Question

2. Patient BN is a 36-year-old female with a type of organ failure that reduces her quality of life to half of what it would be in good health. Without treatment she can expect to live only two years. With a successful transplant, BN can expect to live four years and have a quality of life that is near 80% what she would enjoy in good health. However, the transplant costs $100,000, plus $10,000 each year for drugs and follow-up care, and carries a 15% risk of rejection resulting in immediate death. a) (20’) What is the cost per additional year of life gained (without discounting for time or quality of life)? b) (20’) What is the cost per discounted Quality-adjusted Life-year (QALY) gained (assuming a 5% time discount rate)?

Answer 1

1. Cost per additional year of life gained without discounting for time or quality of life

Total costs to be incurred = 1,00,000 + 10,000 per year * 5 years = $ 1,50,000

Cost per additional year = 1,50,000 / 5 years = $ 30,000 per year

2. cost per additional year of life gained if it carries a 15 percent risk of rejection resulting in immediate death

So there is risk of 15% implies that there is cance of 85% that she will survive

Equivalent number of years = ( 0.85 +0.85 +0.85 +0.85) probability * number of years she can live

= 3.4 years

cost per additional year of life = 1,50,000 /3.4 years = $ 44,117 per year