Suppose you must rely exclusively on cost-effectiveness analysis (CEA) to determine whether a category
of people receives an expensive, potentially life-saving, intervention. Which of the following
considerations must you keep in mind when making your decision? - Answer -CEA ignores the possibility
that certain unidentified individuals in a group may have a greater than normal positive response to the
treatment
Suppose your assignment is to use the standard time trade-off approach to measure quality of life. You
are given the following information: An individual is faced with living the remaining 10 years of their life
suffering from severe osteoporosis. The individual reveals that they would be willing to give up four of
those years to live the remaining six in perfect health. What is the utility of one year in a chronic health
state relative to perfect health? - Answer -0.6
The concept of quality-adjusted life year (QALY): - Answer -is used extensively to evaluate medical care
resource allocation within government-run programs on fixed budgets, especially in Europe.
The accompanying diagram depicts the relationship between health status and medical care spending
for a particular country. Assume the current spending level is S on TP . All of the statements below are
true? - Answer -S1 levels of spending are often described as spending on the flat of the curve.
There are substantial differences in medical care use by demographic characteristics such as age, sex,
and marital status. Which of the following statements is true? - Answer -Adult women spend more
money on medical care than men do.
, A physician's ability to induce demand is greatly enhanced when: - Answer -patients have difficulty
gathering and processing information.
According to Grossman (1972), how is the demand for medical care determined? - Answer -It is derived
from the demand for health.
The intangible costs associated with reduced quality of life include: - Answer -pain and suffering.
The primary tasks required to conduct a successful cost effectiveness study are all of the following
except: - Answer -identifying the overall cost of a health condition on society.
Under which of the following circumstances is the principal-agent relationship likely to be most
problematic? - Answer -Between surgeons and patients
Which of the following would likely lead to the greatest improvement in the health status of the
population in the United States? - Answer -Improved lifestyles changes
Many economists consider medical care a superior good. Which of the following statements is true
regarding a superior good? - Answer -As consumer income increases, consumers spend more on
superior goods.
When measuring the effectiveness of a treatment, surrogate measures reflect clinical efficacy and
include: - Answer -bone-mass density (BMD).
Which of the following is least responsible for the reduction in mortality rates in Europe and North
America? - Answer -More effective medical interventions
Researchers use cost-of-illness studies for all of the following except to: - Answer -compare the relative
efficiency of treating various conditions.
The standard cut-off for cost per quality-adjusted life year (QALY) used by most governmental decision
makers is set in terms of a multiple of national per capita income. The value of the threshold is usually
what percent of national per capita income? - Answer -100
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