The relentless increase in medical care costs in the past half century has fueled intense debate over the value of medical care. Is it worth it for the United States to spend so much on medical care? What could we do to increase the benefits of medical spending relative to the costs? Debate about these issues has been hampered by the lack of good information on the benefits of medical care, and particularly, the link between individual components of medical spending and resulting health improvements. This proposal rests on the fundamental assumption that productivity improvement in medical care can be most effectively achieved by measuring systematically and jointly both the benefits and the costs of medical care, and then comparing the two. We term this National Health Accounts;forming such accounts is the overarching goal of this project. At the broadest level, we have two specific aims: to measure population health alongside medical spending;and to consider the costs and benefits of past changes in medical technology and a range of interventions designed to improve the productivity of the medical system. We propose to realize these goals with five specific research components: (1) tracking population health, including both mortality and quality of life, and decomposing health trends by symptoms and impairments, and underlying diseases;(2) tracking medical spending, with an understanding of spending growth at the disease level, and the cost of particular services;(3), (4), and (5) undertaking detailed study of the costs and benefits of medical interventions in the care of three common conditions in the elderly: cardiovascular disease (including both heart disease and stroke);cancer (lung, colorectal, and breast);and depression. This proposal and its resulting products have dual ends - to further academic inquiry relating to health system value and to orient public policy. We will work with leading academics and members of government agencies to reach both goals. Establishment of a set of national health accounts will allow us as a society to understand which medical interventions improve the health of the U.S. population most efficiently.

National Institute of Health (NIH)
National Institute on Aging (NIA)
Research Program Projects (P01)
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Special Emphasis Panel (ZAG1-ZIJ-1 (O1))
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Baker, Colin S
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National Bureau of Economic Research
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