HSA 4430 Project 2: Due December 5, 2017 1. What is the optimal number of tests
ID: 375484 • Letter: H
Question
HSA 4430 Project 2: Due December 5, 2017 1. What is the optimal number of tests to conduct for a sequence of tests with the following total costs and benefits per person? Explain your answer. Number of tests: 1 Total costs of tests: 120 2 190 300 260 330 400 Total benefits of tests: 200 350 370 380 2. A study in the Journal of the American Medical Association finds benefit in giving statin drugs to heart attack patients while they are recovering in hospital. Specifically the probability of dying in the first year after release from hospital was found to fall from 10% for those not taking statin while in hospital to 5% for those who took statin while in hospital. We consider the costs and benefits of giving statin to 1,000 heart attack patients when - The cost of the statin treatment is $4,500 per patient For simplicity assume that for those whose life is saved exactly one year of life is saved. The benefit of saving one year of life is placed at $100,000 For simplicity it is assumed that the all of the benefits of statin use occur in the first year (a) Perform a cost-benefit analysis of the use of statin. Does it favor the use of statin? (b) What is the cost of statin treatment per year of life saved? (c) Now consider quality of life adjusted years. Suppose that all people who experience a heart attack have a lower quality of life after heart attack. It has been calculated that their quality of life adjustment factor is 0.90 (where perfect health is 1.00) What is the cost of statin treatment per quality adjusted year of life saved?Explanation / Answer
1. Question 1
As we can see gross benefit increases in start and then starts decreasing and becomes negative. Hence, most optimal number will be 2 in which gross benefit is maximum i.e. 11
Question 2:
Statin give to 1,000 patients
Cost of treatment = 1,000*4,500 = 4,500,000$
Benefits
Probability of dying = 5%
Probability of not dying = 95%
Out of 1,000 patients 950 will live
Benefit of each person living = 100,000 $
Total benefit = 950*100,000 = 95,000,000 $
Cost benefit analysis
Total cost = 4,500,000$
Total befit = 95,000,000$
Gross benefit = 95,000,000-4,500,000 = 90,500,000$
B. Cost of Statin per year of life saved
Total cost = $4,500,000
Years saved = 950
Cost per year of life saved = 4500000/950 = 4,736.84$
C. Quality of life adjustment
Since quality if life falls. Benefit ocuring because of use of Statin falls.
Adjustment factor = 0.9
Benefit of saving one yea rof life = 100,000 * 0.9 = 90,000
Total benefit = 950*90,000 = 85,500,000$
Gross benefit = 85,500,00- 4,500,000 = $81,000,000
Years of life saved = 950*0.9 = 855
Total cost per adjusted life = 4500000/855= 5263.16$
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