Are quality-adjusted medical prices declining for chronic disease?

At least for diabetes care, the answer seems to be yes, according to Karen Eggleson,

We analyze individual-level panel data on medical spending and health outcomes for 123,548 patients with type 2 diabetes in four health systems. Using a “cost-of-living” method that measures value based on improved survival, we find a positive net value of diabetes care: the value of improved survival outweighs the added costs of care in each of the four health systems. This finding is robust to accounting for selective survival, end-of-life spending, and a range of values for a life-year or, equivalently, to attributing only a fraction of survival improvements to medical care.

That is from a new NBER working paper.  One way to read this paper is to be especially optimistic about medical progress, and also the U.S. health care system and furthermore the net contribution of science and medicine to economic growth.  Another way to read this paper is to be especially pessimistic about human discipline and the ability to follow doctor’s orders.


The price of insulin has gone off the charts; up there with the price of life. For a diabetic, insulin is, well, priceless. Quality-adjusted is double-speak.

Nah, plenty of diabetics get by on just secretagogues and carbohydrate restriction.

Most of the new diabetes treatments are about preventing the need for insulin so I would say quality adjustment is fair.

Further out there are islet cell transplants which should again relieve insulin dependence.

Thank you for the auspicious writeup. It in truth was once a leisure account it.
Look advanced to far added agreeable from you! By the way, how could we keep up a

The vast majority of people with type 2 diabetes don't even take insulin (unlike type 1), and it's not even clear that it extends lifespan very much.

Yup. Notice that the study only hails type 2 diabetes as proof that things are looking up but for type 1 diabetes prices are skyrocketing:

"Insulin is a 100-year-old drug whose wholesale price has tripled in ten years."

It is like this for every single medical condition.

Modern medicine lets you live longer, do more with what time you have, or do it cheaper. At worst case, we are better at mitigating comorbodities.

After all, even medicine is just wasting money - which disease protocol do you think we should change? I cannot think of a one protocol where changing would result in significant savings without patients dying.

So how to you explain that more spending does not result in better health?

Worse starting health. Obesity is up. Alcoholic liver disease is up. Vaccinations are down. Stress is up. Diabetes is up. Before getting into anything remotely controversial, Americans (and basically the entire developed world) are starting from a less healthy baseline. Cigarette useage is basically the only exception.

A bunch of social determinants of health, like (parental) marriage rate, religious praxis, civic engagement, friendships, etc. are all moving in bad directions as well.

Health outcomes are determined by many things and depending on how you break them down you get different weights. Kaiser, for instance, puts all of healthcare down for about 10% of final health outcomes (genetics 30%, environment 20%, and personal actions 40%); per Kaiser we need to increase healthcare efficacy four fold for every decrement in personal actions. University of Wisconsin research focuses on things that we could change (i.e. ignoring genetics) and allots only 20% to medicine (they go 30% health behaviors, 40% socio-economic, and physical environment 10%). Again things outside of medicine have much more affect.

And this should not surprise us. Curing cancer for the average individual would be correlated with less life expectancy gain than if she decided to attend church weekly. For the average individual, curing dementia would do less than having them maintain healthy eating habits.

Measure healthcare's effect directly. How long would we expect patients to live without the newest advances and services. Comparing a bunch of church going, married, non-obese, non-diabetic people from 1960 to the agnostic, unmarried, obese, diabetic people of today is nothing more than stacking the deck.

You didn't mention it but diet and exercise should absolutely be at the top when it comes to health. Sadly, in today's world, we don't get enough of either in the right quantities. Medicine and health care should be seen as the last resort for good health, not the first. Ounce of prevention beats a pound of cure.

I see patients on their worst day(s). Typically, I would say 2/3rds of them would not see me for more than a decade if they had a good diet, exercised, and did not do blindingly stupid things (e.g. get intoxicated and then do dangerous things, sell drugs, take drugs of unknown strength). I can only imagine how much primary care sees these days that could have been solved by a good diet and exercise regimen.

Sure, I appreciate your points (and agree), but couldn't find the KFF or Wisconsin studies you reference (although I have heard of them before). Do you happen to have the references?

Did you read Alex's Baumol effect paper? That is the explanation

'changing would result in significant savings without patients dying'

Everyone dies, but that is something that a major part of the American medical establishment simply rejects, as money can only be made off a living patient.

Why yes, I do know people who had to carefully plan simply having their respirator tuned off, including not telling those who would have attempted to thwart those plans. Admittedly, the glee involved in that successful deception was a bit unseemly, but it is very difficult to avoid all those people who think that the cure for something like ALS will be available any day now, or that miracles are a realistic treatment option. 18 years and counting for the person who decided that no one lives forever, and that there would be no cure available in their life time. Not to mention the life time of every one else who has died of ALS till now.

Admittedly, lung suctioning is probably better than simply drowning in one's own accumulated fluids, at least when the person doing it has a bit of training. Why yes, I do know how to suction lungs, in case you were curious, without causing injury or infection. Almost makes me want to see if I was breaking some law about unauthorized medical procedures to be honest (Roberts Oxygen did not care, admittedly).

All patients die. As do all doctors. There has been no change involving that truth, regardless of how much or how little money is spent or which protocols are followed. Keeping someone alive for three additional days is not a triumph, it is generally a travesty. Though it is definitely profitable, which tends to not be mentioned in these discussions.

Odd - hit cancel, but posted anyway. Mainly because rereading the comment, it is possible that you too recognize a certain boundary of utter futility - ' even medicine is just wasting money' - involving medicine's at times truly heroic efforts to extract as much money as possible from a patient.

I'm pleased for the cancel fail: the television commercial, mercifully which has ended, with the tag line "living longer" and the smiling and happy lung cancer patient whose very best prospects are a year more of suffering, always makes me want to throw a baseball at the television. Chronic disease is killing us. That's meant as both irony and fact. My brother died of CLL, living with me once he could no longer work. The arc of his disease was common, from the initial conventional chemo all the way to drug trials at the end, the side effects of each "cure" worse than the one before (although it's impossible to tell with drug trials, he was dead in a short time from that point anyway). I am entering old age, and it's been a shock to me how quickly my body is failing. Do I succumb to the pressure to do something, and become a habit in my physician's office and at the pharmacy?

"One way to read this paper is to be especially optimistic about medical progress, and also the U.S. health care system and furthermore the net contribution of science and medicine to economic growth. "

Higher costs, individually and aggregate, mean higher consumption, a precondition for higher production, is what drives growth in GDP, measured in money, like dollars.

If costs were going down, gdp would be going down, which would be considered a shrinking economy.

Cuba has had a shrinking economy, but in general significantly improved health outcomes, since 1960. Thus, saying the US health care system is performing well is to ignore what the rest of the world is accomplishing in health care. I'm not arguing Cuba as forced by US policy is anything close to ideal, but given the economic contraction forced on Cuba by the US having its dictator kicked out, health care in Cuba has improved greatly even as health care costs have been cut.

Another way to read this paper is that it's a snapshot of the cost of Type II diabetes treatment measured against a critical input premise for the value of living.

As insulin prices increase, there’s no sense in carrying around “naked” vials.

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