Question

1. True, False, Uncertain

State whether each of the following statements is true, false or uncertain.  Explain and support your answer.  There is not necessarily one right answer to these questions.  All the credit is in the explanation (but you must state T, F, or U).

1. The full cost of medical school includes mainly tuition, room, and board for the school.   
2. Uncompensated care in the U.S. is entirely subsidized by government programs, namely Medicare and Medicaid.
3. In a DRG payment system, hospitals receive payment according to the number of services rendered.  
4. The approval of Vioxx, a painkiller that was taken off the market in 2004 because it was implicated in several cardiac arrests, is an example of Type I error by the Food and Drug Administration.
5. The Dartmouth-Atlas research project finds that health care spending varied widely across different American cities in the early 2000s, and that Medicare enrollees in high-spending cities were a lot healthier as a result.

Answer 1

a. Cost-effectiveness analysis is used to determine which medicines and treatments the UK National Health Service will cover.

False. National health insurance services in any nation are federal programs aimed at social welfare and not on the efficiency basis. Hence cost effective analysis is not done.

b. Cost-benefit analysis is never used to determine which medicines and treatments U.S. Medicare will cover.

True. As mentioned, Medicare, once again the federal program. Medicare is actually an insurance program where the medical bills are paid not all from out-of-pockets but from the trust funds. These trust funds are composed of funds paid by those who are covered by Medicare. Medicare does not use cost or cost-effectiveness as a criterion for determining which medicines and treatments it will cover.

c. A cost-effectiveness ratio indicates which of two treatment options is better.

False. It its the incremental cost-effectiveness ratio that allows us to investigate the marginal cost for an additional health benefit unit. This is used when we are choosing between different options or treatments

d. If a medical screening technique is perfect at detecting a disease before it develops, and is able to prevent the disease from occurring, it must be cost-effective.

Uncertain because the medical screening technique may or may not use cost effective criteria.

e. If a new medical treatment has a cost-benefit ratio of 0.95 it should definitely be adopted.

Uncertain. Besides the value of ratio being less than 1, there should be no side effects of the treatment.