SAH icon
A New Look is Coming Soon is improving its website with a more improved User Interface and Functions
 +1 (315) 557-6473 

Economic Evaluation and Decision-Making in Healthcare: A Comprehensive Analysis

Explore the intricate world of healthcare economics and decision-making in our comprehensive analysis. Delve into the four key economic evaluation studies, uncovering their similarities and distinctions. Calculate quality-of-life indices and mean quality-adjusted life years, providing essential insights into patient well-being. Witness the impact of a groundbreaking intervention on patients' lives, with significant improvements backed by statistical significance. Discover the financial, direct, and societal costs associated with the intervention, and determine its cost-effectiveness. Finally, we weigh the results against a societal cutoff value to make informed policy decisions. This journey offers a holistic view of healthcare decision-making, bridging economics with patient welfare.

Problem Description:

The data analysis assignment involves a comprehensive analysis of economic evaluations and decision-making related to the quality of life for HIV positive patients living with AIDS. It encompasses four questions that tackle topics like economic evaluations, quality-of-life indices, cost analysis, and decision-making based on cost-effectiveness.

Question 1: Economic Evaluation Studies (20 points)

Summary: In this question, we explore the similarities and differences between the four types of economic evaluations: cost-effectiveness analysis (CEA), cost utility analysis (CUA), cost-benefit analysis (CBA), and cost-minimization analysis (CMA).


  • CEA: Measures costs against clinical effectiveness, often using life-years or QALYs.
  • CUA: Similar to CEA but quantifies results in terms of utility or quality of life.
  • CBA: Compares monetary benefits with costs, quantifying benefits in monetary terms.
  • CMA: Compares costs with similar clinical effectiveness, only considering costs.

In Summary: These evaluations all compare costs and benefits but differ in how benefits are measured and the assumption of clinical effectiveness.

Question 2: Quality of Life Index Calculation (10 points)

Summary:This question focuses on calculating the quality-of-life index using given data from a dataset (HATTOT variable) and the mean number of years patients have lived with AIDS.


  1. Quality-of-life Index Calculation: Quality-of-life score = 97.8/145 (or 67.45%).
  2. Mean Quality-Adjusted Life Years (QALYs) Calculation: QALYs = 17.7 years * 0.6745 = 11.9387.

Question 3: Impact of New Intervention (10 points)

Summary: This question considers the effect of a new intervention on patients' quality of life after 20 years and evaluates statistical significance.


  • Mean Change in QALYs: Experimental group: 18 - 11.9387 = 6.0613.
  • Statistical Significance: Significant improvement (p < 0.05) based on a t-test for independent samples.

Interpretation: The intervention significantly improved patients' quality of life.

QALYs at baseline QALYs at study end Statistical Significance
Experimental group As per question 2b above 18 p < 0.05, t-test for independent samples
Control group Same baseline as experimental group 13.5

Question 4: Cost Analysis (20 points)

Summary: This question delves into the financial, direct, and societal costs associated with the new treatment and control groups over 20 years.


  1. Financial Cost of Treatment: Experimental group: $10,500; Control group: $14,000.
  2. Direct Cost of Treatment: Experimental group: $6,000; Control group: $0.
  3. Societal Cost of Treatment: Experimental group: $12,000; Control group: $18,000.
  4. Incremental Cost per QALY (Financial Cost Model): $2,333.33.
  5. Incremental Cost per QALY (Direct Cost Model): $1,333.33.
  6. Incremental Cost per QALY (Societal Cost Model): -$1,333.33.

Interpretation: The new treatment is cost-effective in the direct and societal cost models, with the societal model indicating cost savings.

Question 5: Decision Making (20 points)

Summary: This question involves making a policy decision based on cost-effectiveness.


Based on the results, the decision to implement the new intervention for HIV positive patients living with AIDS should consider multiple factors. The financial cost model suggests it is slightly above the society's agreed-upon cutoff value, but the direct and societal cost models indicate cost-effectiveness and even cost savings. Nonetheless, policy decisions should also consider budget impacts, feasibility, and other relevant factors.

Recommendation: Implement the new intervention as it is cost-effective and may improve patients' quality of life, as indicated by the direct and societal cost models. However, make an informed decision considering various factors.