Friday, March 26, 2004
Predicted rise in health care costs may be trimmed as new drugs emerge
["New Drugs Can Reduce Health Care Costs," NCPA Daily Policy Digest, 26 March 2004.]
Famed economist Gary Becker adds some perspective to the discussion of escalating health care costs by pointing out that as new drug treatments are developed, they will likely reduce cost growth. The trick to achieving these savings, though, is to avoid price controls and other government clamp downs on the drug industry:
Health care costs, which currently account for 15 percent of gross domestic product (GDP), are expected to increase to 25 percent of GDP by 2030. However, this growth prediction could be trimmed with the use of new drug therapies, according to Gary Becker of the University of Chicago.
Many new prescriptions are costly, but in the long run they will reduce the need for more expensive hospital stays and in-patient treatments:
The Journal of Clinical Psychiatry reports that antidepressant expenditures increased from $400 per depressed person in 1990 to $1,300 in 2000; however, due to fewer hospital stays, total spending per depressed person actually declined.
New drugs have contributed to the decline in adult mortality in the United States and 50 other countries over the past 20 years.
While new drugs may not provide a full cure for debilitating diseases such as Alzheimer's, Parkinson's and AIDS, they will delay the severity of diseases, resulting in reduced expenses in hospital and nursing home care.
["New Drugs Can Reduce Health Care Costs," NCPA Daily Policy Digest, 26 March 2004.]
Famed economist Gary Becker adds some perspective to the discussion of escalating health care costs by pointing out that as new drug treatments are developed, they will likely reduce cost growth. The trick to achieving these savings, though, is to avoid price controls and other government clamp downs on the drug industry:
Health care costs, which currently account for 15 percent of gross domestic product (GDP), are expected to increase to 25 percent of GDP by 2030. However, this growth prediction could be trimmed with the use of new drug therapies, according to Gary Becker of the University of Chicago.
Many new prescriptions are costly, but in the long run they will reduce the need for more expensive hospital stays and in-patient treatments:
The Journal of Clinical Psychiatry reports that antidepressant expenditures increased from $400 per depressed person in 1990 to $1,300 in 2000; however, due to fewer hospital stays, total spending per depressed person actually declined.
New drugs have contributed to the decline in adult mortality in the United States and 50 other countries over the past 20 years.
While new drugs may not provide a full cure for debilitating diseases such as Alzheimer's, Parkinson's and AIDS, they will delay the severity of diseases, resulting in reduced expenses in hospital and nursing home care.
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