Question

In: Economics

For Questions 14-19 The following information has been gathered on the costs and effectiveness of the...

  1. For Questions 14-19

    The following information has been gathered on the costs and effectiveness of the two treatments, A and B.

    Treatment A

    Treatment B

    Mortality rate

    2%

    5%

    Life expectancy for survivors

    10 years

    6 years

    Initial treatment cost

    $8,000

    $4,000

    Annual follow up costs

    $1,000

    $800

    14. What is the total cost for the survivors receiving treatment A?

    A.

    $8,000
    B.

    $10,000
    C.

    $18,000
    D.

    $20,000

1 points   

QUESTION 15

  1. What is the total cost for decedents receiving treatment B?

    A.

    $4,000
    B.

    $4,800
    C.

    $8,000
    D.

    $8,800

1 points   

QUESTION 16

  1. What is the expected cost for those patients receiving treatment A?

    A.

    $16,000
    B.

    $16,800
    C.

    $17,000
    D.

    $17,800

1 points   

QUESTION 17

  1. What is the expected benefit (life expectancy) for those patients receiving treatment B?

    A.

    0 year
    B.

    3,7 years
    C.

    5.7 years
    D.

    6 years

1 points   

QUESTION 18

  1. What is the incremental cost of the treatment alternatives?

    A.

    $8,560
    B.

    $9,240
    C.

    $10,200
    D.

    $17,800

1 points   

QUESTION 19

  1. What is the ICER?

    A.

    1262
    B.

    2254
    C.

    2875
    D.

    3870

Solutions

Expert Solution

14. What is the total cost for the survivors receiving treatment A?

Ans. Initial Cost= 8000

      Annual cost for 10 years= 1000X10= 10000

     Total Cost = 18000

15. What is the total cost for decedents receiving treatment B?

Ans. Initial Cost = 4000

Annual cost for 6 years= 800X6= 4800

Total Cost = 8800

16.What is the expected cost for those patients receiving treatment A?

Ans. Initial Cost= 8000

Annual Cost = 1000 X9= 9000

Expected Cost = 17000

17. What is the expected benefit (life expectancy) for those patients receiving treatment B?

6 years

18. What is the incremental cost of the treatment alternatives?

Increase in initial cost= 4000

Increase in annual cost for first 6 years= 200 X5.7 = 1140

Increase in annual cost for remaining 4 years= 1000 X 4.1= 4100

Incremental Cost = 9240

19. What is the ICER?

ICER= Incremental Cost/ Incremental Effective years= 9420/4.1= 2253.6

ICER= 2254

Rahul Sunny answered 1 year ago
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