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The Technology of Birth: Is It Worth It?

In: Frontiers in Health Policy Research, Volume 3

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  • David M. Cutler
  • Ellen Meara

Abstract

We evaluate the costs and benefits of increased medical spending for low birth weight infants. Lifetime spending on low birth weight babies increased by roughly $40,000 per birth between 1950 and 1990. The health improvements resulting from this have been substantial. Infant mortality rates fell by 72 percent over this time period, largely due to improved care for premature births. Considering both length and quality of life, we estimate the rate of return for care of low birth weight infants at over 500 percent. Although prenatal care and influenza shots are more cost effective than neonatal care, this is significantly more cost effective than other recent innovations such as coronary artery bypass surgery, treatment of severe hypertension, or routine pap smears for women aged 20-74. We conclude that the answer to the question posed in this paper is a resounding 'Yes'.

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This chapter was published in:

  • Alan M. Garber, 2000. "Frontiers in Health Policy Research, Volume 3," NBER Books, National Bureau of Economic Research, Inc, number garb00-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 9829.

    Handle: RePEc:nbr:nberch:9829

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    References

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    1. Meltzer, David, 1997. "Accounting for future costs in medical cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 33-64, February.
    2. David M. Cutler & Elizabeth Richardson, 1999. "Your Money and Your Life: The Value of Health and What Affects It," NBER Working Papers 6895, National Bureau of Economic Research, Inc.
    3. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December.
    4. David Meltzer, 1997. "Accounting for Future Costs in Medical Cost-Effectiveness Analysis," NBER Working Papers 5946, National Bureau of Economic Research, Inc.
    5. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    6. David M. Cutler & Ellen Meara, 1998. "The Medical Costs of the Young and Old: A Forty-Year Perspective," NBER Chapters, in: Frontiers in the Economics of Aging, pages 215-246 National Bureau of Economic Research, Inc.
    7. Dora L. Costa, 1998. "Understanding the Twentieth Century Decline in Chronic Conditions Among Older Men," NBER Working Papers 6859, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Anna Aizer & Adriana Lleras-Muney & Mark Stabile, 2004. "Access to Care, Provider Choice and Racial Disparities," NBER Working Papers 10445, National Bureau of Economic Research, Inc.
    2. Anna Aizer & Adriana Lleras-Muney & Mark Stabile, 2005. "Access to Care, Provider Choice, and the Infant Health Gradient," American Economic Review, American Economic Association, vol. 95(2), pages 248-252, May.
    3. Douglas Almond & Joseph J. Doyle, Jr. & Amanda E. Kowalski & Heidi Williams, 2010. "Estimating Marginal Returns to Medical Care: Evidence from At-Risk Newborns," The Quarterly Journal of Economics, MIT Press, vol. 125(2), pages 591-634, May.
    4. Watson, Tara, 2006. "Public health investments and the infant mortality gap: Evidence from federal sanitation interventions on U.S. Indian reservations," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1537-1560, September.
    5. Stefan Felder, 2006. "Lebenserwartung, medizinischer Fortschritt und Gesundheitsausgaben: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(s1), pages 49-73, 05.
    6. Katherine Baicker & Douglas Staiger, 2004. "Fiscal Shenanigans, Targeted Federal Health Care Funds, and Patient Mortality," NBER Working Papers 10440, National Bureau of Economic Research, Inc.
    7. Elizabeth Wilde, 2008. "Do Response Times Matter? The Impact of EMS Response Times on Health Outcomes," Working Papers 1065, Princeton University, Department of Economics, Industrial Relations Section..
    8. David Cutler & Ellen Meara, 2001. "Changes in the Age Distribution of Mortality Over the 20th Century," NBER Working Papers 8556, National Bureau of Economic Research, Inc.
    9. Kenneth Y. Chay & Michael Greenstone, 2003. "Air Quality, Infant Mortality, and the Clean Air Act of 1970," NBER Working Papers 10053, National Bureau of Economic Research, Inc.
    10. David M. Cutler & Mark McClellan, 2001. "Productivity Change in Health Care," American Economic Review, American Economic Association, vol. 91(2), pages 281-286, May.
    11. Cutler, David & McClellan, Mark, 2001. "Productivity Change in Health Care," Scholarly Articles 2640585, Harvard University Department of Economics.
    12. Jonathan Skinner & Elliott Fisher & John E. Wennberg, 2001. "The Efficiency of Medicare," NBER Working Papers 8395, National Bureau of Economic Research, Inc.
      • Jonathan S. Skinner & Elliott S. Fisher & John Wennberg, 2005. "The Efficiency of Medicare," NBER Chapters, in: Analyses in the Economics of Aging, pages 129-160 National Bureau of Economic Research, Inc.
    13. Tara Watson, 2005. "Public Health Investments and the Infant Mortality Gap: Evidence from Federal Sanitation Interventions on U.S. Indian Reservations," Department of Economics Working Papers 2005-02, Department of Economics, Williams College.

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