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Questions:
1. What other information would you need in order to evaluate the cost effectiveness (or net monetary benefits) of H4H versus NSA?

2. List three advantages of valuing life-years in monetary terms rather than in QALY terms Treasury has approved additional dedicated funding of \$2.5million over 10 years to address the problem of chronic homelessness. This funding is intended to provide services to 1000 clients in local government areas with a significant concentration of chronically homeless persons. Which of the available programmes should this additional funding be spent on?

To calculate the Quality Adjusted Life Years, the following Formula was used:

QALY = Life Years X Utility Weight of Health State X Total Number of Sample Weight

Since, the study participants were transitioning after 3 months, the baseline QALY is calculated at 3 months Life Years or 0.25. The participants transitioned into stable shelters for 6 months. Hence, the QALY is calculated at 0.5 Life Years. The 12 month QALY is again calculated at 0.25 Life years since the participants may move out after the end of study period.

Table 1 Quality Adjusted Life Years

 AOD dependent AOD problems No AOD problems Dead Total QALY H4H: baseline 16.25 12.58 12.1125 0 40.9425 H4H: 6 month 27.3 23.68 34.425 0 85.405 H4H: 12 month 14.69 11.47 15.725 0 41.885 NSA: baseline 16.25 12.58 12.1125 0 40.9425 NSA: 6 month 33.8 22.94 24.65 0 81.39 NSA: 12 month 16.38 11.285 12.9625 0 40.6275
Monetary and Non Monetary Benefits

Non Monetary Benefits include an improvement in QALY

Table 2 :QALY for Group A (AOD Dependent)

 QALY From A QALYFrom B QALYFrom C QALY From D Total QALY H4H: baseline 16.25 0 0 0 0 H4H: 6 month 27.3 0 0 0 27.3 H4H: 12 month 13.65 0.37 1.275 1 16.295 NSA: baseline 16.25 0 0 0 16.25 NSA: 6 month 32.5 1.85 0 0 34.35 NSA: 12 month 16.38 0 0 3 19.38

Table 3 QALY for Group A (AOD Problems)

 QALY From A QALYFrom B QALYFrom C QALY From D Total QALY H4H: baseline 0 12.58 0 0 0 H4H: 6 month 0 23.68 0 0 23.68 H4H: 12 month 0 11.47 0 0 11.47 NSA: baseline 0 11.47 0 0 11.47 NSA: 6 month 0 1.85 0 0 1.85 NSA: 12 month 0 11.4375 0 3 14.4375

Table4 QALY for Group A (No AOD Problems)

 QALY From A QALYFrom B QALYFrom C QALY From D Total QALY H4H: baseline 0 0 12.1125 0 0 H4H: 6 month 5.2 1.48 24.225 0 30.905 H4H: 12 month 0 0 15.725 0 15.725 NSA: baseline 0 0 12.1125 0 12.1125 NSA: 6 month 0 0.37 24.225 0 24.595 NSA: 12 month 0.13 0.1875 12.325 3 15.6425
Non Monetary Benefits

Below is the calculation of Monetary Benefit using the Willingness to Pay Given. The Willingness To Paywas multiplied by the number of participants and the life years. Life Years were calculation at 0.25 for Baseline to 6 months, 0.5 years for the month group and 0.25 years for the 12 month evaluation group. The Willingness to Pay(WTP) reflects the Utility to participants in monetary terms. Appropriate WTP is taken for the given calculations. For participants who stay in the same state, the WTP is taken to be the WTP that would be applicable while moving from a worse condition to a better.

