# Barstow Community College Medical Knowledge & Economics Worksheet

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Note: This is a hypothetical situation, and the numbers you will be using with should not be taken as
factual.
1. PharmaCo is advertising a drug it has recently released to the market. The drug, Aionios, has been
shown to lead to a 40% reduction in the occurrence of heart attacks in men older than 50. The rate of
heart attacks in this population group and in the control group during testing) was 2% per year.
Question 1: What are the absolute risk reduction (ARR), relative risk reduction (RRR), and
number needed to treat (NNT) for the drug?
2. Aionios has occasional side effects. In 2% of those taking the drug in clinical trials, significant
hearing loss occurred. In the control group, 0.4% of those taking the placebo experienced hearing
loss.
Question 2a: What is the Absolute Risk Increase (ARI) and the Number Needed to Harm (NNH)
for the drug?
Question 2b: If we assign the same cost to the two negative outcomes (heart attack, hearing
loss), is it generally worthwhile for a man in the target demographic to take Aionios?
3. The life expectancy of a 50 year old man is approximately 30 years. Since some of the patients who
would receive Aionios are older than 50, assume a 20 year average life expectancy for this group. The
cost of the drug is \$1,000 per year, taken for the rest of the patients life. The medical costs of having
a heart attack have an expected value of \$500,000. (Assume a discount rate of 0%.)
Question 3: Looking only at the financial costs, is it worthwhile for a patient in the target group
to take Aionios?
4. Although every life has infinite value, the US government makes tradeoff decisions using an estimate
of \$10 million per life. Other actuarial valuations are based on the number of years of a persons life
that are affected, at a value of \$150,000 per year.
Question 4: If you also consider a potential benefit of 20 years of added life, at \$150,000 per
year, for those whom the drug benefits, is it worthwhile for a patient in the target group to take
Aionios? (Assume a discount rate of 0%.)
5. There is a genetic screening test that indicates whether a patient would develop hearing loss as a
result of taking Aionios. The test has 90% sensitivity (rate of true positives) and an 80% specificity
(rate of true negatives), and 1% of the general population has this genetic variant.
Question 5: If you take the test and receive a positive test result (i.e., you have the uncommon
genetic variance), what is the likelihood that you actually have the genetic trait?
Economics E-1035
Behavioral Economics and Decision Making
Implications and Applications: Health Care
Guest Speaker: Robert S Dieter MD RVT ALM
November 11, 2021
Heuristics and biases
in medicine
Robert S Dieter MD RVT ALM
Goals
 Better understanding of how behavioral
economics impacts medical decision making
 Leave with a better ability to take personal
control of health care decisions
 Keep the focus on behavioral economics
health care decisions?
System 1
Vs
System 2
Preference
function
Data analysis
System 1
Vs
System 2
Preference
function
Data analysis
Base rate and
medical testing
What is worse, a false positive or a
false negative?
 How sensitive is the test?
How many actually COVID-19 positive
people are correctly identified as positive?
 How specific is the test?
How many not-positive people does it
confirm as not having COVID-19?
 What is the false-negative rate?
How many who were positive were told that
they dont have COVID-19?
 What is the false-positive rate?
How many who do not have COVID-19 were told
they do do have COVID-19?
Common clinical question for me:
How do I approach a patient with chest pain?
How do we determine if the chest pain
is from coronary artery disease?
context.
 Does this patient fit
the profile of someone
with coronary artery
disease?
Does this patient fit the profile of
someone with coronary artery disease?
 What is the prevalence of
coronary disease in people
similar to this patient?
 Pre test probability
 or, base rate of the
condition
How do we determine if the chest
pain is from coronary artery disease?
 Aside from the pre-test
probability of coronary
artery disease, we sometimes
a stress test)
 Do the results of the stress
test help us better determine
if the chest pain was from
coronary artery disease?
If it looks a like a duck and quacks like a duck, do the results
of a duck test change whether it is a duck?
What if were not so certain? Then, maybe we
do need a duck test.
Test for a duck
How do we determine if the chest
pain is from coronary artery disease?
 Typically, a stress test is
ordered to help determine
if the chest pain is from
coronary artery disease
 Will the results of the
stress test help us better
determine if the chest
pain was from coronary
artery disease?
Pre-test probability
Based on overall
risk profile
Post-test probability
Pre-test probability
based on overall risk
profile
Stress test
Test result
Pre-test probability
Based purely on
symptoms
Post-test probability
Test result
Post test probability
Long recognized, rarely used
Bayesian analysis and base rate
sound pretty sophisticated. Is
this actually relevant today?
British Medical Journal, 2021
Rare disease + low risk = high false
(low base rate) population positive rate
Behavioral economics matters
even in 2021!
Bayesian Analysis
 Critically important in medicine, but not well understood
 Take home: context matters. The prevalence of the condition
does not change the accuracy of the test, it changes how to
interpret the results of the test (i.e., it gives us the post-test
probability).
Confusing ?
 Interpreting medical testing can be challenging
 Behavioral economics gives us a better understanding of how
to interpret test results and statistical analysis
 Now, lets talk about treatment for coronary disease and go
A closer look
at how to
interpret data
How do we discuss
event rates?
Typically, we will say
% change
But, critically think
reported!
Aspirin for coronary artery disease
 Aspirin significantly reduced the risk of serious vascular
events
 6.7% (aspirin) versus 8.2% per year, P