who died in the middle of the nineteenth century indicate a remarkable number of deaths at an old age. In fact, scientific medicine has done little to add years for people who have already reached their maturity. In the last 50 years, only four months have been added to the expected life span of a person who is already 60 years old.

[…] As far as we can tell, the decrease in death rates from the infectious killers of the nineteenth century is a consequence of the general improvement in nutrition and

I think the first two possibilities are important, too, but pde’s third possibility (which is quite close to the marginal v average issue) seems to have been addressed by RAND’s methodology: they had doctors assess the treatment decisions after the fact and they didn’t think the expensive group’s treatment any less useful. My impression is that it’s hard to distinguish between the two sets of care: the extra care isn’t just hand-holding or poorly-practiced new techniques.

I guess it’s possible that institutions do a better job of judging treatment than doctors, but I don’t think that’s a very useful hypothesis until specialized by a mechanism. A marginal benefit of zero is such a mechanism. I’d be happy to entertain others, but that’s the only one I see.

Toby: Comparison with Europe, like the RAND study, suggests a 30% or more cut is possible. Most people call that infra-marginal. I’d also like to point out Singapore, which spends half as much as Europe (as a percent of GDP).

If you don’t trust RAND, try practically any other attempt to study this. The RAND study is always quoted because it was the biggest and best designed, not because it is unique.

Toby, I distinguished in my comments between margin and average effects. We know less about the average than the margin, but that shouldn’t be much cause for encouragement about medicine.

What the experiment would show is that additional health care is worth a negligible amount at the margins. Or, more precisely, that additional health care in the american system in the 1970s is worth a negligible amount at the margin. The first qualifier ‘at the margin’ is amazingly strong, as it is compatible with the claims of other economists that health improvements have been worth as much to us since the 1800′s as all other improvements combined. It may just be that we get all of them in the amount that people are willing to pay themselves for health care (and we would certainly expect to get much more than half the benefits in the first half of the money spent, as we go for efficiency first).

The qualifier about america and about the 1970s also seem quite strong. The US has considerably worse health statistics than many first world countries despite spending over twice as much as the next competitor. It isn’t surprising that they are not very efficient at their margin given that everyone else stopped spending far earlier.

Remember too, that RAND is not the most trustworthy source in general. I’m pretty sure they campaigned to nuke the USSR pre-emptively before they got their own nukes, for example. This example is of ethics rather than data collation, but we are right to be suspicious of this infamously politicized source.

Even if it showed everything it wanted to, there is also the redistributive benefit of public health care (it distributes wealth to the poor), though if really inefficient at the margins, this could be better done by a direct payment to everyone. However, scrapping the public spending in the US health system is unlikely to be accompanied by a compensating redistributive benefit, so I think it may be for the worse even if health care dollars are worth nothing at the margin (in the US, today).

This is not to say that the RAND experiment isn’t interesting. It is. However it must be taken very carefully.