What is the difference between cost effective ratio

Reference no: EM133366864

QUESTION Mr Sakala Ngoma fell off his bicycle and damaged his neck. If he doesn't get treated his quality of life (QoL) per year is expected to be 0.75 for the rest of his life (five years). Mr Sakala Ngoma has the following two treatment choices: Neck surgery: Costs K4,000 immediately and increases Mr Sakala Ngoma's Qol to 1.0 for the remaining life (four years) Physiotherapy: Costs K1000 per year (at the beginning of each year) and increases Mr Sakala Ngoma's Qol to 0.8 for five years. Assume a discount rate (r) of 5% per annum.

a. What is the difference between cost effective ratio and incremental cost effective ratio?

b. Calculate the QALYs for each treatment.

c. Conduct the CER (cost effective ratio) and help Mr Sakala Ngoma decide which treatment to take.

Reference no: EM133366864

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