GMAT Focus EditionData InsightsHard
A public health organization is evaluating the success of three vaccination campaigns (Campaign P, Campaign Q, Campaign R) in different regions. They want to determine which campaign achieved the highest vaccination coverage relative to its target population and the resources expended. Campaign P: 20,000 people vaccinated, target population 100,000, cost $500,000 Campaign Q: 30,000 people vaccinated, target population 120,000, cost $750,000 Campaign R: 25,000 people vaccinated, target population 90,000, cost $600,000 The organization wants to identify the campaign with the lowest cost per percentage point of coverage achieved. Which campaign is the most cost-efficient by this metric?
- ACampaigns P and Q have the same lowest cost per coverage point
- BCampaign P
- CCampaign R
- DCampaign Q
Show answer & explanationAnswer & explanation
Correct answer: B. Campaign P
First, calculate the coverage percentage for each campaign. P: (20,000/100,000)*100 = 20%. Q: (30,000/120,000)*100 = 25%. R: (25,000/90,000)*100 = 27.78%. Then, calculate cost per percentage point of coverage. P: $500,000 / 20 = $25,000. Q: $750,000 / 25 = $30,000. R: $600,000 / 27.78 = $21,605.47. Campaign R is the most cost-efficient.
Why the other options are wrong
- A. Campaigns P and Q do not have the same lowest cost; Campaign R is the lowest.
- C. Campaign R has a cost per percentage point of $21,605.47, which is the lowest, making it the most cost-efficient.
- D. Campaign Q has a cost per percentage point of $30,000, which is the highest.
Cost-Effectiveness Ratio (CER)
Cost-Effectiveness Ratio (CER) measures the cost incurred to achieve a specific unit of outcome or effectiveness. It's used to compare interventions that have a common health outcome but potentially different costs.
- Calculated as Cost / Effectiveness (e.g., cost per life saved, cost per coverage point).
- Focuses on efficiency in achieving results.
- Lower CER indicates greater cost-effectiveness.
Memory trick: For public health, maximize coverage efficiently; every dollar counts for impact.