The Value of Health Care
Or is it really just the value of living longer, for whatever reason. This is from a Kevin Murphy and Robert Topel article in the JPE in 2006:
During the twentieth century life expectancy at birth for a representative American increased by roughly 30 years. In 1900, nearly 18 percent of males born in the United States died before their first birthday; today, cumulative mortality does not reach 18 percent until age 62….
Reductions in mortality from 1970 to 2000 had an (uncounted) economic value to the 2000 U.S. population of about $3.2 trillion per year. Cumulative longevity gains during the twentieth century were worth about $1.3 million per person to the representative member of the 2000 U.S. population. Valued at the date they occurred, the production of longevity-related “health capital” would raise estimates of per capita output in the United States by from 10 to 50 percent, depending on the time period in question.
For the revival of this classic piece, thanks to Austin Frakt, who adds more references and commentary.
The question is: does health care have anything to do with this?
Almost all of the increase in longevity experienced during the past century had to do with control of infectious diseases through immunization, better sanitation, safer water supply, safer food supply and better treatment of cancer and heart disease. Here is an article from the CDC.
Interesting post. Here is the key sentence: “Or is it really just the value of living longer, for whatever reason.”
As someone who works with the families of Alzheimer’s patients, I instinctively question whether longer life spans make the nation richer. I see case after case where longetivity leads to impoverishment.
As a former pension plan administrator, I saw many examples where longetivity made retirement plans unaffordable.
I am reminded somehow of the Soviet commissar in the 1930’s who was told that individual gardens were more productive than collective farms. He responded, “Well, that may be true in practice, but it doesn’t work in theory.”
Is it possible that we have concurrent phenomena — i.e. the nation gets richer and people live longer.
But one thing does not cause the other…….
Help me out here, what am I missing?
that is Bob Hertz, not “Blob Hertz”. sorry