Health Economics: QALYs, ICER & Cost-Effectiveness

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Turn years in three heart-failure health states into QALYs for standard care and the new therapy NT-7, calculate the QALYs gained, and compute first-year QALYs from trial utility measurements with the area-under-the-curve (trapezoid) method.
• Discount six years of NT-7 costs and QALYs to present values with year 1 undiscounted, and see why NPV alone gets the timing wrong.
• Calculate the incremental cost-effectiveness ratio of NT-7, spot a dominated strategy, run the incremental analysis step by step and choose the strategy to adopt at a willingness-to-pay threshold.
• Place six programmes of the authority on the cost-effectiveness plane, label each quadrant with a nested IF, calculate the ICERs that make sense and draw the plane as a scatter chart.
• Calculate the net monetary benefit of four strategies at four willingness-to-pay values with one mixed-reference formula, pick the best strategy at each λ with INDEX/MATCH and compute an incremental NMB.
• Run a cohort of 1,000 standard-care patients through a Well–Sick–Dead Markov model for five yearly cycles, step by step with plain formulas, and add up the QALYs of the cohort.
• Calculate the base-case ICER of NT-7 from five parameters, vary the QALY gain between its low and high value, find the most influential parameter and draw a tornado diagram.
• Estimate the five-year budget impact of funding NT-7 for the authority: eligible patients, uptake, drug cost, hospital savings, net impact per year and in total, and the cost per member per month.