Study: Americans get a good return for their health care dollar

About half of the increase in life expectancy since 1960 is due to better medical care.

By Kevin B. O’Reilly — Posted Sept. 25, 2006

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Increased life expectancy has more than made up for an eightfold increase in annual U.S. health care spending since 1960, according to an Aug. 31 New England Journal of Medicine study.

People born in 2000 are projected to live an average seven years longer than those born in 1960. Improved medical care is to thank for about half of those years, study authors estimated. When adjusting for inflation, it cost about $69,000, or $19,900 per year of life gained in 2002 dollars, for the additional 3.5 years. That's a good bargain, the study said, compared with the $100,000 value many insurers place on each extra year of life.

Most of the added life expectancy since 1960 was due to improved treatments for cardiovascular disease and lower infant mortality rates, the study found. Allison B. Rosen, MD, MPH, a study co-author and clinical director of the University of Michigan's Center for Value Based Insurance Design said she and her colleagues were aiming to show policymakers the benefits patients receive for their health care dollar.

"If you want to look at the productivity of any other industry, everything's much more easily monetized," Dr. Rosen said. "You put more money into the auto industry and you get more cars. In health care ... it's much more difficult to measure."

The study may underestimate the value of U.S. medical spending because it doesn't measure patients' improved quality of life from better medical care, the authors said. That type of comparison wasn't possible due to the lack of consistent data over the 40-year period evaluated.

AMA Board of Trustees Chair Cecil B. Wilson, MD, said in a statement that the study echoes the Association's "findings that the return on health care spending remains high."

Elliot S. Fisher, MD, MPH, said the research points to the need to understand and measure not just the cost of medical care but its value.

"The more attention we as physicians pay to that question, the better," said Dr. Fisher, a senior associate of the VA Outcomes Group at Dartmouth Medical School. "If physicians take the lead in demonstrating, rather than just claiming, our services are beneficial, then we'd be doing the public -- and those paying our bills -- a great service."

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