First exam

Question 1

What are opportunity cost

Answer 1

The cost of anything you decide to is the benefit from the next best thing that could of been done

Question 2

What are direct cost, indirect, intangible

Answer 2

Cash payment made for services/ Time or productivity/ pain and suffering

Question 3

What is prevalence

Answer 3

Number of patients who have ANY STAGE of an illness AND adds up all the services being used for that illness IN that time period

Question 4

What is incidence

Answer 4

Counts the number of patient who become ill in a particular time period then ESTIMATES the lifetime costs associated with that illness for those people

Question 5

When is the incidence and prevalence different, which is theoretically more accurate for predicting future costs

Answer 5

Long term illnesses that have advances in treatments, incidence

Question 6

What are the types of perspective

Answer 6

Patient (and or family), provider (hospital, pharmacy, physician), payer (insurer/government), societal (patient + provider + insurer)

Question 7

What is the human capital approach to measuring indirect costs

Answer 7

How productivity is effected due to an illness (uses wages)

Question 8

What is the willingess to pay method approach to measuring costs

Answer 8

Values time spent sick by what people would be willing to pay to avoid spending time sick (uses income)

Question 9

What are the two main criteria for economic evaluations

Answer 9

Cost and benefits (outcomes), AT LEAST two alternatives

Question 10

What is the distinguishing feature of CMA

Answer 10

The outcomes are the SAME but the COST is DIFFERENT (least expensive)

Question 11

What is the decision node in decision tress, terminal nodes, chance nodes

Answer 11

Decision made on what is best choice (decision A or Decision B), Final events (cost associated with it), probability nodes of uncertainty of an event (mutually exclusive= one or the other)

Question 12

What is the expected value

Answer 12

WEIGHTED AVERAGE cost or benefit (NOT a guarantee)

Question 13

T/F: For chance nodes the probability of each outcome always ads up to one

Answer 13

True

Question 14

What is a sensitivity analyses, what is the importance

Answer 14

Mean of altering best estimates to determine the certainty of the decision/ says which inputs are important, know which inputs are most uncertain

Question 15

What is a one-way sensitivity analysis

Answer 15

Alter a single variable in the model and determine IMPACT on the model predictions

Question 16

What is the threshold value in a one way sensitivity analysis, critical variables

Answer 16

Value where a choice of superior treatment changes, variable that are inputs that impact change in treatment

Question 17

What is a cost benefit analysis (CBA), strengths

Answer 17

Measures ALL benefits and ALL cost in dollars, comparisons between DIFFERENT health treatments, only analysis that says whether it is worthwhile to spend resources on a particular treatment

Question 18

What is revealed preference or continent evaluation

Answer 18

Looks at prices seen in the market related to changes in mortality

Question 19

What is discounting, what is the equation for discounting

Answer 19

Dollars this year can turn into more dollars next year by investing at an interest rate (less money now BUT more in the future),Mt(1+R)^N

Question 20

T/F: If the Net Present Value is greater than 0 the benefit is positive

Answer 20

True

Question 21

T/F: If the Benetif Cost Ratio is greater than 1 the benefit is positive but the magnitude of benefit is not known

Answer 21

True

Question 22

What are weakness of CBA

Answer 22

Difficult to measure outcome in monetary value, valuation methods are dependent on perspective, knowing the value of lost life

Question 23

How is costs and benefits compared in CBA

Answer 23

Across time

Question 24

What is the discount factor

Answer 24

1/(1+R)

Question 25

What does cost effectiveness analysis result in

Answer 25

Ratios of costs to effects, tells how money and health change compared to doing nothing

Question 26

What are incremental ratios

Answer 26

Comparison between less costly and less effective treatment to a more costly more effective treatment (MUST BE COST/EFFECTS)

Question 27

What are the steps to maximizing health following a CEA

Answer 27

1) Make a table of cost and effects sorted by costs or effects
2) Eliminate First Order dominated treatments
3) Calculate Incremental Ratios
4) Eliminate Second Order dominated treatments
5) Calculate final ratios

Question 28

What is first order dominated treatment

Answer 28

More expensive/less health (COST MORE/GET LESS)

Question 29

What are the strengths of CEA

Answer 29

Allow comparisons among similar treatment options, treatments produce similar outcomes, identifies less cost-efficient options

Question 30

What are the weakness of CEA

Answer 30

Does not compare treatment options which produce different outcomes, CEA and ratios do not determine whether treatments are worthwhile overall

Question 31

What is the equation to find Cost-effectiveness ratios (CER)

Answer 31

Total Cost/Total Effect (does not provide guidance in decision making

Question 32

What is the equation for incremental CER (ICER)

Answer 32

CostB-CostA/EffectB-EffectA

Question 33

What is extended dominance

Answer 33

Effectiveness is produced at a higher marginal cost than necessary

Question 34

What is the main difference between CEA and CUA

Answer 34

USES Quality Adjusted Life Years (QALY) as its measure of effectiveness

Question 35

What are the methods of deriving utility scores

Answer 35

RAting scale (Visual analog scale), Standard gamble (scenario with probability of death, 1-probability of death), time trade off

Question 36

How is QALY found

Answer 36

(number of years in health state)(utility score)