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Cost-benefit & Cost-effectiveness analysis Given the information below, answer the questions that follow.                        &nbs

  1. Cost-benefit & Cost-effectiveness analysis

Given the information below, answer the questions that follow.

                                             Cost                       Effectiveness

Current Treatment                $100,000                4 life-years gained

New Treatment                     $250,000                10 life-years gained

  1. Calculate the ICER for the new treatment, assuming that the new treatment would replace the old one. Should the new treatment be adopted? Why?
  2. Given the above information, calculate the number of QALYs for the current and new treatment, assuming that the health-utility index is 0.8 for the current treatment and 0.4 for the new treatment. Also calculate the cost-utility index (cost per QALY) for the new treatment. Should the new treatment be adopted? Why?
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