2. Patient BN is a 36-year-old female with a type of organ failure that reduces her quality of life to half of what it would be in good health. Without treatment she can expect to live only two years. With a successful transplant, BN can expect to live four years and have a quality of life that is near 80% what she would enjoy in good health. However, the transplant costs $100,000, plus $10,000 each year for drugs and follow-up care, and carries a 15% risk of rejection resulting in immediate death. a) (20) What is the cost per additional year of life gained (without discounting for time or quality of life)? b) (20) What is the cost per discounted Quality-adjusted Life-year (QALY) gained (assuming a 5% time discount rate)?

1. The World Health Organization (WHO) is considering sending in a team of experts to deal with an outbreak of schistosomiasis in a developing country. It costs $25,000 for every additional five team members sent. Sending a larger team will allow WHO to prevent more fatalities, and they estimate the following effectiveness: Number of Team Members 0 5 10 15 20 25 30 35 40 45 50 Number of Deaths 1,200 500 200 100 60 40 30 25 22 20 20 1 a) (20) Please plot the incremental cost-effectiveness ratios in a two-dimensional graph with total effectiveness along the horizontal axis and incremental cost-effectiveness ratios along the vertical axis. b) (20") If saving a life is valued at $10,000, what is the optimal number of team members sent? c) (20) Suppose the WHO has a total budget of $150,000 to be spent on fighting this epidemic. How would your answer to b) change