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The Technology of Birth: Is It Worth It?

Author

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  • Cutler David M.

    (Harvard University and NBER)

  • Meara Ellen

    (Harvard University and NBER)

Abstract

We evaluate the costs and benefits of increased medical spending for low-birthweight infants. Lifetime spending on low-birthweight 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-birthweight infants at over 500 percent. Although prenatal care and influenza shots are more cost-effective than neonatal care, it 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 to 74. We conclude that the answer to the question posed in this paper is a resounding yes.

Suggested Citation

  • Cutler David M. & Meara Ellen, 2000. "The Technology of Birth: Is It Worth It?," Forum for Health Economics & Policy, De Gruyter, vol. 3(1), pages 1-37, January.
  • Handle: RePEc:bpj:fhecpo:v:3:y:2000:n:3
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    References listed on IDEAS

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    1. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, April.
    2. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    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 1263-1296, December.
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    Citations

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    Cited by:

    1. Stefan Felder, 2006. "Lebenserwartung, medizinischer Fortschritt und Gesundheitsausgaben: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(s1), pages 49-73, May.
    2. Katherine Baicker & Douglas Staiger, 2005. "Fiscal Shenanigans, Targeted Federal Health Care Funds, and Patient Mortality," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 345-386.
    3. Shigeoka, Hitoshi & Fushimi, Kiyohide, 2014. "Supplier-induced demand for newborn treatment: Evidence from Japan," Journal of Health Economics, Elsevier, vol. 35(C), pages 162-178.
    4. Freedman, Seth & Lin, Haizhen & Simon, Kosali, 2015. "Public health insurance expansions and hospital technology adoption," Journal of Public Economics, Elsevier, vol. 121(C), pages 117-131.
    5. Marianne Bitler, 2005. "Effects of Increased Access to Infertility Treatment on Infant and Child Health Outcomes: Evidence from Health Insurance Mandates," PPIC Working Papers 2005.06, Public Policy Institute of California.
    6. Fung, Winnie & Robles, Omar, 2016. "Effects of antenatal testing laws on infant mortality," Journal of Health Economics, Elsevier, vol. 45(C), pages 77-90.
    7. David M. Cutler & Mark McClellan, 2001. "Productivity Change in Health Care," American Economic Review, American Economic Association, vol. 91(2), pages 281-286, May.
    8. Cutler, David & McClellan, Mark, 2001. "Productivity Change in Health Care," Scholarly Articles 2640585, Harvard University Department of Economics.
    9. Douglas Almond & Joseph J. Doyle & Amanda E. Kowalski & Heidi Williams, 2010. "Estimating Marginal Returns to Medical Care: Evidence from At-risk Newborns," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 591-634.
    10. 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.
    11. Brian Beach & Martin Saavedra, 2015. "Mitigating the Effects of Low Birth Weight: Evidence from Randomly Assigned Adoptees," American Journal of Health Economics, MIT Press, vol. 1(3), pages 275-296, Summer.
    12. 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.

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