U.S. health care system offers good value in terms of life expectancy gains despite rising costs

U.S. residents have benefited from increases in health care costs since 1960 through increased life expectancy, according to a study published on Thursday in the New England Journal of Medicine, the AP/Seattle Post-Intelligencer reports.

For the study, Harvard University health economist David Cutler and colleagues calculated average changes in health care costs and life expectancy for various age groups in each decade since 1960 (Donn, AP/Seattle Post-Intelligencer, 8/31).

Researchers obtained the information on health care costs from federal surveys and the information on life expectancy from CDC.

The study finds that U.S. residents born in 1960 have an average life expectancy of 70 years, compared with 77 years for those born in 2000.

The study attributes about 3.5 of the years of increased life expectancy to improvements in health care (Pagan Westphal, Wall Street Journal, 8/31).

Improved treatments for heart attack and other cardiovascular disease accounted for 70% of the increased life expectancy, and improved care for newborns accounted for 19%, the study finds (Bowman, Scripps Howard/Arkansas Democrat-Gazette, 8/31).

According to the study, after adjustment for inflation, each year of increased life expectancy cost about $19,900.

The cost of each year of increased life expectancy increased from $7,400 in the 1970s to $36,300 in the 1990s, the study finds (Pagan Westphal, Wall Street Journal, 8/31).

"The increased spending has, on average, been worth it," the study states.

Comments

Cutler said, "The rising cost of health care has been the source of a lot of saber rattling in the media and the public square, without anyone seriously analyzing the benefits gained.

But the dramatic increase in life expectancy that we've seen over the last decades shows that rising medical costs have been largely justified" (Scripps Howard/Arkansas Democrat-Gazette, 8/31).

Cutler added, "On net, it's actually been a very good deal.

It's very clear that we don't need to spend every penny we do spend. What's also clear is that there's a lot of stuff that is worth it" (Lee, Washington Post, 8/31).

Study co-author Sandeep Vijan of the University of Michigan said that the increases in health care costs from 1960 to 2000 provided "reasonably good value" (Wall Street Journal, 8/31).

Seniors Benefit Less

The study finds that "people 65 and older have seen their longevity increase by just 3.5 years since 1960," and, "since 1980, costs have risen more rapidly than the value of added life expectancy for the elderly," Scripps Howard/Democrat-Gazette reports.

Between 1960 and 2000, each year of increased life expectancy cost for seniors cost about $84,700, compared with $13,300 for newborns, $31,600 for 15-year-olds and $53,700 for 45-year-olds, the study finds.

According to the study, the cost of each year of increased life expectancy for seniors increased from about $121,000 between 1980 and 1990 to about $145,000 between 1990 and 2000 (Scripps Howard/Arkansas Democrat-Gazette, 8/31).

Cutler said, "The foremost cause of concern posed by rising medical costs is the tremendous strain coming from increased costs for the elderly," adding, "The cost per year of life for seniors is three times higher today than it was in the 1970s" (AP/Seattle Post-Intelligencer, 8/31).

Reaction

Critics said that the U.S. spends more on health care than all other nations but ranks 31st in life expectancy and 40th in childhood survival until age five.

Gerard Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins University Bloomberg School of Public Health, said that the U.S. "is very bad in value for dollar, in terms of the health care dollar," adding that the "reason why we're spending so much ... is we're paying much higher prices for the same services that other countries get."

Joseph Newhouse, a professor of health policy and medicine at Harvard, said that the U.S. could have benefited from increases in health care costs and also have overspent for services.

Newhouse said, "It's hard for people to get their minds around both of those concepts at the same time.

The natural instinct is to say, 'Don't talk to me about paying more until you can get rid of the waste and bad stuff'" (Washington Post, 8/31).

Sidney Wolfe, director of the Health Research Group at Public Citizen, said, "The fact that someone is writing this paper shows how desperate the health care system is to justify these out-of-control increases in health spending."

However, Kathleen Stoll, head of health policy at Families USA, said, "Each increment of gain is more expensive now but certainly very valuable to the person involved and their family" (AP/Seattle Post-Intelligencer, 8/31).

Richard Suzman -- director of behavioral and social research at the National Institute on Aging, which funded the study -- said, "The growing numbers of older Americans is a story that we can be proud of.

If the study had been able to factor in the improved functioning and quality of life of older people, the value of such medical spending would have looked even better" (Scripps Howard/Arkansas Democrat-Gazette, 8/31)

The study is available online.