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

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  • Frank R. Lichtenberg

Abstract

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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  • Frank R. Lichtenberg, 2011. "The Impact of Therapeutic Procedure Innovation on Hospital Patient Longevity: Evidence from Western Australia, 2000-2007," NBER Working Papers 17414, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17414
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    References listed on IDEAS

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    1. Frank R. Lichtenberg & Gautier Duflos, 2008. "Pharmaceutical innovation and the longevity of Australians: A first look," Advances in Health Economics and Health Services Research, in: Beyond Health Insurance: Public Policy to Improve Health, pages 95-117, Emerald Group Publishing Limited.
    2. 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 Not-for-Profit and For-Profit Institutions, pages 169-194, National Bureau of Economic Research, Inc.
    3. Productivity Commission, 2005. "Impacts of Advances in Medical Technology in Australia," Research Reports, Productivity Commission, Government of Australia, number 17.
    4. 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.
    5. 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.
    6. Woolf, S.H. & Johnson, R.E. & Phillips Jr., R.L. & Philipsen, M., 2007. "Giving everyone the health of the educated: An examination of whether social change would save more lives than medical advances," American Journal of Public Health, American Public Health Association, vol. 97(4), pages 679-683.
    7. Frank Lichtenberg, 2011. "The quality of medical care, behavioral risk factors, and longevity growth," International Journal of Health Economics and Management, Springer, vol. 11(1), pages 1-34, March.
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    1. Hostenkamp, Gisela & Lichtenberg, Frank R., 2015. "The impact of recent chemotherapy innovation on the longevity of myeloma patients: US and international evidence," Social Science & Medicine, Elsevier, vol. 130(C), pages 162-171.
    2. Frank R. Lichtenberg & Billie Pettersson, 2014. "The impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, 1997-2010: evidence from longitudinal, disease-level data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(3), pages 239-273, April.
    3. Spyros Arvanitis & Euripidis N. Loukis, 2014. "Investigating the effects of ICT on innovation and performance of European hospitals," KOF Working papers 14-366, KOF Swiss Economic Institute, ETH Zurich.
    4. Lichtenberg, Frank R. & Tatar, Mehtap & Çalışkan, Zafer, 2014. "The effect of pharmaceutical innovation on longevity, hospitalization and medical expenditure in Turkey, 1999–2010," Health Policy, Elsevier, vol. 117(3), pages 361-373.

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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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