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Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter13: Systems Development And Program Change Activities
Section: Chapter Questions
Problem 12P: COST-BENEFIT ANALYSIS Listed in the diagram for Problem 7 are some probability estimates of the...
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![8. Cost-benefit & Cost-effectiveness analysis
Given the information below, answer the questions that follow.
Effectiveness
4 life-years gained
10 life-years gained
Current Treatment
New Treatment
Cost
$100,000
$250,000
A. Calculate the ICER for the new treatment, assuming that the new
treatment would replace the old one. Should the new treatment be
adopted? Why?
B. Calculate the cost effectiveness for both current and new treatments.
(Hint: use the ratio of costs over benefits)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3cf2f30-2e38-482e-ac81-eb0210bb852b%2F20e7be8e-5cc5-4341-a831-af4987485a73%2F1bk1gtq_processed.png&w=3840&q=75)
Transcribed Image Text:8. Cost-benefit & Cost-effectiveness analysis
Given the information below, answer the questions that follow.
Effectiveness
4 life-years gained
10 life-years gained
Current Treatment
New Treatment
Cost
$100,000
$250,000
A. Calculate the ICER for the new treatment, assuming that the new
treatment would replace the old one. Should the new treatment be
adopted? Why?
B. Calculate the cost effectiveness for both current and new treatments.
(Hint: use the ratio of costs over benefits)
![C. What is QALY? Briefly explain how QALY might change your answer
to the above questions.
D. Assume that to be fully vaccinated, people (in a given population of
1,000 individuals) need to get three doses of the new and improved
COVID-19 m-RNA vaccines. What is the marginal cost of each dose?
What is the optimal number of doses suggested by the results of the
cost effectiveness analysis?
Using the averted hospitalization.
Using the averted mortality.
Based on your answers above, which is your preferred cost
effectiveness measure? Explain in 1-2 sentences.
(i)
(ii)
Dose of Vaccine Total Cost per
person
0
$400
$450
$460
0
1
2
3
Averted
Hospitalization
0
20,000
10,000
5,000
Averted
Mortality
0
3,000
1,500
200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3cf2f30-2e38-482e-ac81-eb0210bb852b%2F20e7be8e-5cc5-4341-a831-af4987485a73%2Ft7kz9pd_processed.png&w=3840&q=75)
Transcribed Image Text:C. What is QALY? Briefly explain how QALY might change your answer
to the above questions.
D. Assume that to be fully vaccinated, people (in a given population of
1,000 individuals) need to get three doses of the new and improved
COVID-19 m-RNA vaccines. What is the marginal cost of each dose?
What is the optimal number of doses suggested by the results of the
cost effectiveness analysis?
Using the averted hospitalization.
Using the averted mortality.
Based on your answers above, which is your preferred cost
effectiveness measure? Explain in 1-2 sentences.
(i)
(ii)
Dose of Vaccine Total Cost per
person
0
$400
$450
$460
0
1
2
3
Averted
Hospitalization
0
20,000
10,000
5,000
Averted
Mortality
0
3,000
1,500
200
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