The Impact of Therapeutic Procedure Innovation on Hospital Patient Longevity: Evidence from Western Australia, 2000-2007

24 Pages Posted: 21 Sep 2011 Last revised: 12 Jan 2012

See all articles by Frank R. Lichtenberg

Frank R. Lichtenberg

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: September 2011

Abstract

We investigate the effect of therapeutic procedure innovation in general on the longevity of all hospital patients, i.e. patients with a variety of medical conditions. The analysis is based on data on over one million discharges from public and private hospitals in Western Australia (WA) during the period 2000-2007. We can measure survival for a period as long as 8 years after admission, and we know the date each procedure was added to the Medicare Benefits Schedule.Estimates based on patient-level data indicate that therapeutic procedure innovation increased the life expectancy of WA hospital patients by almost 3 months between 2000 and 2007, 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.. 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.

Suggested Citation

Lichtenberg, Frank R., The Impact of Therapeutic Procedure Innovation on Hospital Patient Longevity: Evidence from Western Australia, 2000-2007 (September 2011). NBER Working Paper No. w17414, Available at SSRN: https://ssrn.com/abstract=1931186

Frank R. Lichtenberg (Contact Author)

Columbia Business School - Finance and Economics ( email )

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