Economic statistics

You are asked to give recommendations regarding the reimbursement of a new treatment for individuals suffering from diabetes. We consider here is a non-specific disease model that would suit for chronic conditions such as rheumatoid arthritis, cardiovascular disease and diabetes. The Markov diagram is presented below Disease description: ·      Patients with diabetes at the beginning of their disease do not need specific treatment. They are in the Markov health state M1“Chronic silent disease” ·      Their health state may deteriorate which would require for these patients starting to take medications for their diabetes. In this case, they enter the health state M2 ”Chronic active disease”. Treatments aims at limiting glycemic events, which can subsequently limit the occurrence of complications. ·      Over time, diabetes can lead to complications that would require specific care. Patients enter M3 “Complications” ·      Eventually, individuals can die every year because of their diabetes or for another reason. They would in this case enter the Markov state M4 “Dead”. You have to provide recommendations about a new treatment from the results of a CEA based on the following methodological choices: ·      Time horizon: 40 years ·      Length of cycle: a year ·      Discount rate: 4% ·      Effectiveness unit: QALY ·      Compared strategy: o   Routine treatment o   Innovative treatment Transition Matrix “Strategy with the routine treatment” M1 M2 M3 M4 M1 0.75 0.22 0.02 0.01 M2 0 0.7 0.28 0.02 M3 0 0 0.8 0.2 M4 0 0 0 1 Transition Matrix “Strategy with the innovative treatment” M1 M2 M3 M4 M1 0.75 0.22 0.02 0.01 M2 0.1 0.68 0.2 0.02 M3 0 0 0.8 0.2 M4 0 0 0 1 1)   Comment the difference between these two transition matrices. Why can we expect better health for patients taking the new treatment ? 2)   Compute Markov trace describing the evolution of the 10,000-individual cohort until the end of the time horizon for each strategy. Every individual is in M1 at the beginning of the simulation 3)   Draw a figure describing the evolution of the cohort for each strategy. Comment and compare them. 4)   You have below costs and QALY generated in health states for both strategies ·      Strategy with the routine treatment: M1 M2 M3 Costs 0 7,500 15,000 QALY 0.9 0.5 0.2 ·      Strategy with the innovative treatment: M1 M2 M3 Costs 0 15 000 15,000 QALY 0.9 0.5 0.2 a.     Comments the dilemma decision-makers for health care resources have to handle from these tables and from the figures drawn for question 3. b.     Compute total discounted costs and effectiveness for the two considered strategies 5)   What strategy would you recommend using the ICER criterion? 6)   Plot the cost-effectiveness frontier. Comment. 7)   Draw the INB line of each strategy according to the WTP per QALY. Comment. 8)   What strategy would you recommend using the INB criterion? 9)   Deterministic sensitivity analysis a.     Make the following deterministic sensitivity analyses. b.     Then present them with a tornado diagram and comment it Parameters Base case Lower value Upper value Discount rate 4% 3% 5% Annual cost of the innovative treatment 15,000 € -20% 20% Annual cost of complications 15,000 € -20% 20% Probability to go from M2 to M1 with the innovative treatment[1] 0.1 0.05 0.15 [1] The change in this probability will only affect the probability to remain in health state M2