|Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.||
Value of Health and Longevity
Americas debate over health care is largely focused on how much we spend, and seemingly how little we get for our spending. What is largely overlooked, consequently, is how far U.S. health care has advanced in recent years, and the value that these advances provide to patients and the U.S. economy in general.
The December digest from the National Bureau of Economic Research describes a June 2005 paper from two University of Chicago economists who attempted to quantify how we should value gains from health improvements during the 20th century.
In The Value of Health and Longevity (NBER Working Paper No. 11405), authors Kevin Murphy and Robert Topel develop and apply an economic framework for valuing improvements in health and longevity, based on individuals' willingness to pay. They then use that framework to estimate the economic gains from declining mortality in the United States over the twentieth century, and to value the prospective gains that could be obtained from further progress against major diseases.
Murphy and Topel find that reductions in mortality from 1970 to 2000 had an economic value to the 2000 U.S. population of about $3.2 trillion per year. Over the longer term, the cumulative longevity gains during the twentieth century were worth about $1.3 million per person. Valued at the date they occurred, the production of longevity-related "health capital" would raise estimates of per capita output in the United States from 10 to 50 percent, depending on the time period in question. …
Prospectively, even modest progress against mortality-causing diseases, such as cancer and heart disease, would have enormous social value. A single percent reduction in mortality from cancer or heart disease would be worth nearly $500 billion to current and future Americans. These estimates ignore the value of health advances to individuals in other countries, so they likely understate the aggregate social value of possible innovations. They also ignore corresponding improvements in the quality of life - which evidence suggests may be even more valuable than gains in longevity - and for these reasons as well they are likely to be conservative. The authors show that these values will increase in the future because of economic growth and, more interestingly, because health itself continues to improve.
Topel and Murphy show that the economic value of health care innovation is truly staggering – and that even incremental advances in the treatment of cancer and heart disease promise substantial gains. The challenge facing policymakers, then, is not only to expand health care access, but to do so in a way that maintains and improves America’s capacity to produce new innovations.
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