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April 01, 2004
Health Care Matters: Pharmaceuticals, Obesity and the Quality of Life
Authors: Richard D. Miller, H.E. Frech III
ISBN: 084474194-9
Publisher: AEI Press
For many years, health policy in developed countries has rested on the assumption that health-care consumption does relatively little to produce better health. This new study shows that it is time to rethink this conventional wisdom, in particular for pharmaceutical consumption. In this follow-on to their previous book, The Productivity of Health Care and Pharmaceuticals: An International Comparison, Richard D. Miller, Jr. and H. E. Frech, III extend the analysis to quality of life, disease-specific life expectancy and the impact of obesity. This is possible because of newly available data from the World Health Organization and the Organization for Economic Cooperation and Development (OECD) on disability-adjusted life expectancy, obesity and disease-specific death rates. Employing a logical econometric model, they focus on eighteen member countries of the OECD. They find that pharmaceutical consumption is even more powerful in improving quality of life than in improving length of life. They find variation by cause of death and by age. For individuals under 70, pharmaceutical consumption lowers circulatory disease mortality, but has little effect on mortality due to either cancer or respiratory disease. At later ages, pharmaceutical consumption generally has a stronger impact.
They estimate how much it would cost to raise life expectancy (or disability-adjusted life expectancy) with increased pharmaceutical consumption. Pharmaceutical consumption turns out to be a relatively cheap way to extend life. For instance, their results indicate that the lifetime cost of extending the life expectancy for forty-year-old Americans by one year is roughly $17,000 for men and $16,000 for women. Since current estimates place the benefit to society of an extra year of life as high as $150,000, this is a bargain. In fact, for all countries the estimates of extending life expectancy by one year through increased drug consumption stood well below this level.
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