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National Information Center on Health Services Research and Health Care Technology (NICHSR)

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Health Economics Information Resources: A Self-Study Course

Module 4: An Introduction to the Principles of Critical Appraisal of Health Economic Evaluation Studies

Review Questions for Module 4 Quiz

This page links to the review questions that will be used in the Module 4 quiz for you to take to test your knowledge of the content you have just been studying. It also links to the interactive quiz.

Quiz 4 (Module 4)

There are three basic types of economic evaluation methodology: (1) cost-effectiveness analysis (CEA); (2) ________; and (3) cost-benefit analysis (CBA) . What is the missing type? Select the correct answer from from the list below.

A. insurance benefits analysis
B. technical efficiency analyses
C. clinical efficiency analysis
D. allocative efficiency analysis
E. cost-utility analysis (CUA)

Explanation

There are three basic types of economic evaluation methodology: (1) cost-effectiveness analysis (CEA); (2) cost-utility analysis (CUA); and (3) cost-benefit analysis (CBA).

Cost-effectiveness analysis (CEA) is not well-suited to measuring technical efficiency as it is difficult to compare treatments with different outcomes. True | False?

Explanation

This statement is false. CEA relates costs to a single clinical or natural measure of effectiveness i.e., a unidimensional outcome; e.g., pain reduction; activities of daily living.

CEA is best suited to measuring technical efficiency as it is difficult to compare treatments with different outcomes.

Cost-effectiveness analysis (CEA) can sometimes be used to provide limited information on ______ through a ratio of extra cost to extra benefit produced (incremental cost-efficiency analysis). (Select the correct phrase from the following list).

A. insurance benefits
B. technical analyses
C. technical efficiency
D. allocative efficiency
E. peer review

Explanation

CEA can sometimes be used to provide limited information on allocative efficiency through a ratio of extra cost to extra benefit produced (incremental cost-efficiency analysis).

Cost-utility analysis relates ____ to a multidimensional measure of effectiveness which takes into account the valuation of benefits; i.e., a measure of utility.

A. costs
B. allocative efficiency
C. technical efficiency
D. economic data
E. peer review

Explanation

Cost-utility analysis relates costs to a multidimensional measure of effectiveness which takes into account the valuation of benefits; i.e., a measure of utility.

Cost Utility Analysis can be used to measure technical efficiency. True | False?

Explanation

This statement is true. CUA can be used to measure technical efficiency.

CUA is not generally used for allocative efficiency. True | False?

Explanation

CUA can be used for allocative efficiency but only within the health care sector where health care costs only are included.

Cost benefit analysis (CBA) can be used to measure technical efficiency questions only. True | False?

Explanation

CBA can be used to measure both technical and allocative efficiency questions.

Cost benefit analysis is used to measure allocative efficiency. It can be measured either within the ________ or across other sectors of the economy.

A. technical sector
B. health care sector
C. insurance sector
D. socioeconomic sector
E. information sector

Explanation

CBA is used to measure allocative efficiency. It can be measured either within the health care sector or across other sectors of the economy.

Are either or both of the following statements correct or incorrect? (Select the best answer).

A. As a general rule cost effectiveness analysis and cost utility analysis require only health care costs to be collected.

B. Cost benefit analysis requires all costs and benefits to be collected, no matter on whom they fall.

A. Statement A: yes (A is incorrect)
B. Statement A: no (A is correct)
C. Statement B: no (B is correct)
D. Statement B: yes (B is incorrect)
E. Both statement A and statement B are correct
F. Both statement A and statement B are incorrect

Explanation

In fact, both statements are correct. As a general rule CEA and CUA require only health care costs to be collected.

CBA requires all costs and benefits to be collected, no matter on whom they fall.

The four main areas of resource use which may require specific identification and measurement of costs are: health care resources; other related services; clients and their families; and ______ . (Fill in the missing area).

A. time lost from usual activity
B. randomized controlled trials
C. clinical trials
D. exercise

Explanation

The four main areas of resource use which may require specific identification and measurement of costs are: health care resources; other related services; clients and their families; and time lost from usual activity.

