Wednesday, January 27, 2010

Health Care Cost Effectiveness

The New York Times has a great article on end-of-life care and cost effectiveness. In the article the authors take another look at the Dartmouth study of end-of-life care, in which US government officials use to conclude that the US government could save $700 billion a year if medical care was produced more cost effectively. Now that is a lot of money - yet we should be skeptical. Why?

Well, first of all, the study only looks at those that died, not those that lived - hence an end-of-life study. But the problem is that if you only research the cost of those that died, then finding the real benefits of medical care (keeping people from dying) is missed.

Second, it is very difficult to know which patients will live and which will die. These two coupled together make setting treatment policy very difficult. If you knew which patients were to die, the optimal amount of treatment (and cost) would be zero; but that's the point, we just do not know.

What would be interesting, is to take a look at various components of treatment, much like was done by the research by the California hospitals (elderly people with heart failure) and look at both the successes and failures in terms of cost of treatment. What is interesting is that the authors conclude that more treatment does actually help. Could that "more treatment" be then done more cost-effectively - that to me is the really interesting economic question.

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