GIVEN TREATMENT CHOICES

Treatment cost Life expectancy

Treatment A $3,000 10 years Treatment Z $5,000 13 years Treatment B $7,000 17 years Treatment Y $9,000 19 years Treatment C $11,000 27 years Treatment X $13,000 23 years Treatment D $15,000 31 years Treatment W $17,000 29 years No treatment $0 2 years

1. Identify obviously dominated treatments, if any. Identify each dominated treatments and the corresponding dominating treatments that dominate it.

2. Eliminate these obviously dominated treatments from the table for further analysis

3. Solve for the ACER for the remaining treatments

4. Solve for the ICERs

A. If we start from treatment A B. If we start from treatment Z C. If we start from treatment B D. If we start from treatment Y

5. Are there marginally dominated treatments? Identify