in the way that saves the greatest number of quality-adjusted life-years (QALYs). After much analysis, DCF developed a list of possible programs and estimated their expected health benefits and resources costs. These are as follows:

Program	Benefit (Expected QALYs Gained)	Cost
1	100	$3,500
2	200	$2,000
3	300	$6,000
4	400	$20,000
5	500	$60,000
6	600	$9,000
7	700	$140,000
8	800	$200,000

Each program has benefits that are independent of the benefits of other programs. Moreover, each program is divisible into fractions.

Suppose the agency has a budget of $100,000. Which of the programs should the DCF fund? What are total costs and total benefits attributable to each funded program?

Rather than using the money for the program above, DCF decides to implement a screening program that it can implement in several locations. This program can be carried out at any of the five possible levels or variations listed below, but only one level will be implemented. Each level represents a different mix of behavioral activities. The costs and benefits of each level are as follows:

Level of Program	Benefit (Expected QALYs)	Cost
Do nothing	0	$0
A	20	$500
B	25	$1,100
C	30	$2,000
D	10	$800
E	25	$1,200

Which variation, if any, of the screening program should be undertaken given the agency’s budget? And in how many locations the selected program will be implemented?

Answer 1

Following is chart for optimal allocation of funds for maximum benefits

Program	Benefit (Expected QALYs Gained)	Cost	Cost Per QALY	Fund allocation based on minimum cost per QALY	Benefits from Fund Allocation
1	100	$3,500	$35	$3500	100
2	200	$2,000	$10	$2000	200
3	300	$6,000	$20	$6000	300
4	400	$20,000	$50	$20000	400
5	500	$60,000	$120	$59500	495.83
6	600	$9,000	$15	$9000	600
7	700	$140,000	$200	-	-
8	800	$200,000	$200	-	-
Total				$100000	2095.83

from above it can be concluded that by funding above programs total cost will be $100,000 and total benefits will be 2095.83

Answer part 2

Again benefits per QALY will need to calculated to ascertain best level of programs

Level of Program	Benefit	Cost	Cost per benefit	Possible Locations within budget
	(Expected QALYs)
Do nothing	0	$0
A	20	500	25	200.00
B	25	1100	44	90.91
C	30	2000	66.66667	50.00
D	10	800	80	125.00
E	25	1200	48	83.33

from above table it is clear that Level A should be undertaken by the agency, as it gives maximum QALYs on spending $100000. This level of program can be implemented in 200 locations.