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The Value of Knowing: National Health Accounts. David M. Cutler, Harvard University. Questions We Need to Answer. US medical spending has doubled as a share of GDP since 1975. Is it worth it? Where should we spend our research dollars most productively? Which country is best at hockey?. - PowerPoint PPT Presentation
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The Value of Knowing: National Health Accounts
David M. Cutler, Harvard University
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Questions We Need to Answer
• US medical spending has doubled as a share of GDP since 1975. Is it worth it?
• Where should we spend our research dollars most productively?
• Which country is best at hockey?
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What is Needed?
• A way to tell what is happening in the medical sector, and what it’s worth.
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The Health Sector
Inputs• Medical spending
– By disease• Behaviors
– Smoking, obesity• Environment• Genetics
Outputs• Population health
– By demographic group
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The Analogy: GDPInputs: Factor payments• Wages paid to workers• Raw materials• Return to capital
Output: GDP• Overall• Consumption,
investment, and government spending
• By industry
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What We’re Up To
Inputs• Medical spending
• Behaviors• Environment• Genetics
Outputs• Population health1
2
3
The “industry” in medical care is the disease
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More on the Rationale
“The BLS should develop a research program to look beyond its current "market basket" framework for the CPI…
“We strongly endorse a move in the CPI away from the pricing of health care inputs to an attempt to price medical care outcomes.”
- The Boskin Commission
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The Idea of a Satellite Account
“[W]e recommend the development of satellite accounts to report on selected activities not included in the conventional accounts. Satellite accounts can link to the existing economic accounts as appropriate, but also expand into areas that the NIPAs do not cover.”
- Beyond the Market
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Medical Spending
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Medical Spending: Big Challenges
• The industry– MI vs. Diabetes– Prevention vs. screening vs. treatment
• The data – They don’t give conditions unless people say they are why they
sought care.– We know what we spend on diabetes, but not what the average
diabetic spends.
• The level of analysis – What disease to attribute to an office visit for a hypertensive
diabetic with a past MI?
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Cost Model Approach
Annual spending = condition categories + e
Note that this is a ‘person-based’ method rather than an ‘encounter-based’ method.
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Taking it Back Farther
Spending
CHD
Diabetes
Cancer
Smoking
BMI
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Population Health
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Components of Population Health
• Mortality• Quality of life
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1. Official mortality data are problematic
• Accuracy of diagnosis coding is in doubt• Doesn’t get at risk factors (obesity) or
precursor diseases (diabetes)
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Mortality model approach
• Estimating models of mortality, similar to spending
Prob die = condition categories + e
• With these and the disease / risk factor transition models, we will have a way to determine ‘true’ cause of death
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2. Quality of Life
Health
Disease 1
Domain 1:Symptoms / Impairments
Domain 2:Symptoms / Impairments
Domain 3:Symptoms / Impairments
Disease 2 Disease 3
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Trend in Quality of Life, 1987-2004
0.75
0.76
0.77
0.78
0.79
0.80
0.81
1987 2001 2002 2003 2004
Increased obesity
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Symptoms/impairments with largest decrements
0.00
0.05
0.10
0.15
0.20
0.25
Primary
Acti
vity
Social
/Sec
onda
ry
Self-ca
re
Walk
ing
Bend/L
ift
Depres
sive
Anxiou
sVisi
on
Hearin
g
Dec
rem
ent o
n 0
to 1
sca
le
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Disease Models
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A Catalog
CHD Huge improvements; medical care plays big role (published in Health Affairs)
Stroke Large decline in mortality from stroke – not clear why
Cancer Models have been developed; need to use to answer this question
PNA Large decline in mortality, likely related to better medical care
Depression No change in lifetime prevalence but big reduction in current prevalence
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What Will We Learn? My Guesses
• By and large, technological advance has been very important and cost effective
• In recent years, obesity trends have significantly increased spending and lowered health– May have overwhelmed technology in parts
