The lifetime costs and benefits of medical technology

J Health Econ. 2007 Dec 1;26(6):1081-100. doi: 10.1016/j.jhealeco.2007.09.003. Epub 2007 Oct 10.


Measuring the lifetime costs and benefits of medical technologies is essential in evaluating technological change and determining the productivity of medical care. Using data on Medicare beneficiaries with a heart attack in the late 1980s and 17 years of follow up data, I evaluate the long-term costs and benefits of revascularization after a heart attack. I account for non-random selection into treatment with instrumental variables; following McClellan, McNeil, and Newhouse, the instrument is the differential distance to a hospital capable of providing revascularization. The results show that revascularization is associated with over 1 year of additional life expectancy, at a cost of about $40,000. Revascularization, or other treatments correlated with it, appears to be highly cost-effective.

Publication types

  • Research Support, N.I.H., Extramural

MeSH terms

  • Aged
  • Aged, 80 and over
  • Cardiac Output, Low / surgery
  • Cost-Benefit Analysis / statistics & numerical data
  • Female
  • Humans
  • Life Expectancy
  • Male
  • Medical Laboratory Science / economics*
  • Medicare
  • Myocardial Revascularization / economics
  • Myocardial Revascularization / mortality
  • United States / epidemiology