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Question: the following information has been gathered on the costs and...

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The following information has been gathered on the costs and effectiveness of the two treatments, A and B. In this problem, costs and consequences are not discounted.

Treatment A

Treatment B

Mortality rate

2%

5%

Life expectancy for survivors

30 years

20 years

Initial treatment cost

$20,000

$10,000

Follow up costs, year 1

$5,000

$1,000

Annual follow up costs, all subsequent years

$1,000

$500

a. What is the total cost for the survivors receiving treatment A? $54,000 For decedents (assuming sudden death)? $20,000

b. What is the total cost for survivors receiving treatment B? $25,500 For decedents? $10,000

c. What is the expected cost for those patients receiving treatment A? $52,540

d. What is the expected cost for those patients receiving treatment B? $23.995

e. Calculate the incremental cost and incremental benefit of the treatment alternatives.

f. C = E =

g. What is the ICER?

ICER = C/E =

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