Examples of health care resources include (but are not limited to) staffing, consumables such as supplies and equipment, overheads such as heating, lighting, cleaning, laundry services etc., and capital such as land, buildings and major items of equipment. True | False?

Explanation

This statement is true. Health care resources include staffing, consumables, overheads and capital.

Other related services costs relate to resources associated with community, ambulance and voluntary services, As with health care resources they may be categorized as staffing, ______, overheads, and capital.

A. research
B. consumables
C. buildings
D. heating

Explanation

Other related services costs relate to resources associated with community, ambulance and voluntary services, As with health care resources they may be categorized as staffing, consumables, overheads, and capital.

Two patients have different treatments for the same condition. In Year 1 person A has surgery costing $3000. Patient B begins drug treatment with drugs costing $1000. Over three years, and despite an inflation rate of 5%, by adjusting costs for the rate of inflation the two treatments are shown to be _________ in terms of resources used.

A. much less efficient
B. not as efficient
C. more efficient
D. equally efficient
E. Much more efficient

Explanation

By adjusting costs for the rate of inflation the two treatments are shown to be equally efficient in terms of resources used.

Each treatment has the same effect but different costs. With an inflation rate of 5% a cost of $1050 occurring in one year’s time is equivalent to $1000 ($1050/1.05) now. With an inflation rate of 5% a cost of $1102.5 occurring in two year’s time is equivalent to $1000 ($1102.5/1.0522) now.

Use of unadjusted costs would lead to the conclusion that surgery is more efficient than drug therapy as it would appear less costly.

Double-counting - counting the same cost twice - is a potential hazard in economic evaluation. True | False?

Explanation

Counting the same cost twice - double-counting - is a potential hazard in economic evaluation. An example of double-counting is counting the cost of a surgeon’s time for an operation when that cost is already included in the fee.

The market value of a resource may not be an adequate reflection of opportunity cost. An example is voluntary care - the market price is zero but there is an opportunity cost in terms of the alternative ways in which the carer could have utilized the time. A value would have to be imputed, perhaps based on the salary of a paid caregiver. This concept is called _________?

A. cost efficiency
B. un-thinking acceptance of market values
C. opportunity cost
D. market price

Explanation

The last consideration is the un-thinking acceptance of market values. The market value of a resource may not be an adequate reflection of opportunity cost.

An example is voluntary care - the market price is zero but there is an opportunity cost in terms of the alternative ways in which the carer could have utilized the time. A value would have to be imputed, perhaps based on the salary of a paid caregiver.

It is difficult to assign monetary values to health care benefits. Instead, __________ allows measurement of potential benefits of health care other than just health gain. (Select the best option below to fill in the blank).

A. QALYs
B. life years gained
C. willingness to pay
D. money
E. HYEs

Explanation

Cost-benefit analysis (CBA) is the only form of evaluation that addresses whether the benefits of an intervention exceed its costs. Willingness To Pay allows measurement of potential benefits of health care other than just health gain. It is difficult to assign monetary values to health care benefits.

Any economic evaluation where costs and benefits occur over a number of years should consider ____________. (Fill in the blank with one of items from the list below).

A. discounting
B. hypothesizing
C. alternatives
D. surgery

Explanation

Individuals’ or society’s preferences for when to incur costs and receive benefits is reflected in the discount rate. Any economic evaluation where costs and benefits occur over a number of years should consider discounting.

Economic evaluations are ______ which attempt to capture and summarize reality. (Fill in the blank with one of items from the list below).

A. organisms
B. facts
C. graphics
D. models

Explanation

Economic evaluations are models which attempt to capture and summarize reality. These models use assumptions and estimates.

Sensitivity analysis tests the confidence limits of the conclusions by repeating the comparison between inputs and consequences while varying the assumptions used. True | False?

Explanation

This statement is not correct. Sensitivity analysis tests the robustness of the conclusions by repeating the comparison between inputs and consequences while varying the assumptions used. Given that there will be a degree of uncertainty about some elements of any economic evaluation, sensitivity analysis assists in judging how robust the conclusions will be.

Ready to take the quiz for module 4? When you successfully complete the quiz you can apply for the Certificate of Success for this module.

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