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Institute of Health Management and Health Economics
Faculty of Medicine
University of Oslo
Institute of Health Management and Health Economics
University of Oslo
Written Exam, Friday 28 March 0900-1300
HMM4301-Optimal allocation of health care resources and
economic evaluation of health care technologies
(Economic Evaluation for short)
Results will be posted on the board at the Institute of Health Management and
Health Economics, Forskningsveien 3A. The results will also be posted on
The receiving day of the results is the day the results are posted on the board
outside the Institute. Appeals must be submitted within three weeks of this date.
The Written Exam consists of 2 pages including this one.
Remember to write down your candidate number so that you have it when the
results are made available.
Dictionary and Calculator can be used.
In the country Faraway, the hypothetical liver disease hepatosclerosis shortens life expectancy
by 10 years in young people who are infected. The disease can be cured with a drug
(Sclerokill®) that is without side effects, but the drug is only effective in young individuals
when the disease is asymptomatic. The drug is expensive, and can therefore not be used by
everybody in Faraway. A test (Hepafind®), however, can be used to detect asymptomatic
The sensitivity of Hepafind® is 95% and the specificity is 80%. The prevalence of
hepatosclerosis is 1%. The cost of Sclerokill® is $5000 per patient treated.
Health authorities have two strategy choices:
 Do nothing
 Test and treat: Use the Hepafind® test and treat those with positive test with
A. Develop a decision tree model and calculate the cost per life year gained by the test
and treat strategy. In Faraway, the Ministry of Health and Finance has decided that
discounting should not be undertaken in economic evaluation.
B. In Faraway, the Ministry of Health and Finance has decided that the value of a life
year is at maximum $12000. Should the health authorities adopt the test and treat
C. How would discounting influence the result of the analysis and the policy implications
(you need not do any calculations)?
State all assumptions you use in your analysis
Identification, quantification and valuation are three main components when we discuss costs
in economic evaluation. Describe the different components.
Discuss the difference between an economic evaluation from a health care sector perspective
and from a societal perspective
The bootstrap method can be used in sensitivity analysis
According to Drummond et al., when is it relevant to use the bootstrap method?
Describe the method.
4 ETHICS (25%)
Explain the health frontier, and which points on the frontier that correspond with: 1)
egalitarianism: 2) utilitarianism (as health maximization), and; 3) a typical health related
social welfare function involving trade-off between equality and health maximization.