Another Health Econ Q?

Published October 22, 2010

Question by Kendall: Another Health Econ Q?
I’m just not too sure where to start:
I was thinking PV of the two state costs, PV the HRQoL states… but then where to for comparison?
Exam Prep Q.6

For a person with a heart defect who would die immediately unless treated, which of the following two treatments is the most cost-effective in terms of cost per Quality-Adjusted Life Year (QALY) gained? Show your workings and explain your answer.

The discount rate is 5% and assume that, except for the $ 25,000 for the pacemaker, the costs and benefits are incurred/received at the end of each of the years referred to.

Drug Therapy and Minor Surgery: The drugs cost $ 5000 per year and sustain the patient for an additional 12 years (and then she dies). After seven years, she also has to have an operation that costs $ 15000. Her health-related quality of life (HRQoL) due to this overall treatment is 0.75.

Implantation of a Pacemaker: This costs $ 25,000 immediately and sustains the patient for an additional 15 years (and then she dies). She also requires annual check-ups costing $ 1000 each. Her HRQoL due to this overall treatment is 0.85.

Thanks!

Best answer:

Answer by Jesus Say Relax
This is just a stand NPV problem. The other words are just there to confuse you. There is not enough space here, and I do not know how to type the symbols, but this link should help.

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