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You Get What You Pay For?

March 10, 2006

By Paul Howard

PRINTER FRIENDLY

Last week, actuaries at the Centers for Medicare and Medicaid Services estimated that U.S. health care costs will rise to 20 percent of GDP by 2015. Their estimate generated a predictable outcry of media angst that U.S. health care costs will swamp the economy.

Critics who focus only on spending forget what all that money is buying: better health care. American spending has paid tremendous dividends in three categories: cancer, heart disease, and infant mortality.

When Richard Nixon declared a "war on cancer" in 1971, patients viewed cancer as an automatic death sentence. In 1996, Lance Armstrong was diagnosed with late-stage testicular cancer that had spread to his lungs and brain, and he not only survived, but thrived — winning the Tour de France seven times after his recovery. Last year, the National Cancer Institute reported that, from 1993-2002, mortality rates from all cancers combined fell by 1.1 percent per year. Mortality rates also fell for 12 of the top 15 cancers in men, and nine of the top 15 cancers in women.

Cancer treatment in the U.S. is the world's gold standard because new cancer drugs are reimbursed generously, giving companies a powerful incentive to market new medicines. In Europe, on the other hand, cancer patients often have to fight to get access to new drugs. A recent report by the Karolinska Institute on disparities in European cancer care found that many "[p]atients have to wait too long to obtain the benefits of newer therapies and the biggest hurdle to the uptake of new drugs is the proactive allocation of financial resources and budgets in the health care systems by policy and decision makers." The bottom line is that Europe, in general, spends too little on innovative cancer treatments and patients suffer as a result.

When President Clinton received quadruple heart bypass surgery in September 2004, he was just another statistic — one of the millions of Americans whose lives have been saved by advances in the treatment and prevention of heart disease. Except for one year (a blip in 1993), mortality from heart disease has fallen every year since 1980, and declined by 2.8 percent from 2001-2002 alone.

New medical technologies deserve credit for revolutionizing patient care and slashing death-rates for patients like President Clinton. Fifty years ago, physicians had few strategies for managing heart disease. Today they have stents and angioplasty to open clogged arteries; beta-blockers and diuretics to lower blood pressure; and statins and aspirin to prevent heart attacks. David Cutler, an economist at Harvard University, has estimated that today the average 45-year-old can look forward to about three extra years of life thanks to improvements in heart disease treatment. He also estimates that for every dollar the U.S. spends on treatment, we get about $4 in added value.

One statistic that critics of U.S. health care love to tout is the U.S.'s infant mortality rate compared to Europe — or better yet, Cuba. Last year Nicholas Kristof of the New York Times wrote that "If the U.S. had an infant mortality rate as good as Cuba's, we would save an additional 2,212 American babies a year."[1] Kristof is trying to score cheap points — but this is an isolated statistic that ignores a complex reality.

Take Navy Anderson, and her twin brother Jackson, who were born more than four months premature. Jackson died within a few hours, but Navy spent 116 days in 4 neonatal intensive care units and survived. In 2005, Navy, a happy, healthy seven-year-old, was named the March of Dimes National Ambassador. According to the March of Dimes, some 500,000 U.S. children are born premature every year. These children face enormous risks, but U.S. hospitals and physicians do their best to give each one a fighting chance at a healthy future.

According to the CDC, over the past century U.S. infant mortality rates have fallen by 90 percent. In fact, infant mortality rates have been either flat or declining since 1958. In 1940, infant mortality in the U.S. averaged over 40 deaths per 1,000 live births. In 2002, there were just seven.[2] Incubators, steroids, neonatal surgery, and, above all, a willingness to spend money mean that many low-birth weight, pre-term infants who aren't even counted as live births in other countries survive here. But even with heroic efforts, many pre-term infants do not survive. Ultimately, our efforts to save these at-risk babies lower our overall infant mortality statistics without painting a true picture of U.S. health care.

None of this means that every dollar that goes to health care is well spent. Study after study shows, for instance, that Medicare spending varies widely by state, but that increased spending isn't correlated with better health outcomes for seniors. So the question isn't what we're spending, but what we're getting for our money. At the end of the day, no one worries about consumer spending on computers or cars, because markets drive consumers to ration consumption of those products, and producers respond by offering better products at cheaper prices. Consumer-driven health care can help spur similar efficiencies, if it's given a chance. Let's hope that by 2015 we're bragging about U.S. health care spending, rather than worrying about it.

Original Source: http://www.tcsdaily.com/article.aspx?id=031006G

 

 
 
 

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