Are the Benefits of Medicine Worth What We Pay for it?

29 Pages Posted: 27 Apr 2011

See all articles by David M. Cutler

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Date Written: April 1, 2004

Abstract

Is medical care worth it? Conventional wisdom says no, but my answer is emphatically yes. The benefits that we have received from medical advance are enormously greater than the costs. I suggest that public policy far outweighs the importance of cost containment relative to coverage expansion; we could in fact spend more and get a lot more for our health care dollars. In what follows, I talk about the costs and benefits of medical advance, focusing on two areas where I have done the most work: improvements in cardiovascular disease care and care for low birth weight infants. In each case, I present evidence that the benefits justify the costs, and discuss what that implies for public policy. I note at the outside that I shall be summarizing a large volume of research that I and others have done. I have compiled my views into a book, YOUR MONEY OR YOUR LIFE (2004, Oxford University Press), that the interested reader should consult.

JEL Classification: I12, I18

Suggested Citation

Cutler, David M., Are the Benefits of Medicine Worth What We Pay for it? (April 1, 2004). Available at SSRN: https://ssrn.com/abstract=1822511 or http://dx.doi.org/10.2139/ssrn.1822511

David M. Cutler (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center, Room 315A
Cambridge, MA 02138
United States
617-496-5216 (Phone)
617-495-8570 (Fax)

National Bureau of Economic Research (NBER) ( email )

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United States
617-868-3900 (Phone)
617-868-2742 (Fax)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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