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We're Extending Our Lives, But at What Price?
By Ross Kerber, The Boston Globe
September 26, 2005
How much is an extra year of your life worth?
That blunt inquiry is at the heart of a Rand Corp. study to be published today, and the answers are sobering.
The well-known think tank found that costly future treatments such as improved defibrillators or drugs for Alzheimer's disease pose great financial risk to the Medicare program.
For instance, the study found that new pacemakers could cost Medicare and other insurers $1.4 million for every extra year of life they add. In comparison, healthcare economists often use $100,000 per added year of life as the maximum of benefit worth paying by the government insurer. In another example, the study predicted the use of tumor-strangling drugs would mean $498,809 per additional life-year.
Dana Goldman, the study's lead author and Rand's director of health economics, says the conclusions cut across the conventional wisdom that the biggest risk to Medicare is the aging of the US population.
Goldman said his study shows that the unforeseen costs of new technologies might be an even more difficult problem because they are less predictable.
''If someone comes up with a new pill, say to prevent aging, that could break the bank in ways that we didn't foresee," he said.
The findings, part of a $2 million federally backed review of future spending on the elderly, mark the largest attempt yet to quantify the economic impact to Medicare of hot medical research areas, from cancer vaccines to anti-aging compounds.
The strapped program already covers healthcare bills for 41 million elderly Americans and must constantly balance the costs and benefits of new treatments. In January, for instance, Medicare officials expanded the group of heart failure patients eligible to receive implanted defibrillators by 600,000 to 1.6 million people, which could add $3 billion a year in annual costs.
Researchers at Rand and other institutions including Stanford University began the study with several scenarios aimed at predicting Americans' future health. While elderly health has been improving since the 1980s overall, rising rates of obesity and diabetes among the young suggest the trend will change.
Yet even healthier entrants into the Medicare program won't save the system that much money because they are living longer, the researchers found.
Total elderly healthcare spending is likely to reach around $600 billion by 2030 in any case, according to the study. The next question the study looked at is whether new technologies might reduce spending instead. Goldman's research, to be published today in the peer-reviewed policy journal Health Affairs, highlights 10 technologies that could have the biggest impact on overall health and longevity.
Three of these technologies are new devices to treat cardiovascular disease. The others are drugs to prevent or treat cancer, neurological disease, diabetes, and aging in general. All represent potentially revolutionary treatments, and some could prove cost-effective.
Anti-aging compounds that reproduced the effects of low-calorie diets could cost just $8,790 per added life-year, for instance. And if the many cancer vaccines now in clinical trials come to market, they might cost $18,236 per life-year.
But other treatments could be costlier, such as drugs to sensitize diabetic patients to insulin or the blood-pumping aids known as left-ventricular assist devices.
''It is unlikely that a 'silver bullet' will emerge to both improve health and dramatically reduce medical spending," the authors found.
These dismal conclusions aren't shared by everyone. Harvard University health economist David M. Cutler says in a Health Affairs editorial that medical advances may become cheaper over time. The same thing happened to cellphones and computers.
Cutler also says many of the technical innovations that Goldman focuses on are incremental improvements rather than examples of technologies that might cut costs and perhaps haven't been invented yet. Instead of angioplasty to clear clogged cardiac arteries, he writes, some future technique might require less operating time and thus cut costs.
Another criticism of the report is that even the more expensive treatments are worth it economically, by keeping productive people at work.
''Everybody's looking at the costs, but nobody's looking at the value of the lives saved," said Mark Brager, a spokesman for Adva-Med, a Washington trade group that represents medical-device companies.
View the Rand Corp. Report
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