Question

Department	Incremental Benefit	Incremental Cost
	(QALYs)	($)
Intensive Care	500	$1,000,000
Burn Center	100	$1,000,000
Endoscopy	200	$500,000
Physical Therapy	150	$300,000
Lab Testing	100	$300,000
Ear, Nose, Throat (ENT)	300	$900,000
Nephrology	200	$200,000
Occupational Therapy	50	$500,000

Suppose your hospital has budgeted $2,000,000 for making improvements to patient outcomes. Departments were asked to submit proposals for these improvements, and below is a table of the requests made. Each proposal was compared to the current situation in the hospital.

1. Calculate the ICER for each department’s proposal.
2. Which departments would you recommend funding? Why?

Answer 1

Department	Incremental benefit (QALYS)	Incremental cost ($)	ICMR
Intensive care	500	$1,000,000	2000
Burn center	100	$1,000,000	10000
Endoscopy	200	$500,000	2500
Physical therapy	150	$300,000	2000
Lab testing	100	$300,000	3000
Ear, nose, throat	300	$900,000	3000
nephrology	200	$200,000	1000
Occupational therapy	50	$500,000	10000

The hospital has budgeted $2,000,000 for making improvements in patient outcomes. Therefore each department were asked to submit proposals

The QALY is the benefit received by the patient by means of quality of care, lengthening of life of the patient

ICER (Incremental cost effectiveness ratio) is measured by the diving the difference between the total costs and the difference of the chosen measure of health outcome.

Benefits of ICER: it helps to assess the effect of health either in assessing the to compare the disease area or decision making

              Incremental cost

             -------------------------    = ICMR

               Incremental benefit

FOR INTENSIVE care = ICMR would be 2000 by dividing the incremental cost with incremental benefit (1,000,000 /500). It receives benefits of 500 after funding 1,000,000 to intensive care unit

For burn center = ICMR would be 10000 by dividing the incremental cost with incremental benefit (1,000,000 /100). It receives only benefits of 100 after funding 1,000,000 to burn center

For endoscopy = ICMR would be 2500 by dividing the incremental cost with incremental benefit (500,000 /200) It receives benefits of 200 after funding 500,000 to endoscopy department

For physical therapy= ICMR would be 2000 by dividing the incremental cost with incremental benefit (300,000 /150) It receives only benefits of 150 after funding 300,000 to physiotherapy department

For lab testing = ICMR would be 3000 by dividing the incremental cost with incremental benefit (3 00,000 /100). It receives benefits of 100 after funding 300,000 to lab testing

For Ear nose throat= ICMR would be 3000 by dividing the incremental cost with incremental benefit (900,000 /200). It receives only benefits of 200 after funding 900,000 to EAR, nose, throat department

Nephrology= ICMR would be 1000 by dividing the incremental cost with incremental benefit (200,000 /200). It receives benefits of 200 after funding 200,000 to nephrology department

Occupational therapy= ICMR would be 10000 by dividing the incremental cost with incremental benefit (500,000 /50). It receives only benefits of 50 after funding 500,000 to occupational therapy

ICMR gives the best evidence of funding to the department who receives care and benefited easily. If the procedure above the threshold, the funding will not be allocated. If the funding the below the threshold, can be funded.

Threshold of ICMR is $ 50,000, $150,000 per QALY in order to chronic value of money

The following departments can be give the funding according to the total spending by the hospital

1. Intensive care unit

2. Nephrology

3. LABTESTING

4. Physical therapy

Other department cannot be provided with funding. Because allocated funding is $2,000,000. But According to ICER and benefits of incremental, the funding is allocated to each department. The department who receives funds, the benefit from receiving funding is lower than expected and compared to other departments, they are EAR, NOSE THROAT, ENDOSCOPY, BURN CENTER, and OCCUPATIONAL THERAPY. The benefits received from funding to departments are intensive care units, nephrology, lab testing, and physical therapy