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Build a model to assess the comparative cost-effectiveness of total hip arthroplasty versus resurfacing arthroplasty for treating arthritic hips in young patients, whereby outcomes are

Build a model to assess the comparative cost-effectiveness of total hip arthroplasty versus resurfacing arthroplasty for treating arthritic hips in young patients, whereby outcomes are to be measured in QALYs and a time horizon of 5 years is to be used. You should use the following information to inform your model:

  1. A recent randomised clinical trial (Underwood 2018) reported a comparison of clinical efficacy between the two procedures, showing that after the procedure , 99% or 98.5% will survive the total hip arthroplasty and resurfacing arthroplasty respectively. And among those who survived, 80% or 92% will have a good function outcome following total hip arthroplasty and resurfacing arthroplasty respectively.
  2. The cost for total hip arthroplasty is $18,000, and the cost for resurfacing arthroplasty is $23,800.
  3. A utility study for patients with arthritic hips (Johns et al 2015) reported the average utility value for 'good function' is 0.90, whilst the average utility value for 'bad function' is 0.65.
  4. Assume no background mortality in the model.
  5. Assume it takes six months post the procedure to determine the functional status of the hip (hint: this needs to be considered when assigning the utility weights for the first six months).
  6. Assume no discounting for either costs or effects

Please provide the Treeage model file with the built model based on:

  • Correct model structure
  • Well-formatted and neat model presentation
  • Correct variable applications and values
  • Correct model functionality and results

Under expected value criterion, should the new drug be made available given a willingness to pay threshold of $50,000 per QALY? Why?

Conduct a one-way sensitivity analysis varying the utility value for good function status from 0.82 to 0.97 in 10 intervals. Does the optimal strategy change at any point? If so, between what utility values does it change?

What is the maximum price (to the nearest cent) that should be charged for the resurfacing arthroplasty given the WTP threshold?

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