Name: Model 2

Choose the correct answer “Highlight in Yellow” (25 marks, each one 1 mark)

1. Which of the following best describes the cost-effectiveness acceptability curve?

A. A chart of probability an intervention is cost-effective against willingness to pay
B. A chart of probability an intervention is cost-effectiveness against willingness to accept
C. A chart of probability an intervention is not cost-effective against willingness to pay
D. A table of probability an intervention is cost-effective against willingness to pay
E. A table of probability an intervention is not cost-effective against willingness to accept

2. How would you best describe the role of healthcare professionals in relation to evidence-
based interventions?
A. All healthcare professionals should work to maximise clinical value and avoid wasting resources
B. Healthcare professionals do not need to understand issues relating to cost-effectiveness or HTA
C. Healthcare professionals need not concern themselves with whether a drug is clinically effective
or cost-effective
D. Healthcare professionals should be primarily focused on patient preference rather than the most
cost-effective treatment choice
E. Healthcare professionals should have a broad understanding of issues of cost-effectiveness and
HTA to ensure the best health gains within available budgets

3. If a manufacturer shows an economic model/budget impact model to a healthcare

professional to demonstrate the costs/benefits of a change in treatment regimen, which of
the following should the healthcare professional consider most important?
A. Whether the evidence base is unbiased and relevant to the local population
B. Whether the healthcare professional is very familiar with the new intervention
C. Whether the manufacturer stands to make a large profit based on the change of practice
D. Whether the model is easy to use
E. Whether the new product is available in other places

4. In cost-utility analysis, what is the type of measurement used to quantify health benefits?
A. Quality adjusted life years
B. Quality unadjusted life-years
C. Quantity of cases which were treated
D. Quantity of deaths avoided
E. Quantity spent

5. Which of the following provides the formula used in discounting, where ‘t’ is time and ‘r’ is
the discount rate?
A. 1/(1+r)t-1
B. 1/(2+r)t-1
C. 2/(1+r)t-1
D. 2/(2+r)t-1
E. 4/(1+r)t-1

6. A pharmaceutical company uses cost-utility analysis to compare its new drug with the
currently available treatment. What is the ICER if we have the following data?

Without treatment:

Life expectancy = 5 years

Health related quality of life = 0.7

Usual care costs = £400 a year

With treatment:

Life expectancy = 5 years

Health related quality of life = 0.9

Usual care and new treatment costs = £1000 a year

A. £10 cost per QALY

B. £10,000 cost per QALY
C. £20 cost per QALY
D. £428 cost per QALY
E. £600 cost per QALY

7. Which of the following best describes when cost minimisation analysis should be
conducted?
A. When a treatment has the same impact on outcomes and different costs to a comparator
B. When a treatment has different impacts on outcomes and the same costs to a comparator
C. When a treatment has different impacts on outcomes and different costs to a comparator
D. When a treatment has the same impacts on outcomes and the same costs to a comparator
E. When a treatment has different impacts on outcomes and but no different costs to a comparator

8. Which of the following best describes the concept of dominance in cost-effectiveness

analysis?
A. When a comparator intervention is both less expensive and more effective it will dominate the
intervention
B. When a comparator intervention is more expensive and less effective it is not said to be dominant
C. When a comparator is both less expensive and less effective it will dominate the intervention
D. When an intervention has a greater ICER than a more effective intervention it is extendedly
dominated
E. When an intervention is both less expensive and offers the same effectiveness it will dominate
the intervention

9. All types of economic evaluation have advantages and disadvantages. What is the main
advantage of cost-utility analysis?
A. It measures costs
B. It measures new drugs
C. It doesn’t measure life expectancy
D. It doesn’t measure quality of life
E. It measures QALYs gained

10. A new drug has a gain of 0.5 QALYs and an annual cost of £12,000. What is the cost per
QALY?
A. £12,000
B. £24,000
C. £50,000
D. £80,000
E. £210,000
11. Cost-effectiveness analysis estimate the financial consequences of adoption and diffusion
of a new health care intervention within a specific health care setting.
A. True
B. False

12. The cost effectiveness threshold explicitly defines whether a therapy should or should not
be reimbursed.
A. True
B. False

13. Economic evaluations answer the questions related to the efficient allocation of
resources.
A. True
B. False

14. One of the hurdles in cost of illness studies is the comparator comparison to the new
intervention.
A. True
B. False

15. Cost utility analysis is applicable to compare investment decisions between health care
sector and other sectors of the economy.
A. True
B. False

16. Expensive drugs can’t be cost-effective and inexpensive drugs can be cost-effective.
A. True
B. False

17. Reimbursement decisions are entirely based on the results of economic evaluation.
A. True
B. False

18. Traveling to and from the physician’s office, clinic, or the hospital is considered direct
medical cost.
A. True
B. False

19. Average Cost-effectiveness is equal to the resources consumed per unit of output.
A. True
B. False

20. Decision analysis helps decision-makers reconcile spending with maximizing optimal
health outcomes for individuals or populations, and serves an important role in healthcare
decision-making.
A. True
B. False

21. QALY is the preference or value that an individual or society gives a particular health
state. It is generally a number between 0 (representing death) and 1 (perfect health). 
A. True
B. False

22. Cost-effectiveness analysis is a method that can be used to identify interventions that
yield the highest gain in health outcomes per dollar of health expenditure.
A. True
B. False

23. The Willingness to Pay represents the additional amount a decision-maker is willing to pay
per additional unit of effectiveness, thereby setting a limit on the ICER.
A. True
B. False

24. Marginal cost is the total average cost of one intervention.

A. True
B. False

25. Markov model time horizon captures the time frame over which transitions between health
states occurs.
A. True
B. False