# ECO 605 Assignment 5.1: Cost:QALY

## ECO 605 Assignment 5.1: Cost:QALY

### Introduction

The following table gives the cost, increase in life years, and the rating of quality of life for four different treatments.

Table 5.1

TreatmentCostIncrease in Life YearsRating of Quality of LifeQALYCost:QALY
A4,600160.16
B8,600180.22
C12,600220.28
D10,000200.25

### Assignment Guidelines

Use the Assignment 5.1 Document (Word) (Links to an external site.) to record your responses.

1. Calculate the QALY for each treatment.
2. Interpret each QALY calculated for each treatment.
3. Calculate the Cost:QALY ratio for each treatment.
4. Interpret each ratio.
5. Based on QALY only, which treatment would be most effective?
6. Based on cost:QALY, which treatment would be most effective?

### Submission

Submit your assignment and review full grading criteria on the Assignment 5.1: Cost:QALY page.

## Week 5: Economic Evaluation and Quality Initiatives of Health Services

Week 5 combines related topics from different chapters in the two texts for this course. One major topic is the economic evaluation of health services. Economic evaluation involves the analysis of new medical interventions and investigates whether these innovations are economically justified. The other major topic is quality initiatives and whether quality improvements make economic sense. In both topics, techniques to assess economic viability are described.

Review a list of all items due this week in your course’s syllabus.

## Lesson 1: Economic Evaluation of Health Services

This lesson will identify the different purposes of an economic evaluation. There will also be an identification of the steps involved in an economic analysis. The different types of economic analysis will be described, including a description of choosing the proper analysis. Also, there will be a description of the guidelines of a cost-effectiveness analysis. How to do a benefit-cost analysis is outlined.

### Learning Outcomes

By the end of this lesson, you will be able to:

• Identify the different types of economic evaluation analysis.
• Describe when to use each type of economic evaluation analysis.
• Select the proper economic evaluation process for a situation.

Before attempting to complete your learning activities for this week, review the following learning materials:

### Learning Materials

Read the following in your Economics of Health and Medical Care textbook:

Chapter 12, “Economic Evaluation of Health Services” (pp. 217–234)

Review the following in your Financial and Business Management for the Doctor of Nursing Practice textbook:

Chapter 8, “Quality Initiatives: Building the Business Case for Quality” (pp. 201–224)

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These chapters provide additional references to economic evaluation and quality initiatives of health services.

Assignment Rubric
CriteriaRatingsPts
Responses
5 to >4 pts
Meets Expectations

Answers to all questions are correct. Graphs are all properly labeled and axes all properly identified. All graphs are properly drawn. (If applicable.)

4 to >2 pts
Nearly Meets Expectations

Answers to most questions are correct. Graphs are mainly labeled correctly and axes are usually properly identified. (If applicable.)

2 to >0 pts
Does Not Meet Expectations

Answers to most questions are incorrect. Graphs are not labeled or axes are not properly identified. Graphs are not drawn properly. (If applicable.)

/ 5 pts
Explanations
5 to >4 pts
Meets Expectations

Provides thorough explanation of rationales and skillfully applies course materials to develop conclusions. There is always a close and strong connection between the explanations provided and the material from the lessons.

4 to >2 pts
Nearly Meets Expectations

Provides adequate explanation of rationales, but conclusions could be supported more strongly using course materials. There is a connection between explanations and concepts from the lessons but this connection is not always strong or clear.

2 to >0 pts
Does Not Meet Expectations

Neither provides adequate explanation of rationales nor uses available resources to substantiate conclusions. There is no close connection between the explanations provided and the concepts given in the lessons.

/ 5 pts
Structure and Mechanics
5 to >4 pts
Meets Expectations

Contains one or two errors in grammar, spelling, and/or APA format.

4 to >2 pts
Nearly Meets Expectations

Contains several errors in grammar, spelling, and/or APA format.

2 to >0 pts
Does Not Meet Expectations

Contains many errors in grammar, spelling, and APA format.

/ 5 pts
Total Points: 0

## Summary

In the first lesson this week, we reviewed the steps of economic analysis. The different types of economic analysis were described as well as the way of selecting the proper economic analysis.

Improving quality while maintaining an efficient use of resources has become an ongoing objective in the healthcare sector. In the second lesson, two strategies to improve quality were described. These were the structure/process/outcome strategy and the plan-do-check (PDCA) or plan-do-study-act (PDSA) strategy. To determine if a quality improved was achieved, evaluation techniques such as benchmarking, cost per encounter, quality-adjusted life year (QALY) and cost per QALY ratio were described. Lastly, there were descriptions of the techniques of risk adjustment and risk-benefit analysis.