A) Severely ill patients who were hospitalized with pneumonia were placed on a new pharmaceutical drug. The medicine resulted in an extra day of hospitalization (the length of stay went from 6 to 7 days). The daily cost for a hospital stay is $1,600. The drug costs $600 for the dose. Also, administering the medication and monitoring the patient after treatment takes an additional hour of nursing time (wage = $40 per hour), and $20 in supplies was used in administering the drug. The mortality rate for patients using the drug was 20% and 24% for those that didnt. What is the cost-effectiveness ratio for using the medicine?

B) If an insurance company is willing to pay for any treatment with a cost-effectiveness ratio of $50,000 and below, would they approve the drug treatment?

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