Assume there is treatment for Disease X and costs related to this treatment is given below: (3 points)
Service Costs
Travel cost to specialized testing site $75
Wage loss due to time off to get treatment $250
Treatment covered by health insurance plan $500
Out-of-pocket medical cost for treatment $200
Emotional pain $200
Calculate the total costs from the societal perspective?
From the societal prespective, the costs to be considered are wage loss due to time off to get treatment and emotional pain
Wage loss becase this will result in the patient getting impacted in the given society owing to this treatment and emotional pain because this will again have bearings on not only the patient but also the relatives and other acquaintances he gets in contact with
So total societal costs = 250 + 200 = $450
Calculate the total costs from the healthcare insurance perspective?
This is basically the treatment covered by health insurance plan as well as the out-of-pocket medical cost for treatment. The health care insurance plan as the name implies will definitely be part of this but the out of pocket medical cost incurred will in turn impact the healthcare insurnace plan in coming years for the patient
So total costs from this perspective = 500 + 200 = $700
Calculate the total costs from the patient perspective?
From the patient's perspective, all of the above costs will be considered. We have talked about the societal and healthcare insurance costs that are definitely impacting the patient
The balance cost of travel cost to specialized testing site will be borne by the patient
So total cost = 450 + 700 + 75 = $1225
Is the costs calculated from question 2 for the healthcare insurance perspective financial or economic costs?
this cost is a combination of healthcare insurance plan as well as out of pocket medical cost. The healthcare insurance plan is something that the patient has already paid for and hence is an economic cost and not a financial cost. It would have been a financial cost had it been incurred during the treatment
On the other hand, the out of pocket medical cost is financial cost as it is incurred now
Calculate the net benefits for each intervention.
Cost Benefits
A 1,500,000 1,750,000
B 2,000,000 1,500,000
C 500,000 1,000,000
D 2,500,000 3,500,000
For A, net benefits = 1750000 - 1500000 = 250,000
For B, net benefits = 1500000 - 2000000 = -500,000
For C, net benefits = 1000000 - 500000 = 500,000
For D, net benefits = 3500000 - 2500000 = 1,000,000
Here the net benefits for D are the maximum hence this would be most beneficial for treatment
Would you recommend using Treatment A, B, C, or D based on the new information below on the number of people who would get better AND the net benefit that you calculated above?
Of every 1000 people treated the number of people who will get better are:
Treatment A=500, Treatment B=300, Treatment C=100, Treatment D=800
If there is no treatment 100 people out of every 1000 with this disease will get better.
Treatment A is having incremental benefits of treating 400 people with net benefit of 250,000
Treatment B is having incremental benefits of treating 200 people with net benefit of -500,000
Treatment C is having incremental benefits of treating 0 people with net benefit of 500,000
Treatment D is having incremental benefits of treating 700 people with net benefits of 1,000,000
So treatment D is still the best
What would your recommendation be if you were a hospital administrator with a budget of only 2,000,000? Please explain why.
Since my budget is only 2,000,000, i cannot use treatment D above as it costs 2,500,000
Hence for me the options are A, B or C
From previous analysis, we see that treatment A is incrementally treating 400 people with net benefit of 250,000 compared to B and C. Even though treatment C has higher net benefit compared to A, since 400 more patients are getting treated, as a hospital administrator this is more beneficial for me,. Hence I will choose treatment A
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