Evidence suggests that a new innovative therapy will increase the average life e

Question

Evidence suggests that a new innovative therapy will increase the average life expectancy following diagnosis from 11.5 years to 12.3 years. The added cost of the therapy is a one-time cost of $14,000. The primary care provider calculates the added cost per life year to make a case for adopting this innovative therapy. What is the cost per life year? Although there are no clear standards regarding the value of an additional life year, what are your thoughts about the decision to move to the new therapy?

Explanation / Answer

The added time in the average life expectancy rate after the therapy = (12.3 - 11.5) = 0.8 years

Cost of therapy = $14,000

Therefore the cost per life year = ( cost of therapy) / ( time in years)

Cost per life year = $14,000/0.8 = $17,500

As per my belief the decision to move to new therapy is a great idea as the average income of a US citizen is approximately $52,000 and therfore is having this therapy for $17,500 can increase a person’s life by one then economically he/she is in profit of ($17,500 - $52,000) = $34,500.

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