A Health Authority (HA) is contemplating a large-scale testing program for COVID- 19 cases in the community that will co

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A Health Authority Ha Is Contemplating A Large Scale Testing Program For Covid 19 Cases In The Community That Will Co 1 (54.32 KiB) Viewed 52 times

A Health Authority (HA) is contemplating a large-scale testing program for COVID- 19 cases in the community that will cost $50 million. The benefit of such a program will depend on the level of spread of the disease in the population. In monetary terms, the HA estimates that this program can save $120 million if the spread level is high (HS), $80 million if the spread level is medium (MS) and $20 million if the spread level is low (LS). To compute the payoffs, the $50 million program cost must be subtracted from these values. If the HA decides not to go ahead with the program, the payoff is zero regardless of the spread level. The HA does not know the spread level for sure, but has assigned probabilities of 20%, 50% and 30% for the HS, MS and LS scenarios, respectively. One way to improve the estimation of the disease spread level is to implement a small-scale testing program that costs $5 million first. The small-scale test has two possible outcomes: Positive Test Result (PTR) or Negative Test Result (NTR). Historical data shows that similar small-scale programs resulted in PTR in 20%, 40% and 80% of the times when the spread levels were HS, MS and LS, respectively. 4 The HA wants to decide whether to implement the small-scale testing (SST) program, and if it does and depending on its outcome, whether to go ahead with the large- scale testing (LST) program.