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The Impact of Therapeutic Procedure Innovation on Hospital Patient Longevity: Evidence from Western Australia, 2000-2007

  • Frank R. Lichtenberg

We investigate the effect of therapeutic procedure innovation in general on the longevity of all hospital patients, i.e. patients with a variety of medical conditions. The analysis is based on data on over one million discharges from public and private hospitals in Western Australia (WA) during the period 2000-2007. We can measure survival for a period as long as 8 years after admission, and we know the date each procedure was added to the Medicare Benefits Schedule. Estimates based on patient-level data indicate that therapeutic procedure innovation increased the life expectancy of WA hospital patients by almost 3 months between 2000 and 2007, controlling for the patient's age, sex, Diagnosis Related Group (DRG, over 600 categories), Aboriginal status, marital status, insurance coverage (whether or not the patient had private insurance), postcode (over 400 postcodes), year of hospital admission, and number of procedures performed.. Estimates based on longitudinal DRG-level data also indicate that therapeutic procedure innovation increased the life expectancy of WA hospital patients, but the implied increase may be smaller--about 2 months. In either case, therapeutic procedure innovation in WA hospitals appears to have been remarkably cost-effective, because it increased the cost of medical procedures by a negligible amount.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17414.

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Date of creation: Sep 2011
Date of revision:
Publication status: published as Lichtenberg, Frank R., 2013. "The impact of therapeutic procedure innovation on hospital patient longevity: Evidence from Western Australia, 2000â2007," Social Science & Medicine, Elsevier, vol. 77(C), pages 50-59.
Handle: RePEc:nbr:nberwo:17414
Note: HC HE PR
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  1. Productivity Commission, 2005. "Impacts of Advances in Medical Technology in Australia," Research Reports, Productivity Commission, Government of Australia, number 17.
  2. Adriana Lleras-Muney & Frank R. Lichtenberg, 2010. "Are the More Educated More LIkely to Use New Drugs?," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 671-696 National Bureau of Economic Research, Inc.
  3. Frank R. Lichtenberg, 2009. "The Quality of Medical Care, Behavioral Risk Factors, and Longevity Growth," NBER Working Papers 15068, National Bureau of Economic Research, Inc.
  4. Jonathan S. Skinner & John Wennberg, 2000. "How Much Is Enough? Efficiency and Medicare Spending in the Last Six Months of Life," NBER Chapters, in: The Changing Hospital Industry: Comparing For-Profit and Not-for-Profit Institutions, pages 169-194 National Bureau of Economic Research, Inc.
  5. Frank Lichtenberg, 2012. "Contribution of Pharmaceutical Innovation to Longevity Growth in Germany and France, 2001–7," PharmacoEconomics, Springer, vol. 30(3), pages 197-211, March.
  6. Frank R. Lichtenberg & Gautier Duflos, 2008. "Pharmaceutical innovation and the longevity of Australians: a first look," NBER Working Papers 14009, National Bureau of Economic Research, Inc.
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