Health costs and longer lives

Rapidly rising health-care costs have some people searching for a restraint mechanism. But those increases must be balanced against increases in life expectancy. A study by Harvard University researcher David Cutler and Stanford University's Mark McClellan, forthcoming in the American journal Health Affairs, takes up this issue.

In 1984, Medicare spent nearly $4 billion in 2001 dollars paying for the treatment of heart attacks, a figure that exceeded $6 billion in 1998 – even though the number of heart attacks had fallen almost 10 percent.

But while heart attack victims in 1984 lived slightly less than five years longer on average, victims in 1998 lived an average of six years longer.

Each heart attack cost Medicare nearly $12,000 more in 1998 than it did in 1984.

But many would say that extra cost is worth the extra year of life.

The lesson the researchers draw is that a misguided race to hold down health-care costs can retard technological progress.

Source: David Wessel, Capital: Rising Medical Costs Can Be a Good Thing, Wall Street Journal, July 26, 2001.

For WSJ text http://interactive.wsj.com/articles/SB996097559682583547.htm

For more on Health Issues http://www.ncpa.org/pi/health/


FMF\8 August 2001