What is the total cost for the survivors receiving treatment
Course:- Microeconomics
Reference No.:- EM131469695

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Health Economics - Economic Evaluation Homework

The following are a few problems to solve related to Economic Evaluation. Please circle numeric answers and show all work to get credit. Please upload it when you are finished.

Q1. An article in JAMA by Mandelblatt et al (2002) compared the societal costs and benefits of human papillomavirus (HPV) testing, Pap testing, and their combination to screen for cervical cancer.  The following table summarizes some of the results (low cost to high cost).  Costs include screening and treatment costs, discounted over the individual's expected lifetime. 


Cost ($)

QALYs Saved

Incremental Cost

Incremental QALY

Incremental CE ratio (ICER)

0. No screening






1. Pap every 3 years to age 75






2. HPV every 3 years to age 75






3. Pap every 2 years to age 75






4. Pap + HPV every 3 years to age 75






5. HPV every 2 years to age 75






6. Pap + HPV every 2 years to age 75






a. Identify all dominated screening strategies.  Recall a strategy is dominated if it costs more than an equally or more effective strategy, or it is less effective than another strategy that costs the same or less. List the strategy number(s) here.

b. Fill in the table above. Calculate the incremental cost, incremental QALYs, and ICERs for all economically rational strategies (relative to strategy 0, no screening). 

c. The local health district has asked your opinion on the "best" strategy from a public health perspective. What do you tell them?

Q2. The following information has been gathered on the costs and effectiveness of the two treatments, A and B. In this problem, costs and consequences are not discounted. 


Treatment A

Treatment B

Mortality rate



Life expectancy for survivors

20 years

10 years

Initial treatment cost



Follow up costs, year 1



Annual follow up costs, all subsequent years



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

For decedents (assuming sudden death)? 

b. What is the total cost for survivors receiving treatment B?

For decedents?

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

d. Treatment B?

e. Draw a simple decision tree showing the costs and consequences of each treatment option.

f. What treatment should be chosen, if lowest cost per benefit is the criterion?

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