Medfarm came up with a new treatment (Drug F) that costs 100,000 for life-threatening Lymphangitis that...

  

 

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Medfarm came up with a new treatment (Drug F) that costs 100,000 for life-threatening Lymphangitis that infects the fishermen. The market has the following treatments Drug Cost Life A |@|||m| B C D E F 40,000 60,000 75,000 80,000 90,000 100,000 Expectancy 1 2.5 1 3 2.5 5 1. Create a cost-effectiveness frontier and show the dominated and the potentially cost-effective treatment and calculate the ICER between them. Assume you are a social planner who is working on a cost-benefit analysis to decide which single treatment is the most cost- effective. You want to place a value on the fisherman's life. Assume also that drug A the 40,000 treatment is the least guaranteed treatment based on social factors. Looking at some previous data, you found that few years ago three fishermen offered to hunt a dangerous shark at $66,000 with all costs paid by the city. Looking at similar events, 95 out of 100 attempts were successful; failure means the fishermen would lose their lives. Based on five years life expectancy, the quality factor of life is 0.9 in the first year, 0.8 in the second year, 0.7 in the third year, 0.6 in the fourth year, and 0.5 in the fifth year. 2. Run a cost-benefit analysis and show which treatment the social planner would consider the most cost-effective. Medfarm came up with a new treatment (Drug F) that costs 100,000 for life-threatening Lymphangitis that infects the fishermen. The market has the following treatments Drug Cost Life A |@|||m| B C D E F 40,000 60,000 75,000 80,000 90,000 100,000 Expectancy 1 2.5 1 3 2.5 5 1. Create a cost-effectiveness frontier and show the dominated and the potentially cost-effective treatment and calculate the ICER between them. Assume you are a social planner who is working on a cost-benefit analysis to decide which single treatment is the most cost- effective. You want to place a value on the fisherman's life. Assume also that drug A the 40,000 treatment is the least guaranteed treatment based on social factors. Looking at some previous data, you found that few years ago three fishermen offered to hunt a dangerous shark at $66,000 with all costs paid by the city. Looking at similar events, 95 out of 100 attempts were successful; failure means the fishermen would lose their lives. Based on five years life expectancy, the quality factor of life is 0.9 in the first year, 0.8 in the second year, 0.7 in the third year, 0.6 in the fourth year, and 0.5 in the fifth year. 2. Run a cost-benefit analysis and show which treatment the social planner would consider the most cost-effective.

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To create a costeffectiveness frontier we need to compare the treatments costs and their effectivene... View the full answer