IE 492 DECISION MAKING IN HEALTH CARE

Assignment 1

Due: March 6th, 2017 (Monday) by 13:40

For full credit, please remember to show your work and how you arrived at your answer.

1. Suppose that you are responsible for allocating a fixed budget across a variety of health care
programs. The following programs are available to you:

Net resource cost Net health effectiveness

Program
per patient ($) per patient (QALYs)
A 15,000 1.0
B 20,000 2.0
C 50,000 2.5

These are costs and effects per patient. Each program has a target population of 100 patients
maximum, but a program may be funded to serve less than 100 patients.

a. Assume that you have a fixed budget of $3,500,000, and that your goal is to achieve the largest
possible gain in health. Which programs should you fund? Which programs would you fund if you
had a budget of $4,000,000? These programs are not mutually exclusive; that is, more than one may
be implemented.

b. Now suppose that programs A and B are mutually exclusive; that is, both cannot be funded at
the same time. (Program C is still independent of A and B). Assume a budget of $4,000,000. Which
programs would you fund and for how many patients? Again, your goal is to achieve the largest
possible gain in health.

2. Interview with two people to assess how they value the following two health states:
- Health State A: being blind
- Health State B: being a migraine headache sufferer

For your assessment, use the following four techniques:

- Visual Analog Scale (VAS)
- Standard Gamble (SG)
- Time Trade-off (TTO)
- EQ-5D

For SG and TTO, you can use any of the three methods we discussed in class (monotonic, ping-pong,
bisect) when trying different probability and time values.

Describe the details of the steps you followed in your assessment. Based on the utilities you obtained,
comment on the impact of the technique and the respondent in the process: Do you obtain the same
values with each technique / for each person?