Lecture 5-6

Question 1

Decision Node

Answer 1

A decision node is at the start, where a decision needs to be made, branches are the choices, only one decision node but can have many possible choices

Question 2

Chance Node

Answer 2

A chance node is a point on the tree where chance determines the outcome

Question 3

Incremental Cost-Effectiveness Analysis (CEA)

Answer 3

ICER= (Cost of Treatment A-Cost of Treatment B)/ (Effect of treatment A - Effect of Treatment B)

Question 4

Resource cost

Answer 4

value of what we are willing to give up to acquire a resource

Question 5

Market prices = opportunity costs

Answer 5

if …
A.There are many buyers and sellers in the market
B.Buyers are fully informed about product characteristics
C.Price is based on agreement between a willing buyer and a willing seller (“transaction”)
D.Information about prices is widely available

Question 6

Costing in Economic Evaluation Objectives

Answer 6

Reliability—reasonable precision in estimating costs
►Reproducibility—others can follow the approach
►Validity—credibility of findings

Question 7

Estimating Costs in Economic Evaluation

Answer 7

Three steps

1. Identify all the relevant resources that will be consumed
2. Measure or quantify the resources used
3. Value resources: place a monetary value on resources

Question 8

Type of Costs—Mammogram

Answer 8

Formal health care sector
►Cost of screening
►Cost of further screening
►Cost of breast cancer treatment
►Cost of side effects
►Cost of (related) future health care services
►Informal health care sector
►Time cost of attending screening and treatment
►Transportation cost to appointments
►Caregiver times costs (valued by wages)
►Non-health care sector
►Lost wages and productivity due to treatment
10

Question 9

Micro-costing

Answer 9

Each contingent component of a broad category resource use is estimated, and a unit cost is derived for each
►Personnel
►Equipment
►Overhead

Question 10

Macro-costing

Answer 10

Uses generalized data to measure cost of intervention
●
Acute care hospitalization
●
Other institutional services
●
Outpatient-based care
●
Physician and other professional services
●
Drugs, supplies, and equipment
●
Often attainable from a database, e.g., Medicare

Question 11

Micro-Costing and Macro-Costing

Answer 11

The approach and level of detail in measuring or estimating cost of an intervention may vary depending on:
►Study objectives (e.g., cost of existing treatment/program or new treatment/program
►Data available for the analysis
●Billing data? Basic input factors such as wage rates, cost of supply items.

Question 12

Disadvantages of micro-costing

Answer 12

Micro-costing more precise but takes considerable time and effort
►May be less generalizable (costs are specific to place where they are measured)
►Takes considerable time and effort
►Only necessary if the intervention not only affects whether or how often a category of resources is used, but also affects the process of how resources are used
●Fortunately, this is pretty rare!