Health economic: economic Assessment
1) Developing a Markov Model
In this exercise you are asked to develop a simple Markov model to predict the outcomes over a five-year timeframe with a fictitious disease. The disease is asymptomatic in its mild form and therefore patients with the disease are diagnosed in the moderate stage of the illness. The disease is progressive in nature, meaning the severity of disease worsens over time. Each year 5% of patients with moderate disease progress to severe disease, and 5% of patients with moderate disease die. Once patients advance to the severe stage, 50% of patients each year die of the disease.
a) Based on the description above, develop a Markov schematic to represent the possible transitions of patients with this disease. Ensure you clearly identify the states within the model and all possible transitions.
b) Using spreadsheet software (e.g. MS Excel) design a transition matrix for all the possible transitions within the model.
c) Develop a Markov model which reflects the transitions of a cohort of 10,000 individuals with moderate disease over a 5-year timeframe. At the end of 5 years, how many patients have moderate disease, severe disease, or have died?
d) Plot the Markov trace for this model.
2) Imagine a clinical trial has been conducted to evaluate the cost-utility of a screening programme for colorectal cancer compared to no systematic screening for men aged 60.
Formal screening involved a one-off screen with the aim of detecting malignancy earlier than otherwise, and follow-up of men (3 yearly) identified with high-risk polyps, indicative of eventual malignancy.
After 8-years follow-up, the mean Quality Adjusted Life-Years (QALYs) observed in the screening arm was 5.75 QALYs per patient and in the no screening arm was 5.70 QALYs per patient. The cost per patient (screening, follow-up costs, and colorectal cancer treatment) was estimated as £900 in the screening arm and £500 in the no formal screening arm. After 8 years of follow-up, the average number of Quality-Adjusted Life-Years (QALYs) for each patient in the screening arm was 5.75, while the average number of QALYs for each patient in the no screening arm was 5.70. Costs for screening, follow-up care, and treatment for colorectal cancer were estimated to be £900 per patient in the screening arm and £500 per patient in the no formal screening arm.
A) Compute the estimated incremental cost-effectiveness ratio (ICER) and represent the results on the cost-effectiveness plane.
B) Is the screening programme cost-effective?
