Cost-Effectiveness Perspectives Exercise

This exercise asks you to consider the process of cost-effectiveness analysis, in which the goal is to determine the effectiveness of medical interventions per dollar spent. You may wish to print out this page before continuing, as you will use information on it.


Wancorp Ltd. has a company medical plan that has not included coverage related to breast cancer, but Wancorp now wants to address breast cancer in its 50 year-old female employees. These employees can be expected to live to age 80 if they don't develop breast cancer. Currently, 8.22% can be expected to develop breast cancer, and 3.57% (of all employees) will die from breast cancer.

The company has done some research, and has come up with three alternatives to the current (baseline) approach of doing nothing: a screening plan, a treatment plan, and both plans:

  1. Screen women for breast cancer from age 50 to 65. This will catch some cancers earlier and reduce the proportion of employees who will die from breast cancer to 2.88%. It costs $1195 per employee to implement this plan.
  2. Provide women who develop metastatic breast cancer with high-dose chemotherapy with autologous bone marrow transplantation (HDC-ABMT) until age 65. This reduces the proportion of deaths to 3.54%, and costs $1506 per employee.
  3. Both screen and provide HDC-ABMT. This reduces deaths to 2.86% and costs $2303 per employee.
Using the on-line cost-effectiveness calculator for this decision, perform cost-effectiveness analyses from 3 perspectives, and summarize your results on the "Cost-Effectiveness" WebBoard conference:

Perspective I: Young employee

As a 35-year old female employee, you'll be asked to pay a lump sum at age 50 corresponding to the cost per employee of the treatment plan you choose. Which treatment plan would you choose and why? Would it make a difference if you knew ahead of time that you would develop breast cancer?

Perspective II: Employee with cancer

What if you're a 50-year old employee, about to pay your lump sum, and you learn that you already have breast cancer, it has metastasized, and is terminal. Which treatment plan would you choose and why? (To model this, set the probability of getting breast cancer to 100%, probability of dying with options that don't include HDC-ABMT to 100%, and probability of dying with options that do include HDC-ABMT to 43%.

Perspective III: Society

Imagine that you’re the Director of Human Resources for this company and you have a $1 million budget to spend on one of these three programs. You have 100 female employees at or under the age of 50. Which option would you choose?

How many life years would you expect to save with each of the three options? How much cheaper or more effective would HDC-ABMT have to be to change your choice?