Table 4: Monetary Benefits For Group A

 AOD Dependent (A) Intervention From A From B From C Dead Total Benefit (in \$) H4H: baseline 0 0 0 0 0 H4H: 6 month 0 0 0 0 0 H4H: 12 month 0 -3050 -46800 0 -49850 NSA: baseline 0 0 0 0 0 NSA: 6 month 0 -30500 0 0 -30500 NSA: 12 month 0 0 0 0 0

 AOD Problems (B) Intervention From A ( From B From C Dead Total Benefit (in \$)

Table 5 Monetary Benefits For Group B

 AOD Problems (B) Intervention From A From B From C Dead Total Benefit (in \$) H4H: baseline 0 195200 0 0 195200 H4H: 6 month 0 3904000 0 0 3904000 H4H: 12 month 0 189100 0 0 189100 NSA: baseline 0 207400 0 0 207400 NSA: 6 month 0 378200 0 0 378200 NSA: 12 month 0 186050 0 0 186050

Table 6 Monetary Benefits For Group B

 No AOD problems  (Group c) ntervention From A From B From C Dead Total Benefit (in \$) H4H: baseline 0 0 270750 0 270750 H4H: 6 month 312000 38000 541500 0 891500 H4H: 12 month 0 0 351500 0 351500 NSA: baseline 0 0 270750 0 270750 NSA: 6 month 9500 541500 0 551000 NSA: 12 month 7800 4750 275500 0 288050

Table 7 Net Monetary Benefit Lost due to Death

 Dead ()D Intervention From A From B From C Total Benefit (in \$) H4H: baseline 0 0 0 0 H4H: 6 month 0 0 0 0 H4H: 12 month -24,500 0 0 -24500 NSA: baseline 0 0 0 0 NSA: 6 month 0 0 0 0 NSA: 12 month -73500 0 0 -73500

Table 8 Monetary Benefit for Unstable Housing Residents

 Unstable Housing Intervention Unstable (D) Supported (E) Independent (F) Dead Total Monetary Benefit H4H: baseline 0 0 0 0 0 H4H: 6 month 0 0 0 0 H4H: 12 month 0 -26100 0 0 -26100 NSA: baseline 0 0 0 0 0 NSA: 6 month 0 0 0 0 0 NSA: 12 month 0 -2900 -10200 0 -13100

Table 9 Monetary Benefit For Participants in Supported Housing

 Supported (E) Intervention Unstable (D) Supported (E) Independent (F) Dead Total Monetary Benefit H4H: baseline 0 0 0 0 0 H4H: 6 month 0 1015000 0 0 1015000 H4H: 12 month 0 466900 0 0 466900 NSA: baseline 0 0 0 0 0 NSA: 6 month 0 678600 0 0 678600 NSA: 12 month 0 333500 0 0 333500

Table 10 Monetary Benefit For Participants in Independent Housing

 Independent (F) Intervention Unstable (D) Supported (E) Independent (F) Dead H4H: baseline 0 0 0 0 H4H: 6 month 0 0 78000 0 H4H: 12 month 9750 39000 0 NSA: baseline 0 0 0 0 NSA: 6 month 0 0 58500 0 NSA: 12 month 0 0 25350 0

The following information would be helpful to understand

• If there are any personal costs to the patient during the process and the dollar value of those costs
• If there are any additional costs to the healthcare system  and the dollar value of those costs.

Valuation in monetary terms has three advantages

• It is a tangible , quantitative measure instead of an abstract , qualitative measure
• The quantitative aspect the costs to the health system and therefore , is better for the formulation of policies and budgeting.
Discounting

In order to calculate the Present Value, the Net Present Value function was used in Excel. The NPV function was used because the cash flows are irregular i.e the investment amount differs for every period.

Table 11 PResent Value of Investment at 5% Discount Rate

 H4H NSA \$0.91 \$0.81

Table 12 Present Values at 10% (in Million \$)

 H4H Value NSA \$0.47 \$0.41

Arguments for Discounting Costs (Frederick, 1999)

• Discounting Costs helps factor in the time value of money, and hence, is a more efficient way of calculating the true costs/benefits of an investment.
• An public investment is made from scarce public resources and , it is really important to make decisions regarding whether  the future benefits are truly preferable to present consumption.
• Discounting, also, helps understand whether the given investment will provide the desired rate of interest. For example, if a policy states a public good must have at least 10 % of expected returns for approval. Discounting will help understand whether thiscriteria would be fulfilled.
Markov Models
1. Absorbing States
• Unrelated death
• Related death
1. Non Absorbing States:
• AOD Dependent
• AOD Problems
• No AOD Problems
Hidden Values

