NVCC Health & Medical Question

HAP-425-001 & 002 — Summer 2023Prof. Phillip C. Zane
Week 9 Assignment: Cost-Effectiveness
Homework questions:
This question set concerns a fictitious medical condition known as econosomiasis. The data are
the same as the data presented in the Cost-Effectiveness Frontier Game, so if you graphed the data for the
game, you may reuse the graph here. Assume that econosomiasis is invariably fatal if left untreated. There
are eleven strategies for treating econosomiasis, with the costs and benefits as indicated in the following
table. Do not write your answers on this document. Create your own (you may, however, use the attached
blank graph paper).
Treatment Strategy
Cost
Do nothing
A
B
C
D
E
F
G
H
I
J
$0.00
$40,000.00
$130,000.00
$10,000.00
$90,000.00
$180,000.00
$130,000.00
$60,000.00
$170,000.00
$180,000.00
$110,000.00
Benefit from treatment
(in QALYs)
0
0.2
0.8
1.0
2.2
2.4
3.2
3.2
3.8
4.0
4.0
For Question 1, plot and label the graph as instructed. For Questions 2 through 9, type or handwrite your
answers. Make sure your work is legible.
1. Plot the eleven treatment strategies (be sure to include “do nothing”) on graph paper (you may,
but need not, use the blank graph on the last page of this assignment). Make sure you choose a
scale that allows all eleven strategies to fit. Draw the Cost-Effectiveness Frontier for these
treatment options. If you need additional help with this graph, see pages 282–85 and 292–96 in
our text, Bhattacharya, et al., Health Economics (2014). Hint: the cost (price) goes on the x- axis
and effectiveness, which we measure here in QALYs, goes on the y-axis. Scan the graph, make
sure the scan is legible, and then submit the graph as part of this assignment.
2. What treatment strategies are on the Cost Effectiveness Frontier? Why do these strategies fall on
the frontier (what characteristics do these strategies share)?
3. Which treatment strategies are the dominated treatment strategies? Why?
4. For this question, assume that Treatment Strategy G has been withdrawn from the market because
of a newly discovered safety problem. How does this change the relative cost-effectiveness of the
remaining strategies? How does the cost-effectiveness frontier change? List the dominant
strategies and the dominated treatments.
HAP-425-001 & 002 — Summer 2023 — © Professor Phillip C. Zane, George Mason University
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5. For this question, include the assumption you made in question 4 (Strategy G is off the market),
and make the additional assumption that the patent covering Treatment Strategy H has expired.
Generic pharmaceutical companies offer to sell a generic version of Treatment Strategy H at onehalf its previous price. Does this change the cost-effectiveness frontier? Which treatments now lie
on the cost-effectiveness frontier and which are the dominated treatment strategies?
6. Define QALY. DO NOT SURF THE WEB! DO NOT USE A CHATBOT to get this answer! Use
a reliable reference tool: try the textbook (Bhattacharya). Try page 288, or check out the
textbook’s index. Explain QALY in your own words. Once you have done this, and only after
you have done this, compare your definition with a Chatbot and/or Wikipedia to see whether and
how those sources might be helpful. Are they helfpul?
7. Define ICER. What is the formula for calculating the ICER of two treatment strategies, X and Y.
Identify all of the variables in the formula. DO NOT SURF THE WEB to get this answer. Use a
reliable reference tool: try the textbook (Bhattacharya). Try page 280, or check out the
textbook’s index. Calculate the Incremental Cost Effectiveness Ratio (ICER) for Treatment
Strategy G compared with Treatment Strategy D (assume no health insurance). Show your work.
Once you have done this, and only after you have done this, compare your definition with the
definitions provided by a Chatbot and/or Wikipedia to see whether and how those sources might
be helpful. Are they?
8. Strategy G is determined to be safe once again and is back on the market. In your own words,
explain how would you would use the ICER to decide whether to take Treatment Strategy G over
receiving no treatment if you were suffering from econosomiasis?
9. Define VSL in your own words and describe one way in which researchers have tried to estimate
the VSL. DO NOT SURF THE WEB OR ASK A CHATBOT to get this answer. Use a reliable
reference tool: try the textbook (Bhattacharya). Try pages 296–300. Now you can check this one
out on a Chatbot as well. Try typing in “What does VSL mean?” or something similar. What do
you get?
A sheet of graph paper is provided on the next page.
HAP-425-001 & 002 — Summer 2023 — © Professor Phillip C. Zane, George Mason University
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Following is a graph to plot the cost-effectiveness of the treatment strategies for econosomiasis.
Calibrate the graph and plot the data carefully. Label the graph, its axes, and the costeffectiveness frontier.
HAP-425-001 & 002 — Summer 2023 — © Professor Phillip C. Zane, George Mason University
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