The intention here is to have you look at some numbers to understand how cost-effectiveness analysis might
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The intention here is to have you look at some numbers to understand how cost-effectiveness analysis might work in practice. Suppose that you have the five interventions shown below, each with an associated cost and estimated additional years of life from the intervention.
Intervention | Cost | Effect (additional years of life) | ICER |
---|---|---|---|
A | 100 | 10 | |
B | 200 | 14 | |
C | 300 | 16 | |
D | 400 | 19 | |
E | 500 | 20 |
For each alternative, calculate the ICER. Then graph out the ICER. Use the graph to help you eliminate the “dominated alternatives”. Then decide which one you would choose. Now suppose that the actual value of each life year is 30. Calculate the net benefits from each project and decide which one you would choose.
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