Improvements in medical care over the past two decades have increased healthy life expectancy in the United States by 1.3 years, but have also driven up lifetime medical costs to $234,000 per person. This equates to roughly $182,000 for each additional year of healthy life gained, according to a new national study published in Value in Health. Understanding the cost-effectiveness of medical advancements is crucial for shaping future healthcare policy and resource allocation.
Researchers examined how advancements in medical care impacted health-adjusted life expectancy (HALE) and lifetime healthcare spending by evaluating changes in 132 disease causes across all ages between 1996 and 2016. The analysis represents the most comprehensive assessment to date of what Americans have received in return for increasing medical costs.
“These findings highlight that the issue isn’t simply how much the nation spends on healthcare, but where that money is going and what it’s achieving.”
Marcia Weaver, PhD, lead author of the study and research professor, Institute for Health Metrics and Evaluation, University of Washington
Strengthening healthcare resources for approximately 60% of conditions – including ischemic heart disease, stroke, and HIV/AIDS – yielded substantial health improvements at relatively modest costs. For example, better medications, devices, and emergency care for ischemic heart disease added a quarter of a year of healthy life to the overall American population, at a cost of around $63,000 per healthy year gained. Treatments for HIV/AIDS produced some of the largest gains in survival and quality of life with a particularly low cost of $9,300 per healthy year gained, making it a cost-effective investment in U.S. Healthcare.
The most favorable outcomes occurred when HALE increased and lifetime costs decreased, which was true for 19 causes (14%), including breast cancer. These economic advances in screening and treatment increased people’s lifespans even as reducing lifetime costs, reflecting a shift toward less invasive and more effective care.
Conversely, HALE and lifetime costs both decreased for seven causes (5%), such as alcohol-related disorders. HALE decreased for 26 causes (20%) as lifetime costs increased, as was the case with chronic kidney disease and drug-related disorders. In fact, drug-related disorders significantly worsened the overall value of healthcare in the United States during the study period.
“Disease-level expenditure estimates provide a basis for identifying healthcare spending patterns and understanding how these patterns relate to health outcomes,” said co-author Abe Dunn, PhD, Deputy Chief Economist at the U.S. Bureau of Economic Analysis.
For many diseases, spending increased early in life, while health improvements occurred years or decades later. When researchers recalculated the value of healthcare starting at age 65, the cost per healthy year gained fell to approximately $92,000, about half the $182,000 estimate calculated from birth. Measuring spending throughout life demonstrates how early investments in prevention and treatment can pay off later, particularly for chronic conditions like diabetes and heart disease.
The results suggest that efforts to control healthcare costs should focus less on broad spending cuts and more on improving access to care for conditions and interventions that deliver significant health improvements. Further research and innovation are needed to address conditions that drive high costs without improving health.
“Better alignment of spending with health outcomes could substantially improve the overall value of healthcare in the United States, saving lives, improving quality of life, and enabling more efficient use of limited resources,” added Professor Weaver.
