The Value of Medical Spending

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  • 09/01/2006

David Cutler, Harvard University health care economist extraordinaire, was lead author of study look at the value of medical care. After estimating that half of gains in life expectancy are attributable to medical care (the rest due to lifestyle changes and fewer murders, accidents) Cutler and company found:

:…although medical spending has increased substantially during the past 40 years, the money spent has provided good value. However, temporal trends suggest that the value of health care spending is decreasing over time, particularly for older age groups. “

Cutler adds two important qualifications: “Studies suggest that there were substantial improvements in the quality of life during this period, especially among the elderly. Thus, our estimates are likely to have understated the value of medical spending. Finally, although we excluded gains in life expectancy that were due to nonmedical interventions, we did not exclude their associated costs, owing to the difficulty of disaggregating them from the overall costs of health care. This resulted in the overstatement of cost increases and thus the understatement of the value of medical advances. ” In otherwords, medical spending is probably more valuable than reflected in the study..

Of course the Leftists countered that other countries had similar increases in life expectancy with less money. But you can make international comparisons…too much variation within the US, let alone between countries. The true comparision, comarping gains due to medical intervention only demonstrate the superiority of our system…cancer, stroke and heart by pass mortality rates…no contest…Sorry Gooz…Get your facts straight for once..

And leave it to Sid Wolfe to come up with the meanest and most pointless comment:âThe 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,â So in otherwords, every time Sid Vicious writes a paper it is an act of desperation? Here’s the difference: David Cutler is a well respected economist who has published in peer reviewed economic journals and has advised presidential candidates on health care reform ranging including Bill Bradley. And Sid Wolfe is just a hack.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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