ECON240 Drexel University Expected Value Benefit of Pneumonia Vaccine Paper

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Economics

ECON240

Drexel University

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Question 1: Expected Value Benefits

What is the expected value benefit of the old vaccine?

What is the expected value benefit of the new vaccine?

Question 2: Expected Value Costs

What is the expected value cost of the old vaccine?

What is the expected value cost of the new vaccine?

Question 3: Cost-Utility Ratio

Show the cost-utility ratio for the opportunity cost of continuing 100% coverage for the new vaccine.


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1 a3-ds1 (for teacher's use] Econ 240: Assignment 3: Costs and Benefits for Question Set 3 Use this information together with the instructions on your Question Set to answer the questions. A new pneumonia vaccine has been developed which is a little more effective but more expensive to produce than the old vaccine. Medicare covers 100% of the cost of pneumonia vaccinations for everyone in Hahnemann County who is age 65 or older. Now that a new and better vaccine is available Medicare would like to perform a cost-utility analysis to determine the opportunity cost of covering 100% of the cost for the new vaccine. The old vaccine used to cost $16 per dose to produce. The new vaccine costs $35 per dose to produce. But the cost of catching pneumonia is very high. If either vaccine fails, the cost of treating an infected elderly person is, on average, $1870. The following are the conditional probabilities of success and failure for both vaccines: Old Vaccine: Success Rate = 0.84 Old Vaccine: Failure Rate = 0.16 New Vaccine: Success Rate = 0.85 New Vaccine: Failure Rate = 0.15 Copyright © Patricia Awerbuch, 2015. This work may not be used, reproduced, or distributed outside the Drexel LeBow College of Business course Econ 240 Economics of Health Care Systems without the express written permission of the author. 1 a3-ds1 (for teacher's use] Econ 240: Assignment 3: Question Set 3 Topic: Cost-Utility Ratios for Financial Comparison Between Treatment Options Grade Points: 5 Completion = 1 pt Question 1 = 1.5 Question 2 = 1.5 Question 3 = 1 Download the document entitled "Cost&Benefit-QS3. The data and background for answering the questions are in that document. Question 1: Expected Value Benefits What is the expected value benefit of the old vaccine? What is the expected value benefit of the new vaccine? Question 2: Expected Value Costs What is the expected value cost of the old vaccine? What is the expected value cost of the new vaccine? Question 3: Cost-Utility Ratio Show the cost-utility ratio for the opportunity cost of continuing 100% coverage for the new vaccine. Copyright © Patricia Awerbuch, 2015. This work may not be used, reproduced, or distributed outside the Drexel LeBow College of Business course Econ 240 Economics of Health Care Systems without the express written permission of the author. 1 a3-ds1 (for teacher's use] STUDENT NAME: Econ 240: Assignment 3: Answer Sheet for Question Set 3 Grade Points: 5 Completion = 1 pt Question 1 = 1.5 Question 2 = 1.5 Question 3 = 1 Question 1: Expected Value Benefits What is the expected value benefit of the old vaccine? (show your calculations) What is the expected value benefit of the new vaccine? (show your calculations) Question 2: Expected Value Costs What is the expected value cost of the old vaccine? (show your calculations) What is the expected value cost of the new vaccine? (show your calculations) Question 3: Cost-Utility Ratio Show the cost-utility ratio for the opportunity cost of continuing 100% coverage for the new vaccine. (show your calculations) Copyright © Patricia Awerbuch, 2015. This work may not be used, reproduced, or distributed outside the Drexel LeBow College of Business course Econ 240 Economics of Health Care Systems without the express written permission of the author.
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Running head: COSTS AND BENEFITS

Costs and Benefits
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COSTS AND BENEFITS

Expected value benefit of ...


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