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The Technology of Birth: Is It Worth It?

In: Frontiers in Health Policy Research, Volume 3

  • David M. Cutler
  • Ellen Meara

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, June.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 9829.
    Handle: RePEc:nbr:nberch:9829
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. 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.
    2. David Meltzer, 1997. "Accounting for Future Costs in Medical Cost-Effectiveness Analysis," NBER Working Papers 5946, National Bureau of Economic Research, Inc.
    3. 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.
    4. 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.
    5. Meltzer, David, 1997. "Accounting for future costs in medical cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 33-64, February.
    6. David M. Cutler & Ellen Meara, 1997. "The Medical Costs of The Young and Old: A Forty Year Perspective," NBER Working Papers 6114, National Bureau of Economic Research, Inc.
    7. 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.
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