Friday, March 14, 2014

Cost Analysis of Prostrate Tests

One of the topics I briefly look at in Prin. of Microeconomics is benefit cost analysis.  While this subject if briefly covered, here is an interesting example of how this concept would be applied - in health care policy.

The New York Times reported that the US Preventative Services Task Force recommended that blood tests to screen for prostrate cancer did not save lives but added more costs than benefits.

Let's look to see if the cost is worth it?  If the panel used Cost-Utlity Analysis which is measured as follows = (Cnew – Cold)/(QALYnew – QALYold), where C is my notation for the procedures cost and QALY is the quality of adjusted life years and is measure as: life expectancy *health utility index, in which the health utility index is scaled from 1 (perfect health) to 0 (death) and the health utility index is given by medical professionals.

Thus it seems the US Preventative Services Task Force has concluded that the "old procedure" which is to do nothing provides greater cost utility than screening for prostrate cancer.  Hence the cost is either prohibitively high or the impact on health of those screened is prohibitively reduced.

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