1.Consider two alternative medical treatments for Lebtosis.

Treatment 1: Cost: $4,000Benefit: Reduces 1-year mortality by 8% points

Treatment 2: Cost: $10,000Benefit: Reduces 1-year mortality by 12% points

a.Calculate the cost of a year of life saved associated with each technology.

b.Assume treatment 1 was currently being used, and treatment 2 is a new technology. Assess the cost-effectiveness of switching from treatment 1 to treatment 2 (i.e., calculate an incremental cost effectiveness ratio).

c.Reflect on the cost-effectiveness of treatment 2 in parts (a-b). Which approach to assessing the cost-effectiveness of this new treatment seems more relevant?