August 26th, 2005 - Open Knowledge
Aug. 26th, 2005
A fascinating paper. Healthcare spending has little measurable effect on health or lifespan.
"Gender, exercise and social status, for example, can change lifespans by ten to
fifteen years or more (Lantz, House, Lepkowski, Williams, Mero, & Chen, 1998). When one
looks at medical spending, however, the usual2 finding in such studies is no effect. When
comparing nations or counties or individuals, people who get more medicine have no signif-
icant difference in health when compared to people who get less medicine.
For example, Jonathan Skinner and John Wennberg looked at five million Medicare
patients in about 3500 hospital service areas in 1990. They looked to see if people died
less in areas where, during the last six months of life, Medicare spent more on treatment.
After controlling for age, sex, race, median income, poverty, education, urbanization, and
initial health limitations, Skinner and Wennberg found that the average effect of spending
$1000 more was somewhere between increasing lifespan by about five days and decreasing
it by about fifteen days.3 Areas that kept patients in the intensive care unit one more day
on average reduced lifespan by between fifteen and seventy five days (Skinner & Wennberg,
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