Question

The current standard treatment for a particular disease costs $155,000 per patient and produces a life expectancy of 5.5 years with a quality of life factor of 0.46. A new treatment has recently been developed that is more costly at $238,000 per patient and only provides a life expectancy of 4.6 years, but increases quality of life quality factor to 0.88.

a. Calculate the expected number of quality-adjusted life years (QALYs) from the current treatment and the new treatment.

b. What is the incremental cost-effectiveness ratio (with effectiveness measured in QALYs) associated with using the new treatment rather than the current standard treatment?

Answer 1

Answer a:

Expected number of quality-adjusted life years (QALYs) from the current treatment = life expectancy in years * quality of life factor

= 5.5 * 0.46 = 2.53

Expected number of quality-adjusted life years (QALYs) from the new treatment = 4.6 * 0.88 = 4.0480

Expected number of quality-adjusted life years (QALYs) from the current treatment = 2.530

Expected number of quality-adjusted life years (QALYs) from the new treatment = 4.048

Answer b:

Current standard treatment for a particular disease costs = $155,000 per patient

Cost of New treatment = 238,000 per patient

Incremental cost associated with new treatment = 238000 - 155000 =$83,000

Incremental expected number of quality-adjusted life years (QALYs) with new treatment = 4.048 - 2.530 = 1.518

Incremental cost-effectiveness ratio (with effectiveness measured in QALYs) = 83000 / 1.1518 = $54,677.21

Incremental cost-effectiveness ratio = $54,677