Imagine for a moment that you are an oncologist caring for a 53-year-old man with metastatic cancer, a person whose tumor has spread to lung and liver.
With standard chemotherapy, this man can expect to live around 12 months. That standard treatment isn’t all that expensive in today’s terms, only $25,000 and his insurance company will pick up the entire tab since he is already maxed out on his yearly deductible and co-pays.
But wait! Before prescribing the standard treatment, you find out there is a new chemotherapy on the market, one that costs $75,000 (in other words, fifty thousand dollars more than usual care) and has no more side effects than that standard treatment.
How much longer would patients like this have to live, on average, for you to feel that this new chemotherapy is warranted?
That’s not an easy question to answer. But it’s not an impossible one either. Clearly if the treatment would provide only, say, 1 day of additional survival on average, that would not amount to $50,000 well spent. Just as clearly, if this man could expect 10 years of additional life, no one would deny him this new treatment.
So when, between 1 day and 10 years, does it become a tough call whether to prescribe this new treatment?