Question

For 2 - 8

Given:

Treatment E: Cost = $5,000, benefit = survival rate of 60%

Treatment F: Cost = $7,000, benefit = survival rate of 50%

Treatment G: Cost = $4,000, benefit = survival rate of 40%

Treatment H: Cost =$5,000, benefit = survival rate of 30%

Treatment K: Cost =$3,000, benefit = survival rate of 55%

Treatment J: Cost = $6,000, benefit = survival rate of 68%

2. Treatment E obviously dominates _________________

A. Treatment H only

B. Treatments H and G only

C.Treatments H and F only

D. all the other treatments

E. none of the treatments

3. Treatment H obviously dominates

A. Treatments K, E, and J

B. Treatment K and H

C. Treatment G

D. all the other treatments

E. none of the treatments

4. Which treatment does J obviously dominate?

A. G and H

B. K

C. E

D. F

E. none of the above

5. After removing all the obviously dominated treatments what are the treatments left for ICER analysis in the right order?

A.Treatments E, F, then G

B. Treatments K, E, then J

C. Treatments K, E, then G

D. Treatments E, J, then H

E. Treatments K, E, then F

6. What are the ICERS of K to E? K to J?

A. $272.73; $23,076.92

B. $40,000; $4,000

C. $23,076.92; $40,000

D. $4,000; $23,076.92

E. $40,000; $23,076.92

7. From K which treatment do we choose next?

A. E

B. J

C. H

D. G

E. none of the above

8. Which one is true?

A. no treatment is marginally dominated

B. Treatment K is marginally dominated

C. Treatment E is marginally dominated

D. Treatment J is marginally dominated

E. none of the above

Answer 1

2) C. Treatments H and F only

Treatment E provides success rate of 60% with $5000. Treatment H provides a lesser success rate with same cost. Hence E dominates H.

Treatment E provides success rate of 60% with $5000. Treatment F provides a lesser success rate with higher cost. Hence E dominates F.

All other treatment either has a higher success rate or lower cost than E. Hence, E dominates H and F only.

3) E. none of the treatments

All the other treatments either has a higher success rate or a lower cost than H. Hence, we cannot conclude any treatment is necessarily worse than H.

4) D. F

Treatment J provides a survival rate of 68% with $6000. Treatment F provides a smaller survival rate (50%) at higher cost ($7000). Hence J dominates F.

All other treatments has lower costs than J.

5) B. Treatments K, E, then J

Treatment F, G and H is dominated by K. The remaining treatments are E, K and J.

When we order them in the sequence of increasing effectiveness, the order is K, E and J.