The purpose of this assignment is to give you some experience in doing a simple cost...
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The purpose of this assignment is to give you some experience in doing a simple cost effectiveness evaluation. Using the Excel file that we have provided (Cost Effectiveness Assignment 4 Template.xlsx) to answer the following questions. You are working for Medi-Cal and have been asked to figure out whether it is worth purchasing a new drug for the treatment of throat infections. You look through the literature and find: The New Drug will cure 80% of the throat infections, compared with 70% cure rate with the old drug For those people who get the throat infection, it costs $10,000 to treat them in the hospital The cost of the old drug is $250. Using the excel sheet, answer the following questions: a) Suppose the price of the new drug was $1000. What would be the: (4 points) Cost difference Outcome difference Cost effectiveness ratio Would you suggest that MediCal purchase the new drug? b) Now suppose the price of the new drug was $3000. What would be the: (4 points) Cost difference Outcome difference Cost effectiveness ratio Would you suggest that MediCal purchase the new drug? c) Finally, suppose that your boss said they only would purchase the new drug if it saved them money. What would be the maximum amount (i.e., the break-even point) that you would pay for the drug? (2 points) New Drug Old Drug Outcomes Cure illness Cure illness Costs Drug Cost difference Outcome difference Cost effectiveness ratio Healthcare $0 0.00 #DIV/0! Total Probabi Expected lities cost D Total The purpose of this assignment is to give you some experience in doing a simple cost effectiveness evaluation. Using the Excel file that we have provided (Cost Effectiveness Assignment 4 Template.xlsx) to answer the following questions. You are working for Medi-Cal and have been asked to figure out whether it is worth purchasing a new drug for the treatment of throat infections. You look through the literature and find: The New Drug will cure 80% of the throat infections, compared with 70% cure rate with the old drug For those people who get the throat infection, it costs $10,000 to treat them in the hospital The cost of the old drug is $250. Using the excel sheet, answer the following questions: a) Suppose the price of the new drug was $1000. What would be the: (4 points) Cost difference Outcome difference Cost effectiveness ratio Would you suggest that MediCal purchase the new drug? b) Now suppose the price of the new drug was $3000. What would be the: (4 points) Cost difference Outcome difference Cost effectiveness ratio Would you suggest that MediCal purchase the new drug? c) Finally, suppose that your boss said they only would purchase the new drug if it saved them money. What would be the maximum amount (i.e., the break-even point) that you would pay for the drug? (2 points) New Drug Old Drug Outcomes Cure illness Cure illness Costs Drug Cost difference Outcome difference Cost effectiveness ratio Healthcare $0 0.00 #DIV/0! Total Probabi Expected lities cost D Total
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Related Book For
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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