Benefits February 2, 2004

Health Care Spending Benefits Outweigh Costs

February 2, 2004 (PLANSPONSOR.com)-Although health care costs are skyrocketing, the money is well spent, with each additional dollar spent on health care services producing health gains valued at $2.40 to $3, says a new report by a coalition of health care organizations.
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In light of those gains the report, The Value of Investment in Health Care: Better Care, Better Lives, directed by health services research firm MEDTAP International Inc., says the expenditures are worth the improved health over the past 20 years in the US population.

Between 1980 and 2000, there was a 102% increase, $2,254, in the annual age-adjusted per person health care costs, the report said. However, the report cited those increases as the cause of:

  • annual death rates declining by 16%
  • life expectancy increasing more than three years
  • disability rates for seniors falling by 25%
  • number of days Americans spent in the hospital falling 56%.

Without the increases in health care costs, although the country would have saved $634 billion, there would have been 470,000 more deaths; 2.3 million more people with disabilities; and 206 million more days spent in the hospital, the report said. These conclusions come from combining published findings from journals with original analysis of national data.

The report, “The Value of Investment in Health Care: Better Care, Better Lives,” is available on the Web at http://www.medtap.com .

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