2. Standard Gamble
In a standard gamble, an individual was presented with two choices: a) a certain health state
of frequent migraine attacks for the rest of life, b) a treatment with a better outcome (fully
regained health) and a worse outcome (immediate death). The individual was asked what
probability of the better outcome would make her indifferent between undergoing the
treatment and remaining in the state with frequent migraine attacks.
(a) If the respondent reported that she is indifferent between the state with frequent
migraine attacks and a treatment with 0.6 probability of immediate death, what is her
utility score of the health state with frequent migraine attacks? [6 points]
(b) Given the utility score in a), suppose that she can live with frequent migraine attacks
for 30 years, or she can undergo a new treatment with which she will regain full
health for 20 years. The new treatment costs $200,000, whereas the controller drug
costs $30,000 over 30 years (present value). Calculate the ICER of the treatment (cost
per QLAY gained). Discuss whether treatment is worth undergoing? |
