An online coaching program has been developed for patients with borderline hypertension. A total of 100 patients are randomized to receive the coaching, and 100 patients serve as control subjects. The start-up cost of the coaching program is $2,000 for software, hardware, and office supplies. A part-time nurse is hired for the program, with a salary of $15,000 plus 20% fringe benefits. The cost per year per patient for medication is $1000. It has been shown that for the first year after beginning the program, 90% with coaching were not considered hypertensive (normal or borderline blood pressure) and 10% were prescribed medication to control their blood pressure. In the control group (no coaching), 70% were not considered hypertensive after 1 year and 30% were prescribed blood pressure medication. Patients in the coaching group continue to receive coaching even if they are prescribed medication. Assuming that these probabilities are constant for the next 4 years, and assuming a 3% discount rate, answer the following questions on the cost-benefit of the program. Begin discounting in year 2; do not discount in year 1. Completed the table of costs for the participants in the coaching program. Highlight or circle the 5-year total cost for the program, with and without discounting. Year Patients without Hypertension (n) Patients with Hypertension (n) Start-Up Cost before discounting Start-Up Cost after discounting Salary Cost before discounting Salary Cost after discounting Medication Cost before discounting Medication Cost after discounting Total Costs Before Discounting Total Costs After Discounting 1 100 0 $2,000 $2,000 $15,000 + 20% $18,000 $0 $0 $20,000 $20,000 2 90 10 $0   $15,000 + 20%   $1,000 x 10   $28,000   3 81 19 $0   $15,000 + 20%   $1,000 x 19   $37,000   4 73 27                 5 66 34                 Total

Practical Management Science
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Author:WINSTON, Wayne L.
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An online coaching program has been developed for patients with borderline hypertension. A total of 100 patients are randomized to receive the coaching, and 100 patients serve as control subjects. The start-up cost of the coaching program is $2,000 for software, hardware, and office supplies. A part-time nurse is hired for the program, with a salary of $15,000 plus 20% fringe benefits. The cost per year per patient for medication is $1000.

It has been shown that for the first year after beginning the program, 90% with coaching were not considered hypertensive (normal or borderline blood pressure) and 10% were prescribed medication to control their blood pressure. In the control group (no coaching), 70% were not considered hypertensive after 1 year and 30% were prescribed blood pressure medication. Patients in the coaching group continue to receive coaching even if they are prescribed medication.

Assuming that these probabilities are constant for the next 4 years, and assuming a 3% discount rate, answer the following questions on the cost-benefit of the program. Begin discounting in year 2; do not discount in year 1.

Completed the table of costs for the participants in the coaching program. Highlight or circle the 5-year total cost for the program, with and without discounting.

Year

Patients without Hypertension
(n)

Patients with Hypertension
(n)

Start-Up Cost before discounting

Start-Up Cost after discounting

Salary Cost before discounting

Salary Cost after discounting

Medication Cost before discounting

Medication Cost after discounting

Total Costs Before Discounting

Total Costs After Discounting

1

100

0

$2,000

$2,000

$15,000

+ 20%

$18,000

$0

$0

$20,000

$20,000

2

90

10

$0

 

$15,000

+ 20%

 

$1,000

x 10

 

$28,000

 

3

81

19

$0

 

$15,000

+ 20%

 

$1,000

x 19

 

$37,000

 

4

73

27

               

5

66

34

               

Total

                   

 

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