FOR IMMEDIATE RELEASE December 10, 1997
Contact:
Heather Kolasch
(202) 835-3466
AMERICANS ARE GETTING MORE FOR THEIR HEALTH CARE DOLLAR
Study Reveals Innovative Health Care is Saving Lives and Money
Washington, D.C. -- Innovative new treatments are reducing the cost of treating specific illnesses while saving more lives and improving the quality of life for patients, according to new research by economists and physicians.
The four-part study by the National Bureau of Economic Research (NBER) -- entitled Measuring the Prices of Medical Treatments -- looks at health care costs in a non-traditional way, taking into consideration the value of medical innovations in reducing overall treatment costs and in helping people lead longer, healthier, happier, more productive lives.
Ernst R. Berndt, Professor of Applied Economics at the Massachusetts Institute of Technology and a co-author of one study, said he hoped the findings would provide a sounder basis for future health policy decisions by factoring value into the calculation of health care costs.
"Existing health policy decisions are made using flawed economic statistics," he said. "By valuing the innovations in medical care, this research gives us a more precise way of evaluating health care spending."
The researchers focused on the treatment of three diseases -- heart attacks, depression, and bacterial infectious disease -- with particular attention to the role played by innovative pharmaceuticals, new medical procedures and managed care techniques. A common finding is that outcomes were improving while the cost per individual treatment was either going down or remaining stable.
For example, the researchers found that while total spending for heart disease has increased over the last half century, the cost of individual heart attack treatments has declined or remained steady while the outcomes of those treatments have greatly improved -- the average life expectancy for heart attack patients increased 13% over a seven-year period.
From 1991 to 1995 the cost of treating an episode of acute depression declined about 25% in the United States. Also, researchers found that the price of one commonly used drug to combat infectious disease grew only .76% per year from 1988 through 1996 compared to the government figure of 4.54% per year.
"There's an old saying that a cynic is someone who knows the cost of everything and the value of nothing," said PhRMA President Alan F. Holmer in releasing the study. "This groundbreaking research -- by focusing on what we get for our health care dollar -- should prompt policymakers to reexamine the old pennywise way of looking at health care and give more weight to the value of innovation and the resulting benefit to patients."
Copies of the Executive Summary of the research are available from PhRMA. The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country's leading research-based pharmaceutical and biotechnology companies, which are devoted to inventing medicines that allow patients to lead longer, happier, healthier and more productive lives. Investing nearly $19 billion this year in discovering and developing new medicines, PhRMA companies are leading the way in the search for cures.
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PhRMA Internet Address: http://www.phrma.org
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