Suppose, Sam has the opportunity for a treatment that will extend his life by one year with a probability of 0.9, by two years with a probability of 0.5, and three years with a probability of 0.3. Sam will die with certainty after three years. QALY weight q1 is 0.9 in Year 1, q2 is 0.6 in Year 2, and q3 is 0.2 in Year 3. The discount rate is 0.05 per year.
a. What is the total number of discounted QALYs from this treatment?
b. The treatment costs are $2,000 in Year 1, $3,000 in Year 2, and $5,000 in Year 3. What is the expected costs per QALY for the three-year regimen?
Suppose, Sam has the opportunity for a treatment that will extend his life by one year...
ANSWER IN QALYS. DISCOUNT ALL THREE YEARS. ROUND TO TWO DECIMAL PLACES. 1. Suppose Sam has the opportunity for a treatment that will extend his life by one year with a probability of 0.78 by two years with a probability of 0.50, and three years with a probability of 0.18. Sam will die with certainty after three years. QALY weight q1 is 0.9 in year 1, q2 is 0.6 in year 2, and q3 is 0.2 in year 3. The...
10. Suppose that a patient has the opportunity for a treatment that will extend life: - By one year with a probability of 0.9 - By two years with a probability of 0.5 The patient will die with certainty after two years. Quality weight: q1 is 0.8 in year 1, and q 2 is 0.6 in year 2. The discount rate is 0.05 per year a. What is QALY for this patient? b. Suppose that the 2nd year of treatment...
2.Cost-effectiveness Analysis Amoria Phlebitis is a fictional illness from The Simpsons that causes sharp stabbing pains to the stomach and arms and temporary loss of vision. A 25-year-old patient diagnosed with this condition has an expected lifespan of 35 more years, during which they will continue to deal with these symptoms. Two new treatments (surgery and medication) have recently been proposed as alternatives to the current solution (no treatment). Medication prevents the disease from getting worse and will extend the...
1. a. Two investors, A and B, are evaluating the same investment opportunity, which has an expected value of £100. The utility functions of A and B are ln(x) and x2, respectively. Which investor has a certainty equivalent higher than 100? Which investor requires the higher risk premium? b. (i) Describe suitable measures of risk for ‘loss-aversion’ and ‘risk aversion’. (ii) Concisely define the term ‘risk neutral’ with respect to a utility function u (w), where w is the realisation...
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 21% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 270,000 $ 480,000 Annual revenues and costs:...
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows: ProductAProduct B Initial investment Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation...
Handstar Inc was created a little over 4 years ago by two college roommates to develop apps for smartphones. It has since grown to ten employees with annual sales approaching $1.5 million. Handstar's original product was an expense report app that allowed users to record expenses on their smartphone and then export their expenses into a spreadsheet that then created an expense report in one of five standard formats. Based on the success of its first product, Handstar subsequently developed...