title: The lifetime costs and benefits of medical technology.
abstract: Measuring the lifetime costs and benefits of medical technologies is essential in evaluating technological change and determining the productivity of medical care. Using data on Medicare beneficiaries with a heart attack in the late 1980s and 17 years of follow up data, I evaluate the long-term costs and benefits of revascularization after a heart attack. I account for non-random selection into treatment with instrumental variables; following McClellan, McNeil, and Newhouse, the instrument is the differential distance to a hospital capable of providing revascularization. The results show that revascularization is associated with over 1 year of additional life expectancy, at a cost of about $40,000. Revascularization, or other treatments correlated with it, appears to be highly cost-effective.
authors.affiliation: Harvard University, Department of Economics, 1875 Cambridge Street, Cambridge, MA 02138, USA. dcutler@harvard.edu
authors.forename: David M
authors.initials: DM
authors.lastname: Cutler
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D002303:Cardiac Output, Low / Q000601:surgery; D003362:Cost-Benefit Analysis / Q000706:statistics & numerical data; D005260:Female; D006801:Humans; D008017:Life Expectancy; D008297:Male; D013677:Medical Laboratory Science / Q000191:economics*; D006278:Medicare; D009204:Myocardial Revascularization / Q000191:economics / Q000401:mortality; D014481:United States / Q000453:epidemiology