CALCULATING LIFE EXPECTANCY
SO FAR, you've learned how to work with costs and how to enter them into a decision analysis model. You now know that the probabilistically weighted cost of each competing alternative is called the expected value of that strategy. Costs, though, are just one component of the expected value. The expected value of QALYs—the quality and quantity of life among people receiving each strategy—is the most important component of a cost-effectiveness analysis.
In this chapter, we first take a quick look at how to calculate changes in years gained when an intervention is administered using a hand calculator or spreadsheet program. Then we see how this is done using a Markov model. In the next chapter, you ...