TY  - JOUR
AU  - Cutler,David M.
TI  - The Lifetime Costs and Benefits of Medical Technology
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13478
PY  - 2007
Y2  - October 2007
UR  - http://www.nber.org/papers/w13478
L1  - http://www.nber.org/papers/w13478.pdf
N1  - Author contact info:
David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu
AB  - 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.
ER  -