A Hypothetical Disease

A Hypothetical Disease
Patients with Oh My Aching Back Syndrome (OMABS) present with an acute episode of
back and leg pain, and are diagnosed by a distinct rise in their imachin protein levels.
OMABS can be a very debilitating disease. If patients do not undergo any intervention
for OMABS they have a 20% chance of never experiencing further symptoms for the
remainder of their life (i.e., although they have OMABS they do not experience any
decrease in their quality of life or remaining life expectancy). For patients who do
experience the disabling symptoms, 62.5% will experience the mild form of the disease
and the rest will experience the severe form, and the symptoms associated with
OMABS will last for the remainder of a patient’s life. Unfortunately, at the time of
diagnosis, it is impossible to determine which form of the disease the patient will have.
Mr. Jones has just been diagnosed with OMABS. He has answered the following
standard gamble questions.
• He is indifferent between the certainty of having symptoms associated with the
severe form of OMABS and a 60% chance of death and a 40% chance of life in
perfect health.
• He is indifferent between the certainty of having symptoms associated with the
mild form of OMABS and a 25% chance of having symptoms associated with the
severe form of the disease and a 75% chance of life in perfect health.
a. Assume that Mr. Jones’ remaining life expectancy is 15 years. How many qualityadjusted life years does he have remaining if he is not treated for his OMABS?
Assume that the initial acute episode has resolved and that if he becomes
symptomatic it will happen right away. (10 points)
b. How many discounted quality-adjusted life years does he have remaining if he is not
treated? Assume an annual discount rate of 3% and that each year of life is counted
at the end of the year. (10 points)
The disease is also costly. Annual disease-specific costs are $1000 and $5000 for the
mild and severe forms of OMABS, respectively.
c. What is the present value of the disease-related costs if Mr. Jones has the mild form
of the disease? What is the present value of the costs if Mr. Jones has the severe
form of the disease? Assume an annual discount rate of 3% and that costs are all
incurred at the end of each year. (10 points)
d. What is the present value of the disease-related costs for Mr. Jones at the time of
diagnosis? (10 points )
There is medical therapy available to treat OMABS but it must be started at diagnosis,
prior to the onset of any symptoms. RxABS reduces the symptoms associated with both
forms of OMABS (mild and severe). Unfortunately, patients who do not experience the
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symptomatic form of the disease have permanent side effects associated with the
therapy that exactly mimic the symptoms associated with having the mild form of
OMABS on treatment. Mr. Jones responded to some additional standard gamble
questions.
• He is indifferent between the certainty of having symptoms associated with the
mild form of OMABS on RxABS and a 70% chance of having symptoms
associated with the mild form of OMABS off treatment and a 30% chance of life
in perfect health.
• He is indifferent between the certainty of having symptoms associated with the
severe form of OMABS on RxABS and an 85% chance of having symptoms
associated with the severe form of OMABS off treatment and a 15% chance of
life in perfect health.
e. If Mr. Jones opts for RxABS, how many discounted quality-adjusted life years does
he have remaining? (10 points)
f. The annual cost of RxABS is $1000 for years 1-5; $700 for years 6-10, and $400 for
years 11-15. If Mr. Jones opts for RxABS, what is the present value of the total costs
(disease specific and treatment specific) of this strategy? (10 points)
There is also surgical option available for treating OMABS. The procedure OpABS
reduces a patient’s chance of being symptomatic by 20%. (Of those patients who are
symptomatic, 62.5% still experience the mild form.) Unfortunately, 2 out of every 100
patients who undergo surgery die from the procedure.
g. If Mr. Jones opts for surgery, how many discounted quality-adjusted life years does
he have remaining? (10 points)
h. The cost of surgery is $20,000. If Mr. Jones opts for surgery with OpABS, what is the
present value of the total costs (disease specific and treatment specific) of this
strategy? (10 points)
i. What is the best option for Mr. Jones if he wants to maximize his discounted qualityadjusted life years? What is the best option for Mr. Jones from a cost-effectiveness
standpoint? (10 points)
j. It turns out that some patients who undergo surgery (and survive) experience side
effects associated are so bad Mr. Jones states that he views them as equivalent to
death! Fortunately the side effects only last for one month post surgery. If Mr. Jones
has surgery and survives, then has the post-surgical side effects followed by the
mild form of the disease, how many (undiscounted) quality-adjusted years of life
does he have remaining? (10 points)

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