US health care is notoriously expensive. But is it worth the price?

It's well known that the United States outspends other nations on health care (often without better outcomes), but the "best evidence" shows health care "is still very valuable, even at U.S. prices," Austin Frakt writes for the New York Times' "The Upshot."

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Frakt is a health economist who holds positions at the Department of Veterans Affairs, Boston University's School of Public Health, and the Harvard T.H. Chan School of Public Health.

The two keys to determining health care value: longevity and quality of care

Frakt writes that United States' high health spending can prompt the question: "How can such expensive health care be worth it?"

"One piece of the puzzle is connecting health care to longevity," Frakt contends.  

Life expectancy increased by 7.5 years between 1950 and the early 1990s, Frakt notes.  And one study shows that medical interventions for common disease were responsible for three years, or 40%, of that increase.

"Nearly all of this longevity gain is because of declines in infant mortality and in death from cardiovascular disease," Frakt writes. In fact, a CDC study found that 50% of the decline in mortality due to coronary heart disease between 1980 and 2000 could be attributed to U.S. health care.

And research has demonstrated health care's value beyond longevity, Frakt writes, noting that research has found "health care could improve the quality of life for patients with a wide variety of conditions, including unipolar depression, heart disease, osteoarthritis, pain accompanying terminal cancer, peptic ulcers, gallstones, migraines, bone fractures, and vision and hearing impairments."

That said, these studies all have limitations, Frakt writes. For one, the improved quality of life and increased longevity seen between the 1950s and the 2000s could be due to factors other than health care, such as lifestyle changes and environment, Frakt writes. "So some of the improvement … that we may attribute to health care could actually be a result of changes in diet, exercise and the like," Frakt explains.

Similarly, lifestyle and environmental factors "almost certainly" cause some of the conditions that the health care system is trying to treat, Frakt writes. "In other words, the health system may be quite good at making us healthy, but other things outside the system may have made us sick in the first place," Frakt explains.

Putting a price tag on health care's value

But how much, exactly, have these life expectancy and quality of life gains cost?

Harvard economist David Cutler and colleagues estimated that each year of life gained between 1960 and 2000 cost about $20,000 for people under 65 and $85,000 for people age 65.

"Both figures are below the typical amounts that society is willing to spend to gain a year of life," Frakt writes. While "[t]here's no ironclad way to pin down the willingness to pay for a year of life," Frakt notes that "estimates extend to at least $150,000."

Frakt writes, "It's findings like these that have led some scholars to argue that health care is so valuable that we should be willing to spend even more on it"—and we have. Since 2000, gaining an additional year of life from the health care system for people age 65 has cost about $160,000—around twice the cost in 1980, Cutler's research shows.

Why American health care is 'still a bargain'

So, in today's health system, how much good health care can more money buy? "Studies are mixed on this point," according to Frakt. "Some suggest that spending more provides substantial additional benefit; some suggest it doesn't," Frakt writes.

For example, one Health Affairs  study of the seven chronic conditions that are responsible for the most mortality in the United States found that, when comparing cost to length and quality of life, "the health system provides good value," Frakt writes. "So even at American prices, health care is still a bargain," Frakt states. "But that doesn't mean there isn't also waste in the system" (Frakt, "The Upshot," New York Times, 5/20).

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