The principle of values: Health costs are worth it

AMA Leader Commentary. By Cecil B. Wilson, MD, Oct. 2, 2006.

AMA LEADER COMMENTARY

A few words about current events in medical practice

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A message to all AMA members from the chair of the AMA Board of Trustees, Cecil B. Wilson, MD.

Economic commentators continue to surprise me in the way they portray the U.S. health care system. They voice great alarm at the growth in health care expenditures, pointing out the fact that health care outlays amount to 16% of gross domestic product.

Health care is a $2 trillion slice of a $13 trillion GDP pie, and critics wring their hands. Another $2 trillion slice is investment in capital goods and equipment. Pundits cheer when that number increases and wring their hands when it declines. Why not cheer when our investment in human capital expands?

Why the double standard? What has misled conventional wisdom? There are probably a number of reasons. But perhaps the public misjudges health care in part because we have been reluctant to counter talk about rising costs by pointing out rising value received.

The value principle has plenty of evidence in its favor.

A recent study by Harvard University health economist David Cutler, PhD, and his associates found that from 1960 through 2000, life expectancy increased 6.97 years, and the cost per year of life gained was $19,900.

Their conclusion: "On average, the increases in medical spending since 1960 have provided reasonable value."

Even allowing for professional understatement, the claim refutes those who cry "wolf" as each round of statistics reports increases in outlays for health care. Seven years more of life is an incredible return on investment. Seven more years to enjoy life, family, hobbies, travel and benefits of a free society. Seven more years to be a productive member of society increasing the economic wealth of our country.