title: The impact of therapeutic procedure innovation on hospital patient longevity: evidence from Western Australia, 2000-2007.
abstract: Assessing the benefits of medical innovation--its impact on health outcomes--is as important as assessing the costs-its impact on health expenditure. Most formal studies have focused on the expenditure impacts of medical technology, partly because costs are more easily identified and quantified than are benefits. Moreover, most quantitative research relating to the impact of broad categories of technology on health outcomes has focused on pharmaceuticals. This is the first study that investigates the benefits and costs of another broad category of medical innovation--inpatient therapeutic procedure innovation-using data on over one million hospital discharges. We investigate the effect of therapeutic procedure innovation in general on the longevity of Western Australia (WA) hospital patients with a variety of medical conditions. We can measure survival for a period as long as 8 years after admission. We know the date each procedure was added to the Medicare Benefits Schedule (MBS). First, we perform an analysis using cross-sectional patient-level data, controlling for the patient's age, sex, Diagnosis Related Group (DRG, over 600 categories), Aboriginal status, marital status, insurance coverage (whether or not the patient had private insurance), postcode (over 400 postcodes), year of hospital admission, and number of procedures performed. The estimates indicate that therapeutic procedure innovation increased the life expectancy of WA hospital patients (whose mean life expectancy was about 10 years) by almost 3 months between 2000 and 2007. Estimates based on longitudinal DRG-level data also indicate that therapeutic procedure innovation increased the life expectancy of WA hospital patients, but the implied increase may be smaller-about 2 months. In either case, therapeutic procedure innovation in WA hospitals appears to have been remarkably cost-effective, because it increased the cost of medical procedures by a negligible amount.
authors.affiliation: Columbia University, National Bureau of Economic Research, 504 Uris Hall, 3022 Broadway, New York, NY 10027, USA. FRL1@columbia.edu
authors.forename: Frank R
authors.initials: FR
authors.lastname: Lichtenberg
mesh_terms: D000368:Aged; D003362:Cost-Benefit Analysis; D003430:Cross-Sectional Studies; D036262:Empirical Research; D005260:Female; D006760:Hospitalization / Q000639:trends*; D006801:Humans; D008136:Longevity; D008297:Male; D008875:Middle Aged; D017059:Models, Econometric; D016019:Survival Analysis; D035703:Therapies, Investigational / Q000191:economics; D016896:Treatment Outcome; D014904:Western Australia