Disease X is a debilitating disease which often results in hospitalization, episodes of disability, and decreased mobility. In severe cases, individuals may suffer from chronic pain, and headaches for multiple years. Currently, there are 10,000 diagnosed cases per year of Disease X. Specifically as a result of Disease X there are:

7,000 hospitalizations per year

14,000 physician visits per year

1,000 (premature) deaths (which occur if not diagnosed and treated early enough)

On average, the individuals would have lived another 17 years otherwise, 10 of those years still employed

People with Disease X, who survive, have an average Health Utility Index (HUI) score of 0.55 from the time of their diagnosis of Disease X (life expectancy otherwise not affected).

They also experience, on average, 4 months off of work.

A new screening test for Disease X has been discovered by the Acme Pharma Company. The screening test can detect the presence of one of the genes that causes Disease X, several years before symptoms appear, and when medical treatments, which can totally cure the disease, are still effective. As a result of the screening test there are 50% fewer cases of Disease X per year, and all of the associated adverse health outcomes fall by a similar amount. (i.e. The screening programs results in a 50% decrease in the number of hospitalizations, physician visits, drug costs, and premature deaths. Everything else remains the same. The individuals who are diagnosed with Disease X will still have a HUI of 0.55 and live another 17 years.)

The annual cost for implementing this screening test, for the entire population, is $5 million per year.

The average annual wage rate is $35,000

The average cost for a hospital admission for Disease X is $20,500

An average physician visit is billed at $500

Some drugs can alleviate the symptoms associated with Disease X. On average, each patient spends $5,000 on these drugs annually (Note that the above utility scores and outcomes take these effects into account).

The results of a recent survey showed that people were willing to pay $20,000 per year, on average, to alleviate the symptoms associated with Disease X

a) Describe the burden of illness in terms of the economic implications - i.e. what are the total resource costs associated with the disease (In terms of direct costs and indirect costs).

b) Describe the burden associated with the health outcomes (in utility and dollar terms, if possible)

c) Derive the ICER (both with and without the lost production costs) associated with the new screening test in terms of: a. Lives saved b. Life-years gained c. QALYs gained.

d) Is this screening test cost-effective? Why or why not?

e) Would you recommend that the screening test be implemented?

f) Derive the Cost-Benefit Ratio associated with the screening test