The uncalculated values are calculated as (1- (Sum of all other probabilities of Transition given)

 A 1 B 0.96 C 0.83 D 0.95

The following variables must be identified

• Index of Monetary Costs of all interventions
• Index of the Monetary Benefit From Every
• Utility of intervention for group
Decision Rules

Table 13 Incremental costs and QALYs per 100 patients over 10 years versus NSA, ordered by increasing benefit

Intervention

 (BT - B0) in QALYs

 (CT - C0) in \$000s

(BT - BN)

(CT -CN)

(CT - CN) / (BT - BN)

Supported accom (SA)

18

350

4

120

30

SA plus integrated GP

22

230

0

30

0

SA plus brief AOD Rx

22

200

2.5

-80

-32

SA plus integrated MHS

24.5

280

0.5

85

170

SA plus brief AOD Rx plus pre-employment counselling

25

195

2

-45

-22.5

SA plus integrated MHS plus job readiness training

27

240

2

-20

-10

SA plus integrated MHS plus job readiness training & supported employment

29

260

0

260

0

Table 14 Incremental costs and QALYs per 100 patients over 10 years versus NSA, ordered by increasing cost

 Intervention (BT - B0) in QALYs (CT - C0) in \$000s (BT - BN) (CT - CN) (CT - CN) / (BT - BN) SA plus brief AOD Rx plus pre-employment counselling 25 195 170 5 0.0294117647058824 SA plus brief AOD Rx 22 200 178 30 0.168539325842697 SA plus integrated GP 22 230 208 10 0.0480769230769231 SA plus integrated MHS plus job readiness training 27 240 213 20 0.0938967136150235 SA plus integrated MHS plus job readiness training & supported employment 29 260 231 20 0.0865800865800866 SA plus integrated MHS 24.5 280 255.5 70 0.273972602739726 Supported accom (SA) 18 350 332 -350 -1.05421686746988

A intervention that is both

• higher is terms of ‘Net Benefits provided’
• Has Lower Costs

Is the dominating intervention and dominated other interventions. (Miller & Cantor, 2013)

Extended Dominance implies a situation of weak dominance by a strategy. The weak dominance could be due to lower benefits or higher costs as compared to the next best alternative.(Miller & Cantor, 2013)

1)The first two strategies in table 8 are completed dominated since the other strategies are more cost effective and have greater benefits

2) Calculations

Table 15 Calculation of Cost Benefit Strategy with the Exclusion of the non-dominant strategy

 Intervention (BT - B0) in QALYs (CT - C0) in \$000s (BT - BN) (CT - CN) (CT - CN) / (BT - BN) SA plus brief AOD Rx 22 200 2.5 -80 -32 SA plus integrated MHS 24.5 280 0.5 85 170 SA plus brief AOD Rx plus pre-employment counselling 25 195 2 -45 -22.5 SA plus integrated MHS plus job readiness training 27 240 2 -20 -10 SA plus integrated MHS plus job readiness training & supported employment 29 260 -29 260 0

3) The extendedly dominant strategies are

 · SA plus brief AOD Rx · SA plus integrated GP

Table 16 Incremental Costs/ Benefits after Extended Domination

 Intervention (BT - B0) in QALYs (CT - C0) in \$000s (BT - BN) (CT - CN) (CT - CN) / (BT - BN) Supported accom (SA) 18 350 4 70 17.5 SA plus integrated MHS 24.5 280 0.5 20 170 SA plus integrated MHS plus job readiness training & supported employment 29 260 0 0 0
Intervention Decision

In the analysis above, it is seen that

• Supported accom (SA) , SA plus integrated GP , SA plus integrated MHS do not have very high benefits and are very expensive.
• SA plus brief AOD Rx plus pre-employment counseling is very cost effective and has average net benefits.
• SA plus integrated MHS plus job readiness training, SA plus integrated MHS plus job readiness training & supported employment have high benefits but also very high costs.

Hence, SA plus brief AOD Rx plus pre-employment counseling should be the preferred project since it will allow the state to reach out to more people while retaining quality of care.

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